Facebook Posts Revenue Growth Despite Pandemic
30 Luglio 2020 - 11:02PM
Dow Jones News
By Jeff Horwitz
Facebook Inc. posted diminished growth in the second quarter but
revenue was still higher than expected, as the social-media giant
benefited from higher engagement from users amid the pandemic.
Facebook brought in $18.7 billion in revenue in the quarter, up
from $16.9 billion a year earlier and beating analyst expectations
of $17.34 billion, according to data from FactSet. The 11% growth
is a sharp deceleration from the average gains of nearly 25% annual
growth that the company had posted over the last four quarters.
Earnings rose to $5.18 billion, or $1.80 a share, compared with
the $3.96 billion, or $1.39 a share, expected by analysts. Facebook
shares gained more than 5% in after-hours trading.
The quarter was the first to reflect the full weight of the
coronavirus pandemic in the U.S. that upended normal economic
activity but contributed to rising usage of Facebook's products.
Average monthly users of the Facebook platform rose to 2.7 billion,
from 2.6 billion in the first quarter. More than three billion
people now use at least one of Facebook's products on a monthly
basis.
Facebook had joined other social media companies in predicting
that pandemic fallout would damp its near-term prospects, though
Chief Financial Officer David Wehner said on the company's previous
earnings call that the company had seen signs of stability during
the first weeks of the second quarter, with gaming and e-commerce
helping to fill the gap created by coronavirus-stricken industries
like travel and hospitality.
The company's gross margin, 32%, rose 1% from the first quarter
and was up from 27% a year ago. Chief Executive Mark Zuckerberg had
predicted that the margin would drop throughout 2020 as the company
used its financial strength to invest in as many as 10,000 new
products and contribute to pandemic relief efforts.
Over the last few months, the company has rushed to release new
products in major markets, including a customizable shopping
feature aimed at small business, a video chat product called Rooms
and Instagram Reels, which copies many of the features popularized
by rival social media platform TikTok.
Mr. Zuckerberg has said that he expects the pandemic will
ultimately shift consumer behavior as they spend more of their
lives online in ways that will likely benefit Facebook in the
long-run.
Write to Jeff Horwitz at Jeff.Horwitz@wsj.com
(END) Dow Jones Newswires
July 30, 2020 16:47 ET (20:47 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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