Facebook posts record $6.9 billion profit despite privacy scandals

Facebook’s endless PR crises don’t appear to be hurting its bottom line.

The company posted a record $6.9 billion profit for the final three months of 2018 — a jump of 61% from the same period a year earlier and well ahead of Wall Street estimates.

Facebook’s revenue for the quarter rose 30% to $16.9 billion, according to its latest earnings report released Wednesday.

Its user numbers remain impressive as well. Facebook (FB) now has 1.52 billion people who use the social network every single day, and 2.32 billion who use it every month, both of which are up 9% from the year prior.

The broader Facebook audience is even more staggering. Facebook estimates that 2.7 billion people now use Instagram, WhatsApp, Messenger or Facebook itself each month. Two billion people use at least one of these services every day.

Just as importantly, Facebook actually added daily users in Europe and North America, two closely watched and lucrative markets that had previously been stagnant or occasionally declined.

The strong results cap off a brutal year for Facebook. The company earned the ire of users and regulators on both sides of the Atlantic for a growing list of privacy issues, including the Cambridge Analytica data scandaland a massive security breach.

The endless wave of negative headlines sparked fears of a possible user and advertiser exodus. But the report suggests these fears may have been overblown.

“With these results, Facebook has clearly demonstrated that the challenges of 2018 have not had a lasting impact on its ability to increase both revenues and usage,” said Debra Aho Williamson, principal analyst at eMarketer.

On a conference call with analysts after the report was released Wednesday, Facebook CEO Mark Zuckerberg touted the steps taken by the company last year to deal with misuse of the platform, including building AI detection systems and hiring tens of thousands of safety and security staff.

“There’s more to do here, but I’m proud of the work that we’ve done to get in front of these issues,” he said. “We’ve started to turn a corner and have a clear plan for what we need to do now.”

The confident remarks, paired with the blowout earnings results, suggest the company is shifting away from its defensive posture. Instead, Zuckerberg is doubling down on Facebook’s efforts to connect the world — and find new ways to profit from it.

On the call, the CEO teased plans to continue “building new and inspiring ways” for users to connect, even as the unintended dark side of connecting billions of users — long the mission of the company — has increasingly come to light.

“There’s a lot of negativity about technology,” Zuckerberg said on the call. “Some of it’s fair, some of it’s misplaced.”

Zuckerberg said Facebook also plans to increase commerce activity on Instagram, a move that could boost the company’s revenue stream from one of its most promising platforms. He says it continues to work to make more money from Stories, an ephemeral messaging feature borrowed from Snapchat and available across Facebook’s biggest apps.

Zuckerberg also confirmed Facebook is “really early” in the process of integrating its messaging platforms. He framed the move as “a 2020 thing or beyond.”

Even as Facebook looks to leave the struggles of 2018 behind, the bad headlines continue. On the eve of the earnings release, Facebook was criticized for using a controversial market research app to collect information on how people use their smartphones.

Shares of Facebook ticked up more than 10% in after-hours trading Wednesday following the earnings result. Heading into the earnings report, Facebook stock was down by nearly a third from its high in July.

Source: CNN