Facebook Sets Aside $3Bn to Cover Fine
April 25 2019 - 8:14AM
Dow Jones News
By WSJ City
Facebook set aside $3bn for an expected fine from the Federal
Trade Commission over privacy issues, cutting into the social-media
giant's profits even as its underlying business remained
strong.
KEY NUMBERS
--- Facebook posted $15.08bn in revenue, up 26% from $11.97bn in
the same period last year.
--- Profits came in at just $2.43bn in the first quarter, as the
one-time reserve wiped out most of its income.
--- Earnings-per-share missed expectations, coming in at $0.85
against an expected $1.69.
--- If not for the one-time cost, they'd have beaten
comfortably, at $1.89.
--- Excluding the reserve for the FTC settlement, Facebook's
operating margin fell to 42%.
--- Costs rose from $6.52bn to $8.76bn.
Why This Matters
Facebook has been warning that its margins will decline as a
result of its increased investment in moderating user-generated
content.
Following the company's first-quarter earnings report, Facebook
stock rose about 4% in after-hours trading. Before the close of
trading on Wednesday, the company's stock had risen roughly 35%
year to date.
A fuller story is available on WSJ.com
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(END) Dow Jones Newswires
April 25, 2019 08:59 ET (12:59 GMT)
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