Facebook’s and PayPal’s profits rise but eBay takes a hit
Twitter reports higher revenues and user growth
Facebook’s quarterly profit and revenue beat analysts’ estimates on Wednesday, as the social media company’s mobile ad business grew on a major push to add more video content.
Facebook’s quarterly profit and revenue beat analysts’ estimates on Wednesday, as the social media company’s mobile ad business grew on a major push to add more video content. Shares of the company, which have fallen 9.5 per cent this year, were up 2.2 per cent at $163.18 (€138.19)after the bell.
Facebook said monthly active users in the first quarter rose to $2.2 billion, up 13 per cent from a year earlier. Analysts on average had expected monthly active users of 2.2 billion. Net income attributable to Facebook shareholders rose to $4.99 billion, or $1.69 per share, from $3.06 billion, or $1.04 per share, a year earlier. Analysts on average were expecting a profit of $1.35 per share. Total revenue rose 49 per cent to $11.97 billion, above the analyst estimate of $11.41 billion.
PayPal reported a 33.1 per cent rise in first-quarter profit as more customers used the payment processor’s platform for transactions. The company’s net income rose to $511 million, or 42 cents per share, in the quarter ended March 31st, from $384 million, or 32 cents per share, a year earlier. Net revenue rose to $3.69 billion from $2.98 billion, while payments volume rose 31.5 per cent to $132.36 billion.
EBay reported a 60.7 per cent drop in first-quarter profit on Wednesday, as it spent more on its ecommerce platforms to attract more customers. The company’s net income fell to $407 million, or 40 cents per share, in the quarter ended March 31st, from $1.04 billion, or 94 cents per share, a year earlier. Revenue rose to $2.58 billion from $2.30 billion.
Twitter also flew in the face of Wall Street’s expectations to maintain its profitability and report higher revenues and user growth, sending shares up more than 6 per cent in pre-market trading.
The social media company reported its first profit in 12 years last quarter, but was expected to return to a net loss in the first quarter of the year. Instead it reported net income of $61 million (€50 million) in the three months to March 31st, down from $91 million at the end of last year but far outstripping expectations.
“The first quarter was a strong start to the year,” said Jack Dorsey, Twitter’s chief executive. He added that the company had introduced a new framework for thinking about the “health” of online conversations after a string of scandals over abuse and bots on the platform: “This holistic approach will help us more effectively address these challenges by viewing them through the broader lens of the health of the public conversation, and we’re encouraged by our initial progress in this area.”
Twitter said monthly active users increased by 2 per cent to 336 million on the previous quarter, reassuring investors who are concerned its audience growth has stagnated over the past year.
Revenues increased 21 per cent to $665 million compared with the same period the year before. Twitter has struggled to attract the advertising dollars of its larger rivals Google and Facebook but benefited more recently after unveiling a range of new products such as a live-streaming video function for sports and news and doubling its character limit for tweets.
The upbeat results will give the smaller social media platform a boost as it attempts to reassure investors it can fend off increasing competition from Facebook’s Instagram and Snap, which will report first quarter results next week. In pre-market trading shares rose 6 per cent.
– Copyright The Financial Times Limited 2018/Bloomberg/Reuters