The tech giant Facebook reported its second-quarter earnings on Wednesday. Well, it has effortlessly beat up the Wall Street expectations. The company’s strong earnings show that despite being the face of negative headlines it has the resilience to rise with the strong earnings.
According to the reports, Facebook has marked $16.9 Billion in revenue i.e. 28% up than the previous year. It also flashed $2.6 Billion in profits despite keeping the $2 Billion settlement for the quarters to the Federal Trade Commission. This has accounted for accounting based change regarding stock-based compensation.
If we pull out the charges against the company, it has beat up the analyst expectation[$1.88 per share] by earning $1.99 per share. While the company recorded 1.59 Billion users on the platform every day matching up with analyst expectation.
The company’s top executives said that it can earn more further by investing more in privacy and security. Facebook has faced many obstacles regarding privacy issues from regulators. However, it had a settlement with FTC worth $5 Billion it has one more obstacle to overrun. Recently, the Department of Justice has called out the anti-trust review for the tech giants keeping Facebook under scrutiny.
“We believe that there needs to be a regulatory framework in place,” said Facebook CEO Mark Zuckerberg on the call with analysts after the report. “My broader concern is that if that doesn’t get put in place, then frustration with the industry I think will continue to grow.”
Facebook has mostly beat up every Wall Street expectation but it is still struggling with its reputation in the industry. Oxford reports learned that its share price has climbed by 56% from the beginning of the year despite the backlash it received for its security issues and its plan to develop cryptocurrency Libra.
In the congressional hearing last week, they said it will impose restrictions on Libra until Facebook gain the confidence required for such project. “The privacy efforts do require significant investments obviously in compliance processes, people and technical infrastructure,” Chief Financial Officer David Wehner said on the call with analysts. “One of the impacts that I’d point to is it’s also a reallocation of resources around privacy so that will have an impact on our overall product development as well.
The company’s share surged by 3% after the second-quarter earnings report release.