Facebook disappoints on revenue, active users; shares fall 9 pct

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Facebook disappoints on revenue, active users; shares fall 9 pct
A Facebook panel is seen during the Cannes Lions International Festival of Creativity, in Cannes, France, June 20, 2018. REUTERS/Eric Gaillard

July 25 (Reuters) – Facebook Inc fell short of analysts’ estimates for monthly active users on Wednesday and reported lower-than-expected quarterly revenue, months after the social network became embroiled in a data scandal affecting millions of users.

 

Facebook disappoints on revenue, active users; shares fall 9 pct
A Facebook panel is seen during the Cannes Lions International Festival of Creativity, in Cannes, France, June 20, 2018. REUTERS/Eric Gaillard

The company said monthly active users rose to 2.23 billion, falling short of a consensus estimate of 2.25 billion from Thomson Reuters I/B/E/S.

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Shares in Facebook, which have risen about 23 percent this year, fell 8.6 percent to $198.71 in trading after the bell as investors reacted to the results.

The Cambridge Analytica scandal prompted several apologies from Chief Executive Mark Zuckerberg and generated calls for users to desert Facebook, which has grown strongly since launching as a public company in 2012.

Ad sales in the second quarter rose 42 percent to $13.04 billion but costs, bolstered by moves to improve content and security after the data scandal, rose 50 percent from a year earlier to $7.37 billion.

Net income attributable to Facebook shareholders rose to $5.11 billion, or $1.74 per share, in the second quarter ended June 30 from $3.89 billion, or $1.32 per share, a year earlier.

Total revenue rose 41.9 percent to $13.23 billion.

Analysts had estimated a profit of $1.72 per share, on revenue of $13.36 billion.

(Reporting by Munsif Vengattil in Bengaluru and Paresh Dave in San Francisco; Editing by Anil D’Silva and Patrick Graham)

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