Facebook says growth slows amid ad slump

Facebook reported its slowest quarterly growth as a public company on Tuesday, pressured by the coronavirus pandemic and a resulting global slowdown in digital advertising.

The Menlo Park company, like Google on Tuesday, said it’s feeling the squeeze but expects to weather it with only modest longterm effects.

The company said it saw a “significant reduction” in ad prices and demand in the last three weeks of March. It declined to predict revenue for the rest of the year, but said that for the second quarter, it has seen “signs of stability” in the first three weeks of April. Ad revenue during this time has been about the same as it was in the same period a year ago, Facebook said.

It was a “decent quarter, all things considered,” said eMarketer social media analyst Debra Aho Williamson. But the fact that revenue

was flat in the first three weeks of April suggests that the second quarter will be much more challenging than the first, she added.

Facebook said it earned $4.9 billion ($1.71 per share) in the JanuaryMarch quarter. That’s more than double the $2.43 billion (85 cents) it reported in the same period a year earlier.

Revenue rose 18% to $17.74 billion from $15.08 billion.

Analysts were expecting earnings of $1.74 per share on revenue of $17.34 billion.

Facebook had warned last month that its business was being squeezed by the advertising downturn even though use of its services has risen. In countries hardhit by the pandemic, it said, messaging traffic was up 50% while voice and video calling had doubled. But Facebook said that it doesn’t make money on many of those services and that advertising business had weakened in those regions.

In the fourth quarter of last year, before the pandemic slowed the global advertising market, Facebook had reported its slowest revenue growth rate in history. And the company warned that a further slowdown is coming. This was not unexpected — the bigger Facebook gets, the harder it is for it to keep growing like a startup.

Facebook had 2.6 billion monthly users on average in March, up 10% from a year earlier. Its daily user base during the month grew 11% to an average of 1.73 billion.

The company said that 2.99 billion people used at least one of its apps — Facebook, Instagram, Messenger or WhatsApp — at least once a month in March. That’s up 11% from a year ago.

Facebook’s stock rose nearly 10% to $213.36 in afterhours trading.