Q3 results: Facebook profits top $9 billion amid whistleblower scandal

Social-media giant posts slower sales growth on Apple privacy policy

Amid fallout from the Facebook Papers documents supporting claims that the social network has valued financial success over user safety, Facebook on Monday reported higher profit for the latest quarter.

The company's latest show of financial strength followed an avalanche of reports on the Facebook Papers — a vast trove of redacted internal documents obtained by a consortium of news organisations, including The Associated Press — as well as Facebook whistleblower Frances Haugen's Monday testimony to British lawmakers.

Facebook said its net income grew 17 per cent in the July-September period to $9.19 billion, buoyed by strong advertising revenue. That’s up from $7.85 billion a year earlier. Revenue grew 35 per cent to $29.01 billion. The results exceeded analyst expectations for Facebook's results. 

The company revealed in its Monday earnings report that it saw a 6 per cent year-on-year increase in daily active users, reaching an average of 1.93 billion for September 2021.

The company's shares rose 2.5 per cent in after-hours trading after closing up 1 per cent for the day. The company said it’s adding $50 billion to its stock buyback program, helping lift the shares about 2 per cent in extended trading, CNBC reported.

“For now, the revenue picture for Facebook looks as good as can be expected,” said eMarketer analyst Debra Aho Williamson. But she predicted more revelations and described the findings so far as “unsettling and stomach-churning.” CEO Mark Zuckerberg made only a brief mention of what he called the “recent debate around our company." 

Facebook warned that Apple Inc's new privacy rules would weigh on its digital business in the current quarter, after the social media company reported quarterly revenue below market expectations. The company expects fourth-quarter revenue to be in a range of $31.5 billion to $34 billion. Analysts had forecast $34.84 billion in revenue, or a 24.1 per cent jump, according to IBES data from Refinitiv. Its third-quarter revenue too faced the brunt of Apple's privacy rules that kept digital advertisers from using its ad services.

 Facebook it will start publishing the financial results of its augmented and virtual reality labs as a separate unit, where it is investing billions in its ambitions to build the "metaverse" and as it reported that its main advertising business faces "significant uncertainty."

After losing more than $150 billion in market value in less than two months, Facebook has surrendered its $1 trillion valuation tag, and the slump has cost it a place among the five most-valuable US companies. However, it has also made the stock the cheapest among the mega-cap U.S. technology names, trading at just 18.7 times forward earnings.