Amid fallout from the Facebook Papers showing it failed to address the harms its social network has created around the world, Facebook on Monday reported higher profit for the latest quarter, buoyed by strong advertising revenue.
Facebook said its net income grew 17% in the July-September period to $9.19 billion, or $3.22 per share, up from $7.85 billion, or $2.71 per share, a year earlier.
Revenue grew 35% to $29.01 billion. Analysts, on average, were expecting earnings of $3.19 per share on revenue of $24.49 billion, according to a poll by FactSet.
Facebook’s stock price climbed $3.90, or 1%, to $332.43 in after-hours trading. It had closed up 1% for the day.
The company already predicted uncertainty for 2021 back in January, saying its revenue in the latter half of the year could face significant pressure. Because revenue grew so quickly in the second half of 2020, Facebook said at the time that it could have trouble keeping up that pace. But as the company’s stock price shows, investors were not surprised by Monday’s results.
Facebook, which is reportedly considering a rebranding – although it has declined to comment on what it called “rumors and speculation” following a report from the tech site The Verge – said it will break out Facebook Reality Labs as a separate segment beginning in the fourth quarter. This segment will include its products on augmented and virtual reality and related hardware, software and content.
Facebook said it had 2.91 billion monthly active users, on average, as of Sept. 30, an increase of 6% from a year earlier. The number of daily active users also grew 6% to 1.93 billion.
For all of 2021, Facebook said it expects revenue in the range of $31.5 billion to $34 billion. That’s below the $34.72 billion that analysts are expecting, according to FactSet. The company said its outlook reflects “significant uncertainty” it faces from Apple’s iOS 14 changes, as well as COVID-related economic factors. The anti-tracking shield included in iOS 14.5 had zapped smaller rival Snap’s profit earlier this month.