Facebook profit soars, unaffected by Russia ad issue
Facebook profit soars, unaffected by Russia ad issue
The company’s shares, which hit a record earlier in the day, initially rose in after-hours trading, but later fell into negative territory. They have gained almost 60 percent this year.
Chief Executive Mark Zuckerberg condemned Russia’s attempts to influence last year’s election through Facebook posts designed to sow division, and repeated his pledge to ramp up spending significantly to increase the social network’s security, something he said on Wednesday would affect profits.
“What they did is wrong, and we are not going to stand for it,” Zuckerberg said of the Russians, on a conference call with analysts.
Facebook is at the center of a political storm in the US for the ways it handles paid political ads and allows the spread of false news stories. US lawmakers have threatened tougher regulation and fired questions at Facebook General Counsel Colin Stretch in hearings this week.
Facebook, in a series of disclosures over two months, has said that people in Russia bought at least 3,000 US political ads and published another 80,000 Facebook posts that were seen by as many as 126 million Americans over two years. Russia denies any meddling.
Facebook’s total advertising revenue rose 49 percent in the third quarter to $10.14 billion, about 88 percent of which came from mobile ads.
Analysts on average had expected total ad revenue of $9.71 billion, according to data and analytics firm FactSet.
Facebook in the third quarter gave advertisers for the first time the ability to run ads in standalone videos, outside the Facebook News Feed, and the company is seeing good early results, Chief Operating Officer Sheryl Sandberg told analysts on a conference call.
“Video is exploding, and mobile video advertising is a big opportunity,” Sandberg said.
More than 70 percent of ad breaks up to 15 seconds long were viewed to completion, most with the sound on, she said.
The 49 percent increase in total ad sales in the latest quarter compares with a 47 percent rise in the prior quarter and a 51 percent jump in the first quarter.
Facebook has been warning for more than a year about reaching a limit in “ad load,” or the number of ads the company can feature in users’ pages before crowding their News Feed.
Advertisers seem unfazed, though, spending heavily as the social network continues to attract users.
The nearly 50 percent jump in ad revenue “is phenomenal, especially when for the past few quarters they’ve been trying to bring that expectation way, way down. Yet it keeps going up,” Tigress Financial Partners analyst Ivan Feinseth said.
Of the Russia scandal enveloping Facebook publicly, Feinseth said: “In the bigger picture, I don’t think it’s a really big factor.”
The company’s performance was strong in comparison with smaller social media firms Snap Inc. and Twitter Inc. , Wedbush analyst Michael Pachter said.
“Facebook grew revenues by $3.3 billion year-over-year for the quarter. This is more than Twitter and Snapchat generate combined for the full year,” he said.
Facebook said about 2.07 billion people were using its service monthly as of Sept. 30, up 16 percent from a year earlier.
Analysts on average had expected 2.06 billion monthly active users, according to FactSet.
Net income rose to $4.71 billion, or $1.59 per share, from $2.63 billion, or 90 cents per share.
Analysts on an average were expecting the company to earn $1.28, according to Thomson Reuters.
Total revenue increased 47.3 percent to $10.33 billion beating analysts estimate of $9.84 billion, according to Thomson Reuters.
Various US investigations into how Russia may have tried to sway American voters in the months before and after last year’s elections are hanging over Facebook and its competitors.
There is also proposed US legislation that would extend rules governing political ads on television, radio and satellite to also cover digital advertising.
“We expect more scrutiny about Facebook’s ad system ahead,” analyst Debra Aho Williamson of research firm eMarketer said in a note. “We’re also monitoring for any signs that this investigation will have a material impact on ad revenue.”
Vietnam jails activist for anti-government posts on Facebook
- The conviction comes as communist authorities step up a crackdown on dissent
- Some 97 activists were in jail as of April this year, according to Amnesty International
HANOI, Vietnam: A court in southern Vietnam has sentenced an activist to 27 months in prison for Facebook posts that judges say insulted the ruling Communist Party and government and called for anti-government protests.
Doan Khanh Vinh Quang, 42, was convicted “abuse of democratic freedom to infringe on the legitimate interests of the state” by the People’s Court in Ninh Kieu District in Can Tho province after a one-day trial Monday, the Vietnam News Agency reported.
The agency quoted judges as saying Quang’s actions “actively abetted hostile and reactionary forces from inside and outside the country” who want to overthrow the party and government.
Court officials were not available for comment Tuesday.
The conviction comes as communist authorities step up a crackdown on dissent. Quang was third activist to be jailed in a week on similar charges.
On Saturday, Nguyen Hong Nguyen and Truong Dinh Khang, were convicted of insulting the Communist Party and its leaders, including late founding President Ho Chi Minh, and sentenced to two years and one year respectively in separate cases in Can Tho province.
Despite sweeping economic reforms over the past 30 years that opened Vietnam to foreign investment and trade that made it one of fastest growing economies in the region, the Communist Party tolerates no challenge to its one-party rule.
Some Western governments and international human rights groups criticize Vietnam for jailing people for peacefully expressing their views. Hanoi says only lawbreakers are put behind bars.
Some 97 activists were in jail as of April this year, according to Amnesty International.