(Reuters) – Facebook Inc beat analysts’ estimates for quarterly revenue on Wednesday, aided by growth in its Instagram business and a surge in advertising sales, while also setting aside up to $5 billion to cover anticipated official U.S. privacy penalties. FILE PHOTO: A Facebook panel is seen during the Cannes Lions International Festival of Creativity,…
(Reuters) – Facebook Inc beat analysts’ estimates for quarterly revenue on Wednesday, aided by growth in its Instagram business and a surge in advertising sales, while also setting aside up to $5 billion to cover anticipated official U.S. privacy penalties.
Shares of the company, which have surged almost 40 percent this year, were up nearly 5 percent in extended trading after it said ad sales jumped 26 percent to $14.91 billion in the first quarter, beating analysts’ average estimate of $14.77 billion.
Monthly active users rose 8 percent to 2.38 billion, beating estimates of 2.37 billion, according to IBES data from Refinitiv.
Costs jumped 80.5 percent to $11.76 billion, as the company ramped up spending to improve content and security across its platforms.
The company also raised the top end of its provision for losses related to Federal Trade Commission privacy concerns from $3 billion to between $3 billion and $5 billion.
But excluding items including the potential FTC penalty, the company earned $1.89 per share, better than analysts’ expectations of $1.63 per share.
The FTC has been investigating revelations that Facebook inappropriately shared information belonging to 87 million of its users with the now-defunct British political consulting firm Cambridge Analytica.
The probe has focused on whether the data sharing of data and other privacy disputes violated a 2011 agreement with the FTC to safeguard users’ privacy.
Total revenue rose 26 percent to $15.08 billion, beating analysts’ average estimate of $14.98 billion.
Net income attributable to Facebook shareholders fell to $2.43 billion, or 85 cents per share, in the first quarter ended March 31, from $4.99 billion, or $1.69 per share, a year earlier.
The FTC did not immediately respond to a request for comment.
Reporting by Akanksha Rana in Bengaluru and Katie Paul in San Francisco; editing by Patrick Graham
Our Standards:The Thomson Reuters Trust Principles.