Facebook profit nearly doubles as user ranks soar amid Covid-19

SAN FRANCISCO • Facebook has beaten Wall Street expectations for both quarterly revenue and profit but warned that growth later this year could "significantly" decline as new Apple privacy policies will make it more difficult to target ads.

A surge in digital ad spending during the Covid-19 pandemic when consumers shopped online, along with higher ad prices, helped Facebook revenue surge 48 per cent.

Looking ahead, the world's largest social network said on Wednesday that it will focus on building e-commerce features to expand beyond its ad business.

Shares of Facebook rose 6.5 per cent to US$326 in extended trading on Wednesday.

"We have a long way to go to build out a full-featured commerce platform... but I am very committed to getting there," Facebook chief executive Mark Zuckerberg told analysts on a conference call.

Total revenue, which consists mainly of ad sales, hit US$26.17 billion (S$34.8 billion) in the first quarter ended March 31, beating analysts' average estimate of US$23.67 billion, according to IBES data from Refinitiv.

The digital advertising industry has boomed during the pandemic, benefiting Facebook and others including Google, whose parent company Alphabet reported record quarterly profit on Tuesday.

"Despite headwinds - such as ongoing antitrust scrutiny, lingering privacy concerns, as well as looming changes which could negatively impact its advertising business - Facebook delivered another blockbuster quarter," said Investing.com analyst Jesse Cohen.

Mr Zuckerberg said the company plans to focus on three key areas: building augmented and virtual reality, e-commerce features, and helping content creators earn money on Facebook's platforms.

Monthly active users on the social network rose 10 per cent to 2.85 billion.

Net income for the first quarter was US$9.5 billion, or US$3.30 per share, up from US$4.9 billion, or US$1.71 per share, a year earlier. Analysts had expected a profit of US$2.37 per share.

Facebook, Google, Amazon and Apple are among tech titans that have thrived as the pandemic accelerated a shift to working, learning, shopping and socialising online.

Still, Facebook warned that it expects "increased ad targeting headwinds" this year from regulation as well as privacy changes made in the latest version of the operating system running Apple mobile devices.

An update to iOS software powering about a billion iPhones around the world kicked in this week with an enhanced privacy feature.

Apple began requiring app makers to tell users what tracking information they want to gather and get permission to do so. The move has sparked a major rift with Facebook and other tech rivals and could have major implications for data privacy and the mobile ecosystem.

AGENCE FRANCE-PRESSE, REUTERS