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Facebook marks $3 billion for privacy penalty

Facebook on Wednesday blew past Wall Street profit estimates in the first quarter and set aside $3 billion to cover a settlement with US regulators, calming investors who had worried about the outcome of a months-long federal probe.

Shares of the world’s biggest online social network jumped more than 10% to $200.5 in after-hours trade. They have now regained much of the ground lost last year amid slowing growth and costs associated with the company’s privacy scandals.

The settlement accrual, which Facebook set at $3 billion but said could rise as high as $5 billion, cut the company’s net income in the first quarter to $2.4 billion, or 85 cents per share.

Excluding the charge, Facebook would have earned $1.9 a share, up from $1.7 in the year-ago quarter, according to IBES data from Refinitiv.

Total first-quarter revenue rose 26% to $15.1 billion from $12 billion last year, again beating analysts’ average estimate of $15 billion. “This is a strong report suggesting that advertisers still see value in Facebook’s platform, as they did before the controversies and scandals erupted,” said Haris Anwar, senior analyst at financial markets platform Investing.com.

Monthly and daily users of the main Facebook app were both up 8% compared to last year, to 2.4 billion and 1.6 billion, respectively, in line with forecasts.

News credit : Indiatimes