The report was a relief to investors in the U.S. technology sector, still reeling from a profit warning by Facebook Inc Wednesday that plunged its stock 19 percent. Indeed, the drop Thursday morning was sharper than the multi-day stock slide in March following revelations of data misappropriation by Cambridge and others.
Its Q2 report warned profit margins would plummet for years due to costs to improve privacy safeguards and slowing usage in its big advertising markets.
More likely, though, market buzzards are holding off because of how quickly some analysts are turning on the company. It follows two years of investigations and scandals.
The company has faced tremendous scandals from both the Cambridge Analytica debacle and many questions from users about fake news and misinformation. The political research business collected private data of tens of millions of Facebook users.
Facebook suffered a blow in China on Wednesday when regulators there withdrew their approval of a company innovation hub to support local startups, the New York Times reported on Wednesday, citing a person familiar with the matter. The company is also contending with European privacy rules that went into effect in May.
Similarly, the number of daily active users on the platform - an important metric for judging the success of a website or app - only grew by 22 million, the lowest growth figure since 2011.
Facebook increased spending in the wake of the 2016 USA presidential election, which brought evidence of Russian meddling via social media. Late previous year the company already issued a warning about profitability, and in April Zuckerberg admitted to Congress that the company had reacted slowly.Читайте также: Iran Braces for ‘Mother of All Wars’ with US
For instance, the company is working to ship food from Whole Foods Market stores across the United States, in an ambitious attempt to bring groceries into the age of online retail.
North American sales were up 44 percent year-over-year to $32.17 billion, with operating income at $1.84 billion.
But Amazon shares - which had been feeling the jitters from Facebook shareholders' disappointment - jumped more than 3 per cent to a record high of US$1874 in after-hours trading.
There are varying views concerning how serious Facebook's situation is. The last time the company missed revenue estimates was the first quarter of 2015.
Facebook's margin fell to 44 percent in the second quarter from 47 percent a year ago as it spent heavily on security and initiatives to convince users the company was protecting their privacy.
Facebook is still growing, only more slowly. With around a third of the world already on Facebook, has it got as big as it is going to get? It still dominates the market, owning Instagram, WhatsApp and Messenger.При любом использовании материалов сайта и дочерних проектов, гиперссылка на обязательна.
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