Scandal-plagued Facebook comes up short on user growth, but profits are still soaring
Facebook reported sky-high profits today despite a number of rotating scandals related to data privacy, fake news, and faulty metrics.
The social network reported earnings per share of $1.76, compared to a consensus estimate of $1.47 cited by CNBC. However, revenue was slightly lower than expected, topping off at $13.73 billion, compared to estimates of $13.78 billion.
User growth also took a hit: Daily active users were expected to reach 1.51 billion, while monthly active users were expected to reach 2.29 billion. But those numbers were both lower than expected, at 1.49 billion and 2.27 billion, respectively.
Nevertheless, CEO Mark Zuckerberg said in a note to investors today that more than 2 billion people use one of Facebook’s services—including Instagram, WhatsApp, and Messenger—every day. “We’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well,” Zuckerberg said.
Facebook has been the focus of several controversies over the last year, including revelations about data misuse by Cambridge Analytica, outrage over Zuckerberg’s apparent defense of Holocaust denial, mayhem and violence caused by misinformation on the platform, advertiser backlash over faulty video metrics, and a massive data hack that exposed the personal information of about 29 million users.
Those scandals, along with Zuckerberg’s previous warnings about decreased user engagement, had already wiped away huge gains for the company. Before today’s report, shares of Facebook were trading at lows not seen since mid-2017.
But investors must have liked what they saw this afternoon, as shares perked up a bit in after-hours trading after a slight dip. We’ll have to wait and see if the good feelings last.