Apr 29, 2020 - Technology

Facebook stock spikes on strong earnings, stabilization of ad slowdown

Photo: Thomas Trutschel/Photothek via Getty Images

Facebook's stock was up more than 7% in after-hours trading on Wednesday after the tech giant reported that it beat Wall Street's expectations on revenue and earnings per share. Facebook grew its ad revenue by 17% year-over-year, despite the fact that the digital ad market is experiencing unprecedented headwinds due to the coronavirus.

Why it matters: The fact that Facebook was able to beat top and bottom line revenue expectations amid the coronavirus crisis speaks to how strong the company's value proposition continues to be during the pandemic.

Yes, but: The company did issue rare guidance that the current period of uncertainty may continue to impact its business performance moving forward.

  • While Facebook said it has experienced increased engagement and expects it to continue, it added that it expects the spike in usage to come back down once stay-at-home orders are lifted.
  • In a statement, the company said it experienced "a significant reduction in the demand for advertising, as well as a related decline in the pricing of our ads, over the last three weeks of the first quarter of 2020."

By the numbers:

  • Earnings (EPS): $1.71 vs. $1.75 per share forecast by Refinitiv
  • Revenue: $17.74 billion vs. $17.41 billion forecast by Refinitiv
  • Daily active users (DAUs): 1.73 billion
  • Monthly active users (MAUs): 2.6 billion
  • Average revenue per user (ARPU): $6.95

The big picture: Facebook was the third major internet company to post strong Q1 earnings in the past week, suggesting that the biggest internet companies will continue their dominance over the advertising ecosystem as a result of the pandemic.

  • Snapchat and Google both posted revenue gains despite headwinds to the digital ad market.

Go deeper: Facebook's Q4 2019 earnings

Go deeper

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 9 p.m. ET: 6,724.516 — Total deaths: 394,018 — Total recoveries — 2,996,832Map.
  2. U.S.: Total confirmed cases as of 9 p.m. ET: 1,894,753 — Total deaths: 109,042 — Total recoveries: 491,706 — Total tested: 19,231,444Map.
  3. Public health: WHCA president says White House violated social-distancing guidelines to make reporters "a prop" — Jailing practices contribute to spread.
  4. Sports: How coronavirus could reshuffle the sports calendar.
  5. Jobs: Better-than-expected jobs report boosts stock market.
  6. Media: The Athletic lays off 8% of staff, implements company-wide pay cut.

Scoop: German foreign minister to travel to Israel with warning on annexation

Heiko Maas. Photo: Michael Kappeler/picture alliance via Getty Images

German Foreign Minister Heiko Maas is expected to travel to Israel next week to warn that there will be consequences if Israeli leaders move forward with plans to annex parts of the West Bank, Israeli officials and European diplomats tell me.

Why it matters: Israeli and European officials agree that if Israel goes ahead with unilateral annexation, the EU will respond with sanctions.

Minneapolis will ban police chokeholds following George Floyd's death

A memorial for George Floyd at the site of his death in Minneapolis. Photo: Steel Brooks/Anadolu Agency via Getty Images

Minneapolis has agreed to ban the use of police chokeholds and will require nearby officers to act to stop them in the wake of George Floyd's death, AP reports.

Why it matters: The agreement between the city and the Minnesota Department of Human Rights, which has launched an investigation into Floyd's death while in police custody, will be enforceable in court.