Business

Facebook beats profit estimates, sets aside $4b for privacy penalty

Facebook on Wednesday blew past Wall Street profit estimates in the first quarter and set aside US$3 billion (S$4 billion) to cover a settlement with US regulators, calming investors who had worried about the outcome of a months-long federal probe.

Shares of the world's biggest online social network jumped more than 10 per cent to US$200.50 in after-hours trade.

They have now regained much of the ground lost last year amid slowing growth and costs associated with the company's privacy scandals.

The settlement accrual cut the company's net income in the first quarter to US$2.43 billion, or 85 US cents per share.

Excluding the charge, Facebook would have earned US$1.89 a share, up from US$1.69 in the year-ago quarter and easily beating analysts' average estimate of US$1.63 a share, according to IBES data from Refinitiv.

Total first-quarter revenue rose 26 per cent to US$15.1 billion from US$12.0 billion last year.

"This is a strong report suggesting that advertisers still see value in Facebook's platform, as they did before the controversies and scandals erupted," said Mr Haris Anwar, senior analyst at financial markets platform Investing.com. - REUTERS

BUSINESS & FINANCE