Facebook Tops Revenue Estimates; FTC Opens Antitrust Probe

Facebook Tops Revenue Estimates; FTC Opens Antitrust Probe
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Facebook showed that its business can weather all kinds of regulatory scrutiny as long as people keep flocking to the social network, according to Bloomberg.

The company seemed to be facing dire consequences as months of regulatory drama came to a head all at once this week. There was a $5 billion U.S. Federal Trade Commission settlement on privacy, and a separate $100 million accord with the Securities and Exchange Commission related to the same issue. The U.S. Department of Justice announced a looming antitrust probe, and then Facebook said that the FTC opened an official investigation into antitrust issues.

Facebook said second-quarter sales rose 28% to $16.9 billion, compared with an average analyst projection of $16.5 billion. In a statement, the company said 1.59 billion people log into the main social-media service daily. Facebook said it set aside $2 billion in the recent period to cover the remainder of the FTC settlement, after allocating $3 billion in the previous quarter.

A total of 2.7 billion people use at least one Facebook-owned app every month. While the company’s growth hasn’t been throttled by regulatory changes or privacy restrictions yet, it’s possible new rules could slow future gains. The company said it expects revenue growth to decelerate, especially in the fourth quarter and into 2020.

Facebook’s user gains by region for the second quarter showed that the main app has almost fully tapped out growth in Europe and the U.S., the company’s most lucrative ad markets. It added the most users in Asia, where it makes an average of only $3.04 per user, compared with $33.27 in the U.S. and Canada.

Including the costs set aside for the settlements and a tax-related charge, Facebook said quarterly net income was $2.62 billion, or 91 cents a share. Excluding the items, the company said profit was $1.99 a share, exceeding the $1.88 per-share average analyst estimate. A year earlier, Facebook posted earnings of $5.11 billion, or $1.74 a share, on sales of $13.2 billion.