Facebook reports strong earnings despite privacy scandal

Facebook shrugs off Cambridge Analytica scandal to post 1Q earnings beat

Facebook Inc. continued to add users and saw revenue soar in the first quarter despite facing its worst crisis in company history over the mishandling of personal data belonging to millions of unsuspecting users.

Facebook also added 48 million daily users; overall, the company boasts 1.45 billion daily active users-in line with Wall Street estimates and up 13 percent year-over-year-and nearly 2.2 billion monthly active users, beating estimates of 2.19 billion and also up 13 percent year-over-year.

Mobile advertising revenue represented approximately 91% of advertising revenue for the first quarter of 2018.

It is spending to ensure users are not scared away by scandals.

Facebook added 70 million users in the first quarter for a new high of 2.2b. This brings the numbers up to 1.45 billion daily and 2.2 billion monthly active users. Facebook also said its employee headcount grew to 27,742, a 48 percent increase year over year.

In March, towards the end of Facebook's reporting period, the company was caught up in a massive privacy scandal involving the political consultancy Cambridge Analytica.

Facebook's stock rose more than 4 percent in after-hours trading.

So will this result from Facebook be enough to steady the fragile United States share markets? This was up from a previous estimate of more than 50 million. Facebook first disclosed it was suspending Cambridge Analytica on March 16, with only about two weeks left in the quarter.

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First quarter profits also grew, reaching $4.9bn compared to $3bn a year ago. Mark Zuckerberg was all but frog-marched onto Capitol Hill to defend his company's data-gathering practices, Apple's Tim Cook appeared in Washington for a decidedly different goal: a scheduled meeting with Donald Trump.

But Williamson said some of Facebook's momentum was already fading due to other factors such as disinformation, social media fatigue and new platforms attracting young people. "To each query, the company that faces probes in different parts of the world for illegal data mining, has provided one line answers which don't explain anything or provide any assurances".

Facebook is launching a pilot programme in Ireland ahead of a referendum on abortion which it hopes will ensure greater transparency in political advertising.

The scandal, at least for now, hasn't resulted in any significant loss in users for the California-based social media giant.

David Wehner, Chief Financial Officer broke down a portion of those security and safety costs, telling analysts that the sales and marketing expense growth of 51% compared with the year-earlier quarter was driven by the "community operations investment". The question for analysts will be whether the declines are truly Facebook's own design or a reflection of user preference.

Facebook also has plenty of properties where it's starting to make more money beyond the main social network, like the popular chat apps WhatsApp and Messenger and the photo-sharing app Instagram, which is expected to reach a billion users this year.

Aside from some rather vague 'we need to do better' statements from CEO Mark Zuckerberg, the new advert is the closest the company's come to admitting that it has a serious image issue and that it has substantially strayed from its initial intentions.

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