By Deepa Seetharaman 

Facebook Inc. recorded rising revenue and profits in the first quarter as advertisers were undeterred by controversies around the site's mishandling of user data and struggles to police its platform.

The social-media giant reported a quarterly per-share profit of $1.69, up from $1.04 a year earlier, while revenue rose nearly 50% to $11.97 billion. Net income rose 63% to nearly $5 billion, compared with $3.06 billion a year ago.

Analysts expected Facebook to report a per-share profit of $1.35 and quarterly revenue of $11.41 billion, according to data compiled by Thomson Reuters.

Facebook added about 70 million monthly users during the first three months of the year bringing its overall user base to 2.2 billion, up from 2.13 billion at the end of 2017.

Advertising revenue, the main driver of Facebook's top line, rose to about $11.8 billion in the first quarter, up 50% from the $7.86 billion collected a year ago. A hefty 91% of that amount was from mobile advertising, up from 85% the year earlier.

Facebook's earnings report marks the first detailed look into how the company's ties to political data firm Cambridge Analytica are affecting the Silicon Valley giant's business.

Cambridge Analytica aided the Trump campaign in 2016 and allegedly bought data about tens of millions of Facebook users from an outside developer. The incident, disclosed in mid-March, highlighted Facebook's at times lax oversight of how outside developers handled user data they extracted from the platform.

Cambridge Analytica has denied wrongdoing.

Facebook Chief Executive Mark Zuckerberg appeared twice in front of U.S. lawmakers this month in hearings centered on the controversy, and Facebook has redoubled efforts to stamp out abuse. Still most analysts and investors believe additional regulation is inevitable, although it isn't clear what form it will take or what impact it would have on Facebook's bottom line.

Mr. Zuckerberg told lawmakers this month that he was open to some forms of regulation but added that too many rules could impede American tech companies from competing head-to-head with Chinese rivals.

The uproar over Cambridge Analytica is the latest episode to spark widespread questions over Facebook's imprint on society. The period since the 2016 presidential election has been among the rockiest in the company's 14-year history, with users, advertisers and lawmakers questioning whether the company sacrificed security and privacy in pursuit of relentless growth.

Since reaching an all-time high in early February, Facebook shares have fallen more than 18%.

In after-hours trading Wednesday, Facebook shares rose 4.3% to $166.57.

Earlier this week, Facebook's biggest rival in the online-ad space, Google parent Alphabet Inc., reported profits for the first three months of the year that topped expectations, but investors grappling with the company's higher expenses sent the shares down 4.8%, the stock's worst session in more than two months.

Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com

 

(END) Dow Jones Newswires

April 25, 2018 16:47 ET (20:47 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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