Facebook Inc. may have a target on its corporate back, but it continues to steam forward. Its stock jumped as much as 5% in after-hours trading Wednesday after the company announced third-quarter results that soundly beat analysts’ earnings estimates and topped revenue forecasts.
The social-networking giant reported third-quarter net income of $6.09 billion, or $2.12 a share, compared with $5.14 billion, or $1.76 a share, in the year-ago period.
Revenue jumped 29% to $17.65 billion from $13.73 billion a year ago. Advertising sales accounted for 98% of total revenue, or $17.38 billion.
Analysts surveyed by FactSet had estimated $1.91 a share on revenue of $17.37 billion.
“We had a good quarter and our community and business continue to grow,” Facebook Chief Executive Mark Zuckerberg said in a statement. “We are focused on making progress on major social issues and building new experiences that improve people’s lives around the world.”
Facebook FB, -0.56% also announced the departure of board member Susan Desmond-Hellmann, CEO of the Bill and Melinda Gates Foundation, after six years for personal and health reasons. Her replacement to the seven-member board is expected “over the coming months,” Facebook said in an SEC filing.
Read more: Facebook earnings: What distractions? Another strong quarter is expected
Monthly active users (MAUs), a key barometer of the company’s growth, improved 8% to 2.45 billion, as FactSet analysts predicted.
About 2.8 billion people use Facebook and its properties, WhatsApp, Instagram and Messenger, each month, Zuckerberg said in a conference call following the earnings announcement.
The quarterly results underscore what has been a consistent story arc throughout the year: Despite a Federal Trade Commission investigation into its business practices, a record $5 billion fine from the FTC this year for privacy violations, and a conga line of angry politicians calling for it to be sliced and diced, Facebook continues to post solid results. The same has largely held true for the other big tech companies facing regulatory scrutiny: Apple Inc. AAPL, -0.01% , Amazon.com Inc. AMZN, +0.98% , and Alphabet Inc.’s GOOGL, +0.00% GOOG, -0.11% Google division.
“We face major regulatory and social issues,” Zuckerberg acknowledged during the conference call. He repeated his preference for a “very set level” of federal rules.
“A lot of the antitrust questions out there will be about our acquisition of Instagram,” Zuckerberg said in response to one analyst’s question. “But we think [its business] was a lot more complementary than we thought… At the end of the day, it is the FTC’s decision.”
Earlier, the Facebook co-founder took the opportunity on the conference call to double down on the company’s recent advocacy of free speech and expression, particularly in political ads as the 2020 presidential campaign intensifies. “Over the next year of campaigns, we will be at the center of the debate,” he said. “I expect this will be a very difficult year… but this is complex stuff.” He added that political ads will comprise less than 0.5% of total revenue in 2020.
But not all the numbers for Facebook are rosy.
During the conference call, Facebook Chief Financial Officer David Wehner warned of “pronounced deceleration” in Q4 revenue amid overlapping products and “ad-targeting headwinds.” He noted a 32% hike in third-quarter costs and expenses, to $10.5 billion.
Then there is actual use of the core Facebook product. Americans are spending 26% less time on Facebook than they did two years ago, and they’re increasingly using other social networks as an alternative, according to a new study by market researcher Active Inc.
Facebook users spent on average of nearly 13 hours a month on the platform in 2017; today, that figure is down to 9.28 hours, said Active. At the same time, social-media users in the U.S. belong to 5.8 different social-media networks; by 2023, it’s predicted to be 10.
Facebook’s stock is up 44% this year, while the S&P 500 index SPX, +0.33% has gained 21%.
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