Facebook Posts $26 Billion In Revenue, Shattering Wall Street Expectations As Income Nearly Doubles

Top line

Facebook, the world’s largest social media company, posted its strongest first-quarter earnings to date on Wednesday afternoon, shaking Wall Street expectations thanks to soaring advertising revenue despite increasing competition from Google and regulatory threats.

Mark Zuckerberg, CEO of Facebook, is valued at an estimated $ 112 billion.

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Key factors

Facebook, headquartered in Menlo Park, Calif., Had first quarter revenue of $ 26.1 billion, 48% more than in the first quarter of last year and nearly $ 3 billion more than analysts expected.

Net income also exceeded expectations, reaching $ 9.5 billion or $ 3.30 per share – well above the average analyst expectations of $ 2.33 per share and nearly double earnings of $ 4.9 billion Dollars in the first quarter of last year.

The monthly active users of Facebook increased by around 50 million, which means that in the last month of the quarter a record 2.85 billion people used the social network.

A number of analysts this week raised their Facebook price targets in anticipation of the better-than-expected earnings report. Credit Suisse’s Stephen Ju said Monday that improving ad trends should bode well for Facebook and Instagram bottom line.

Facebook stock futures rose 7% within minutes of the announcement. The stock closed 1.2% on Wednesday and rose around 14% over the course of the year – better than the 11% rise of the tech-heavy Nasdaq.

Big number

$ 341.50. According to Bloomberg data, high analysts believe Facebook shares can rise in the next year. That puts the stock 11% above Wednesday’s closing price of $ 307.

What to look for

Facebook’s first quarter earnings call will be on Wednesday at 5:00 p.m. EDT.

Crucial quote

“We had a strong quarter as we’ve helped people stay connected and businesses grow,” said Mark Zuckerberg, founder and CEO of Facebook billionaire. “We will continue to invest aggressively in the coming years to deliver new and meaningful experiences, including in newer areas such as augmented and virtual reality, retail and the creator economy.”

Key background

Facebook was founded in 2004 by a group of Harvard College classmates, including Zuckerberg and colleague Dustin Moskovitz. Today, Facebook is the fifth largest US company by market cap, valued at a staggering $ 862 billion. More than 95% of the company’s sales come from advertising, with about 50% of sales in the US and Canada being saturated. Although Bank of America expects its stock to rise another 20% over the next three years, the biggest risks to watch out for include declines in user activity, privacy concerns, big technology regulations, and negative effects on advertising prices .

further reading

Facebook’s share set to grow as earnings are expected to beat market estimates? (Forbes)

Why Mark Zuckerberg Wants Influencers To Get Rich (Forbes)

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