When Facebook released its first-quarter financial report on Wednesday, it beat Wall Street’s sales and earnings projections, boosting the company’s stock price rise 5% in after-hours trade. Facebook is already within striking distance of becoming the next trillion-dollar tech behemoth, thanks to a surge in the stock market.
The social networking business joins Apple, Microsoft, Amazon, and Alphabet, the parent company of Google, as the sixth American company to reach the milestone. After a favorable legal judgement dismissing an antitrust complaint brought by the US Federal Trade Commission and a coalition of state attorneys general, the company’s stock rose 4.2 percent to $355.64.
Personalized advertising that is shown to Facebook and Instagram users accounts for nearly all of Facebook’s revenue. The company also has a growing hardware division, which is working on devices including as the Portal video-calling gadget, Oculus virtual-reality headsets, and smart eyewear, all of which are expected to be available in 2021. Facebook’s earnings per share came in at $3.30, far exceeding analysts’ expectations of $2.37. The corporation also reported its second-best quarter in terms of sales, with $26.2 billion in assets vs $23.7 billion projected by experts. Sales on Facebook climbed by 48 percent in the first quarter of this year compared to the same period last year. The company’s net income of $9.5 billion was nearly double the $4.9 billion it posted in the first quarter of 2020.
In addition, the business recorded 1.88 billion daily users, an increase of 8% year over year. Overall, monthly active users climbed 10% year over year to 2.85 billion. In the United States and Canada, where Facebook has 195 million users, the company reported flat growth. Facebook also said that 2.72 billion people use at least one of its programs on a daily basis, including Instagram, Messenger, and WhatsApp. In the early after-market trade, Facebook’s stock price increased 5%, bringing it to $322 per share.
If those gains hold, Facebook will set a new all-time high on Wall Street on Thursday. Facebook’s market capitalization has risen to $915 billion, putting it on track to become the next digital juggernaut worth at $1 trillion.
In a statement, Facebook CEO Mark Zuckerberg stated, “We had a solid quarter as we helped people stay connected and companies develop.” “We will continue to spend heavily for years to come in order to create new and meaningful experiences, especially in newer areas such as augmented and virtual reality, commerce, and the creator economy.”
After reporting dismal revenue and user data for the second quarter of that year, the company saw a massive 19 percent reduction in 2018. Data leaks, fake news, and, most infamously, the Cambridge Analytica scandal, in which a data firm inappropriately obtained the data of 87 million Facebook users and used it to target ads for Donald Trump during the 2016 presidential election, all contributed to the dip. Notwithstanding the scandals, Facebook has been able to recover and has managed to grow its consumer base and average income per person. Since July 27, 2018, the stock price has increased by more than 90%.