A surge in digital ad spending during the pandemic when
consumers shopped online, along with higher ad prices, helped Facebook revenue
surge 48%. Looking ahead, the world's largest social network said it will focus
on building e-commerce features to expand beyond its ad business.
Shares of Facebook rose 6.5% to $326.00 in extended trading.
"We have a long way to go to build out a full-featured
commerce platform ... but I am very committed to getting there," Facebook
Chief Executive Mark Zuckerberg told analysts on a conference call to discuss
earnings.
Total revenue, which primarily consists of ad sales, hit
$26.17 billion in the first quarter ended March 31, beating analysts' average
estimate of $23.67 billion, according to IBES data from Refinitiv.
The digital advertising industry has boomed during the
pandemic, benefiting Facebook and others including Google, whose parent company
Alphabet Inc reported record quarterly profit on Tuesday.
"Despite several headwinds - such as ongoing antitrust
scrutiny, lingering privacy concerns, as well as looming changes which could
negatively impact its advertising business - Facebook delivered another
blockbuster quarter," said Jesse Cohen, senior analyst at Investing.com.
Zuckerberg said the company plans to focus on three key
areas: building augmented and virtual reality, e-commerce features and helping
content creators earn money on Facebook's platforms.
Monthly active users on Facebook rose 10% to 2.85 billion.
Net income for the first quarter came in at $9.5 billion, or
$3.30 per share, compared with $4.9 billion, or $1.71 per share, a year
earlier. Analysts had expected a profit of $2.37 per share.
Facebook said its total expenses for the year would be in
the range of $70 billion to $73 billion, as it invests in consumer hardware
products like Oculus virtual reality headsets and infrastructure.
APPLE CHANGES
On Wednesday, Facebook said it expects the iPhone privacy
change to impact the second quarter, but third- and fourth-quarter revenue
growth could slow sequentially.
Facebook has blasted Apple over its requirement that iPhone
app developers begin asking users' permission to collect certain data for ads.
Facebook says the change would harm its business and hurt small companies that
rely on personalized advertising.
Its push to build shopping and e-commerce features within
Facebook and Instagram are expected to bring additional revenue to the company
and make its ad inventory more valuable.
The company recently teased a slew of new features,
including an affiliate program to let content creators earn a cut of sales
generated from recommending products on Instagram.
Earlier this month, Facebook announced it was building a
bevy of audio products including live audio rooms to rival the popular app
Clubhouse plus in-app music and podcast players.
The company remains under scrutiny over its power as it
faces major antitrust lawsuits from a large group of U.S. states and the
Federal Trade Commission, and is under regular fire from lawmakers and rights
groups for its content moderation policies, algorithmic systems and handling of
users' data.
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