Facebook revenue meets expectations, profit rises

Facebook Inc., which had warned of rising costs and slowing growth, reported quarterly revenue roughly in line with expectations, and profit that beat analysts’ forecasts. And despite scandals around fake news and election interference, it added more users, too.

Third-quarter revenue rose 33 per cent to US$13.73 billion, compared to the $13.8 billion analysts estimated. Profit rose to $1.76 a share, well ahead of Wall Street projections, according to data compiled by Bloomberg.

Monthly active users totalled 2.27 billion, up 10 per cent from a year earlier.

Facebook earlier this year said revenue growth rates would decline in the third and fourth quarters, sending shares plummeting. That set a low bar for Tuesday’s results. Facebook shares slipped 1.5 per cent in extended trading after closing at US$146.22 in New York.

“Facebook grew revenue at a nice pace in the important U.S. and Canada markets,” Emarketer analyst Debra Aho Williamson said. “Facebook also managed to eke out a small usage gain in the U.S. and Canada. After the flatness we saw last quarter, that’s a good sign.”

Maintaining growth in developed markets like the U.S. is important because the new users that Facebook brings on in other parts of the world are usually in less-lucrative advertising markets.

The earnings report comes a week before an even bigger test: U.S. midterm elections. Facebook has touted its commitment to avoid the missteps of the 2016 U.S. election, when Russia ran a misinformation campaign. Facebook has been investing in safety and security, hiring thousands to monitor user complaints and investigate unusual activity.