Facebook Inc.’s first-quarter sales rose 48%, surging past analysts’ estimates thanks to strong demand from retailers and other advertisers seeking to grab attention from the social network’s billions of users.
Revenue climbed to $26.2 billion, the company said Wednesday in a statement. That dwarfed the $23.7 billion average estimate of analysts, according to data compiled by Bloomberg. Facebook reported 2.85 billion monthly active users, a rise of 10%. Analysts projected 2.83 billion. Shares jumped about 5.5% in late trading.
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Menlo Park, California-based Facebook, which also owns Instagram and WhatsApp, has seen a surge in use of its platforms for at-home entertainment and keeping up with loved ones while people have been stuck in lockdown. Larger advertisers have shifted more of their marketing budgets to social media sites, while small businesses ramped up digital outreach to tap potential customers. So far, the company hasn’t seen a slowdown as consumers return to more offline activities as the pandemic begins to subside.
Net income in the March quarter rose to $9.5 billion, or $3.30 a share, Facebook said. Analysts on average had projected $2.34 in per-share profit.
The company’s shares, which closed at $307.10 in New York, jumped as high as $328 in extended trading following the earnings report. The stock has gained 12% this year, slightly ahead of the increase in the S&P 500 Index.
In the statement, Facebook said sales in the current period will remain steady or accelerate from the first quarter, but repeated its caution that growth may stall in the second half of 2021. In the coming months, Facebook also faces a potential risk to its advertising business as Apple Inc. adds privacy restrictions on iPhones and other devices that could chip away at the social media giant’s ability to collect user data, which powers its targeted advertising model.