Facebook Earnings: Stock Surges After Hours on Major Q1 2021 Beat

Shares of Facebook surged in after-market trading Wednesday, spiking more than 5% after the social networking giant recorded a major earnings and revenue beat for the first quarter of fiscal 2021, a period marked by strong advertising revenue growth and a 10% rise in monthly active users.

Facebook logged diluted per-share earnings of $3.30 on total revenue of $26.17 billion, well ahead of Wall Street’s expected earnings of $2.37 per share on revenue of $23.67 billion for the March-ended quarter.

“We had a strong quarter as we helped people stay connected and businesses grow,” said Facebook founder and CEO Mark Zuckerberg. “We will continue to invest aggressively to deliver new and meaningful experiences for years to come, including in newer areas like augmented and virtual reality, commerce, and the creator economy.”

Facebook’s after-hours spike came after closing up 1.1% on Wednesday, outpacing the broader market’s flattish day.

The company’s Q1 figures included 1.88 billion daily active users, up 8% year over year, and 2.85 billion monthly active users, marking a 10% pop from the prior-year quarter.

Facebook CFO David Wehner highlighted ad revenue growth, which was fueled by a 30% rise in average ad prices and 12% growth in the number of ads delivered.

“We expect second quarter 2021 year-over-year total revenue growth to remain stable or modestly accelerate relative to the growth rate in the first quarter of 2021 as we lap slower growth related to the pandemic during the second quarter of 2020,” he said in the company’s earnings statement. He expects Q3 and Q4  revenue growth rates to “significantly decelerate,” however, as Facebook laps the prior-year’s strong quarters.

Facebook expects annual expenses to amount to $70 billion to $73 billion, up from prior guidance for $68 billion to $73 billion. Capital expenditures are projected to be in the range of $19 billion to $21 billion, down from previous targets of $21 billion to $23 billion. For a consecutive quarter, the company chafed at Apple’s platform privacy changes, which will allow iPhone and iPad users to stop companies from tracking certain user data, noting that it expects those headwinds in the current quarter.

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