Facebook beats earnings, reports new FTC antitrust probe
Facebook's stock was up nearly 4% in after-hours trading Wednesday after the company beat investor expectations for earnings, user growth and revenue.
Yes, but: The positive earnings were accompanied by several pieces of bad news.
- Facebook announced that the Federal Trade Commission told it in June that the agency had opened an antitrust investigation into the company.
- It also will set aside $2 billion, on top of $3 billion set aside last quarter, to pay a historic $5 billion fine that the FTC officially levied on the company today.
By the numbers, via CNBC:
- Earnings: $1.99 cents per share vs. $1.88 per share, forecast by Refinitiv
- Revenue: $16.9 billion, vs. $16.5 billion, forecast by Refinitiv
- Daily active users: 1.59 billion, vs. 1.59 billion forecast by FactSet
- Monthly active users: 2.41 billion, vs. 2.41 billion forecast by FactSet
- Average revenue per user: $7.05 vs. $6.87 forecast by FactSet
The big picture: Facebook reported earnings just hours after the company announced it had settled a $5 billion fine with the Federal Trade Commission over allegations that it "repeatedly used deceptive disclosures and settings to undermine users’ privacy preferences."
- The company had previously written down the minimum amount expected from the fine — $3 billion — and will write down the rest of the fine during this quarter's financial period.
- Facebook also said that as of today, it had settled an ongoing investigation by the Securities and Exchange Commission for $100 million.
Between the lines: Shortly before earnings, Facebook posted a clip of Mark Zuckerberg addressing Facebook employees at an internal town hall meeting this morning, where he said that the fine represents "a new chapter for the company" and said that "We are going to change they way we operate throughout the whole company."