META Meta Platforms Inc

By Dan Gallagher 

Facebook is a hard friend to dump, even when it has it coming.

The social network's first-quarter report Wednesday afternoon showed that about 48 million daily active users signed up during the period. That was up 3.4% from the December quarter and was in line with Wall Street's expectations. Assuming that at least some of them read newspapers, that alone was remarkable considering the scandal that erupted late in the period involving Cambridge Analytica that landed CEO Mark Zuckerberg before Congress and relieved the company of nearly $74 billion in market value.

Facebook has yet to fully recover from that affair. The company also still faces the difficult task of improving the security of its network, not to mention its public image. Mr. Zuckerberg spoke at length about this in the company's earnings call Wednesday afternoon, reiterating a promise to "invest heavily" in the effort.

The bill is still pending. The company's total costs and expenses rose 39% year over year for the quarter, below the 50%-60% boost the company is now projecting for the full year.

But Wednesday's results suggest the world's largest social network isn't easily unplugged. Facebook's ability to keep users and to convince even more to join means that advertisers aren't going anywhere either. Advertising revenue jumped 50% year over year to $11.8 billion. Also worth noting is that revenue in the U.S. and Canada -- nearly half of the company's total -- jumped 44% year over year despite less than 2% growth in the company's daily user base in those countries during the period.

Much remains unknown, including what form new regulations may take and how they could impact social media profits. But even a 7% price jump in after-hours trading Wednesday keeps Facebook around 20 times forward earnings, adjusted for net cash. That is slightly below Google-parent Alphabet's valuation and a bargain compared to much smaller Twitter. Given the clouds hanging over it, it may be a while before Facebook can command much more.

-end

(END) Dow Jones Newswires

April 25, 2018 18:31 ET (22:31 GMT)

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