Facebook shares jumped nearly 10 percent in premarket trading after the social media giant reported soaring revenue that easily beat Wall Street estimates during the first quarter.
The San Francisco-based company posted $10.8 billion in revenue, up 47 percent from a year ago. Ad sales climbed 49 percent to $10.3 billion.
That revenue figure easily topped $10 billion from several analysts who had projected the company would post $10.4 billion in revenue. In addition, Facebook reported profits of $4.9 billion, or $1.88 per share. Wall Street was expecting profits of $1.69 per share.
The big rise in advertising revenue means Facebook is bringing in more money from ad sales than ever before. However, Facebook Inc. said it paid a small price for that strong revenue.
During a call with reporters, Facebook Chief Financial Officer David Wehner warned that a recent privacy scandal might have “adverse effects” on revenues and user growth for the remainder of 2018.
“[Mark Zuckerberg] has a pointed commentary on the impacts on us,” Wehner said. “I wouldn’t go as far as to say we are concerned about the future of the business or the long-term long-term viability of the business. … But that being said, we have to be extremely prudent to think about the impact of this on our business.”
Investors cheered the news, sending Facebook shares up $16.28, or 10.4 percent, to $141.60 before the company’s quarterly report was released at 7 a.m. ET Thursday.
At yesterday’s (Thursday) lockup expiration, all 222 million shares of early investors and employees holding Class B shares of Facebook and 166 million Class A shares of Facebook went free. Facebook employees can sell their stock immediately, while early investors and employees holding Class A shares must wait 180 days.
Sources told Fox News that Zuckerberg held off selling any of his shares during the reporting period, hoping to sell fewer shares when the lockup expires next month.
“I remain fully committed to the long-term success of Facebook and I believe in the extraordinary work our community is doing to make the world more open and connected,” Zuckerberg said in a statement released Thursday.
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