Facebook reported strong first-quarter results, with solid growth in users and revenue, though the company said it has incurred a loss of between $3 billion-$5 billion from a federal probe into its data use practices.
Total revenue rose 26% to $15.077 billion, ahead of Wall Street analysts’ consensus forecast. Earnings per share dropped 50% from a year ago to 85 cents, when a charge due to an inquiry by the Federal Trade Commission is factored in. Without that charge, earnings would have been $1.89, well ahead of analysts’ estimate of $1.63 a share.
The company estimated the hit from the FTC probe of the platform and data use practices at $3 billion, but said the loss could reach $5 billion. “The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome,” Facebook said in its official earnings release Wednesday.
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The investigation and the settlement of the related fine, which is reported to be the largest ever levied against a tech company, stems from the company’s entanglement with now-defunct data firm Cambridge Analytica. The company, which had a contractual relationship with Facebook, admitted to tapping into user data without proper disclosure and consulting with Donald Trump’s 2016 campaign, among others, to target Facebook users.
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Investors have generally shrugged off issues surrounding data use, regulatory hurdles or political pressure when evaluating Facebook, focusing instead on its robust financials. The company’s stock has gained 35% in 2019 to date, and climbed about 5% in after-hours trading after closing at $182.58.
Tallies of both daily and monthly active users both increased 8%, with DAUs at 1.56 billion and MAUs at 2.375 billion.
“We had a good quarter and our business and community continue to grow,” CEO Mark Zuckerberg said in the release. “We are focused on building out our privacy-focused vision for the future of social networking, and working collaboratively to address important issues around the internet.”
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