Another grilling on Capitol Hill, another pile of profits.
Facebook walloped Wall Street’s forecasts with strong profits on Thursday, as advertisers returned to the platform in full force despite growing anti-trust concerns and a public grilling this week of CEO Mark Zuckerberg by US senators.
The social-networking giant on Thursday also beat estimates for ad revenue, boosted by spending returning following a second quarter slowdown.
Like smaller rival Snap, which reported stellar results last week, Facebook’s numbers further boosted the belief that ad spending may be coming back to life after months of pullback due to the coronavirus shutdowns.
Facebook beat revenue expectations by 80 cents, bringing in $2.71 per share versus the forecasted $1.91. The Menlo Park, Calif.-based company also raked in revenue of $21.5 billion, up 22 percent year-over-year and well ahead of the expected $19.8 billion.
The revenue beat arrived the same quarter that Facebook was the subject of a high-profile advertiser boycott, with 400 advertisers including Starbucks, Coca-Cola and Microsoft abandoning its platform for the month of July.
Daily active users clocked in at 1.82 billion, a 12 percent increase, while monthly active users were up by the same percentage to 2.74 billion.
“We had a strong quarter as people and businesses continue to rely on our services to stay connected and create economic opportunity during these tough times,” Zuckerberg said in a statement.
Shares of Facebook, which climbed 4.9 percent Thursday, were down 1.7 percent in extended trading as it revealed that its daily active user figure in the US and Canada fell slightly from 198 million to 196 million and would likely not grow in the fourth quarter.
If analysts and investors were worried about the hostility shown toward Facebook in Wednesday’s Senate hearing, they didn’t show it. CFRA analyst John Freeman told The Post that until real suggestions for regulation are brought forth, there will be little concern for Facebook’s bottom line.
“They’ve been brought to the Senate twice now in the past few months,” he said. “It’s for show, it’s easy bipartisan bashing.”
Freeman added that the only thing that is known at the moment is that there is some appetite for regulation of some form, but that there is little clarity of what it will look like or how, if at all, it will affect Facebook’s business model.
“Right now, the law is the law,” he said. “What we need to see is how intrusive that regulation is down the road. I don’t think revenue and profits are touched by any of this at all.”
Scott Kessler, the global sector lead for technology media and telecommunications at Third Bridge, agreed, telling The Post that it remains to be seen what the priorities and focus areas for individual agencies and members of Congress result in.
“These things are being anticipated,” Kessler said. “It’s just not apparent what exactly is going to happen and when that’s going to occur. Many have thought for some time that even if changes happen, Facebook is in a position to address them based on its size and resources and properties.”
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