Zuckerberg Has a Dirty Little Secret

Despite all the issues hitting Facebook, its business continues humming along. The social media giant released second-quarter earnings and, while the stock initially jumped in after-hours trading, it has since gone flat.

Revenue not only beat estimates but grew 28 percent from $13.2 billion. Why does this matter? It tells us that advertisers not only consider Facebook to be a premier advertising platform, but they are spending more on it than last year – and by a significant amount.

However, costs and expenses rose by 23 percent to $9.16 billion from $7.37 billion. This does not include a multi-billion dollar charge for Facebook’s FTC settlement and another $1.1 billion on a tax-related court case that Zuckerberg and friends lost.

So while adjusted operating income grew to $7.7 billion from $5.86 billion (an increase of 32 percent), the cost to generate that increase was higher. On the bottom line, net income excluding those significant charges came in at $5.72 billion, up only 12 percent from last year’s $5.1 billion.

Reference: https://www.ccn.com/news/facebook-earnings-dirty-little-secret/2019/07/25/

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Author: Neo Anderson

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