Investing.com – Shares of Facebook rallied in after-hours trade on Wednesday as first-quarter results topped expectations on both the top and bottom lines.
Facebook (NASDAQ:FB) rose more than 6% postmarket after closing down 0.85% to $182.58 in regular trading.
The social media giant reported earnings per share, excluding items, of $1.89 on $15.08 billion in revenue for the first quarter. Earnings were up That beat expectations from Investing.com for earnings of $1.61 a share on $14.97 billion in revenue.
Monthly active users (MAUs), one of the key metrics that analysts use to gauge the health of the company, increased 8% to 2.38 billion in the first quarter, above estimates for 2.36 billion. Daily active users (DAUs) showed robust growth for the quarter, rising 8% to 1.56 billion.
"(W)e estimate that more than 2.1 billion people now use Facebook, Instagram, WhatsApp, or Messenger (our "Family" of services) every day on average, and around 2.7 billion people use at least one of our Family of services each month," Facebook said in a statement.
Mobile advertising revenue represented about 93% of advertising revenue for the 2019 first quarter, up from approximately 91% of advertising revenue in the first quarter of 2018.
The social media company saw margins more than halve to 22% for the quarter from 46% a year earlier as costs surged 80% to $11.8 billion. Costs included $3 billion set aside for legal expenses due to the FTC inquiry. That reduced earnings under GAAP rules to 85 cents a share.
"In the first quarter of 2019, we reasonably estimated a probable loss and recorded an accrual of $3.0 billion in connection with the inquiry of the FTC into our platform and user data practices ... We estimate that the range of loss in this matter is $3.0 billion to $5.0 billion. The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome," Facebook added.
Facebook's better-than-expected quarterly results came as CEO Mark Zuckerberg reiterated plans to ramp up spending to beef up security on the platform in the wake of numerous security breaches.
"We had a good quarter and our business and community continue to grow," Zuckerberg said. "We are focused on building out our privacy-focused vision for the future of social networking, and working collaboratively to address important issues around the internet."