With 2.2 billion active users, Facebook Q1 profit rises 63%

Reuters Facebook Inc has reported a surprisingly strong 63 per cent rise in profit and an increase in users, with no sign that business was hurt by a scandal over the mishandling of personal data.

After easily beating Wall Street expectations, shares traded up 7.1 per cent at $170.95, paring a month-long decline that began with Facebook’s disclosure in March that consultancy Cambridge Analytica had harvested data belonging to millions of users.

Facebook’s quarterly profit beat analysts’ estimates, as a 49 per cent jump in quarterly revenue outpaced a 39 per cent rise in expenses from a year earlier. The mobile ad business grew on a push to add more video content.

Facebook said monthly active users in the first quarter rose to 2.2 billion, up 13 per cent from a year earlier and matching expectations, according to Thomson Reuters.

The company reversed last quarter’s decline in the number of daily active users in the US and Canada, saying it had 185 million users there, up from 184 million in the fourth quarter.

It is spending to ensure users are not scared away by scandals. Chief Financial Officer David Wehner told analysts on a call that expenses this year would grow between 50 per cent and 60 per cent, up from a prior range of 45 per cent to 60 percent.

Much of Facebook’s ramp-up in spending is for safety and security, Wehner said. The category includes efforts to root out fake accounts, scrub hate speech and take down violent videos.

Facebook said it ended the first quarter with 27,742 employees, up 48 per cent from a year ago.

Net income attributable to Facebook shareholders rose in the first quarter to $4.99 billion from $3.06 billion a year ago.

Analysts on average were expecting a profit of $1.35 per share, according to Thomson Reuters. Total revenue was $11.97 billion, above the analyst estimate of $11.41 billion.

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