Due to the substantial increase in advertising revenue, especially the average price of advertising provided to nearly 3 billion users, Facebook’s profit in the second quarter doubled.
However, the company said that it does not expect revenue to continue to grow at such an amazing rate in the second half of the year.
The Menlo Park, California-based company had a profit of $10.39 billion from April to June, or $3.61 per share. This is higher than the US$5.18 billion a year ago, or US$1.80 per share.
Apple, Alphabet, and Microsoft report that total profits in the second quarter of 2021 exceed $50 billion
Revenue jumped 56% from 18.32 billion U.S. dollars to 28.58 billion U.S. dollars. A poll by FactSet shows that analysts on average expect earnings per share of $3.04 and revenue of $24.85 billion.
The average price of each ad has increased by 47% year-on-year, and the number of ads shown to people has increased by 6%, driving the growth of advertising revenue. Facebook said it expects that the price of advertising, rather than the number of ads placed, will continue to drive growth.
The company said that, as before, it expects that its ability to target ads will face challenges this year—including regulatory pressures and Apple’s privacy changes, which make it more difficult for companies like Facebook to track people who can opt out of this form of surveillance.
As of June, Facebook had 2.9 billion users per month, an increase of 7% year-on-year.
The stock price fell $11.77, or 3.2%, to $373.28 in after-hours trading. Earlier in the day, the stock hit a record high of $377. 55 Expected results, so the decline is not unexpected.
© 2021 Canadian Press
