Facebook Keeps Growing, But Pledges to Protect the Community Over Profitability

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Facebook, Inc. (NASDAQ: FB) may have been getting grilled in Washington, D.C. over its easy allowance of questionable advertisements from Russia during the election, but its earnings results are now out. The initial reaction was positive after the report.

The social media giant reported earnings per share (EPS) of $1.59 on $10.328 billion in revenues. Thomson Reuters had the consensus estimates at $1.28 EPS and $9.84 billion in revenues. The quarterly operating margin was 50% and mobile advertising revenue accounted for 88% of all ad revenues — up from 84% a year ago.

The daily active users were 1.37 billion, up 16% from a year ago. Monthly active users were 2.07 billion, up 16% from the prior year.

Capital spending was $1.76 billion in the quarter, and Facebook ended the quarter with cash and cash equivalents of $38.29 billion. The company’s headcount was 23,165 as of September 30, 2017 — up 47% year-over-year.

CEO Mark Zuckerberg did address the recent dilemma on questionable ads in his commentary. He even went as far as to say that Facebook would invest in preventing abuse at the expense of the company’s profitability. His quote said:

Our community continues to grow and our business is doing well. But none of that matters if our services are used in ways that don’t bring people closer together. We’re serious about preventing abuse on our platforms. We’re investing so much in security that it will impact our profitability. Protecting our community is more important than maximizing our profits.

Facebook shares closed up 1.4% at $182.66 on Wednesday ahead of the report, and the shares were last seen up 1.3% more at $185.04 in the after-hours trading session following the earnings gains. Facebook’s 52-week range was $113.55 to $182.90 prior to the after-hours pop.

Its consensus analyst target price was last seen at $196.53. Facebook had a market cap of $530 billion as of Wednesday.