Facebook reported its profit doubled in the recently ended quarter as digital advertising surged, but predicted Wednesday a cooler growth in the months ahead due to an update resulted in its share sinking.
Facebook’s profit jumped to $10.4 billion on revenue of $29 billion, a 56% increase from last year, mainly from a jump in advertising (ad) revenues.
Facebook said in its second-quarter report that the number of people using the social network monthly climbed to 2.9 billion, a Year-over-Year (YoY) gain of 7%.
And some 3.5 billion people used at least one of the company’s apps including Instagram, WhatsApp and Messenger.
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“We had a strong quarter as we continue to help businesses grow and people stay connected,” Facebook chief executive Mark Zuckerberg said in an earnings release.
Slow growth
However, Facebook shares slipped some 4% as the tech giant warned that growth was expected to slow due to regulatory actions and a tweak to the iPhone operating software that could hurt its ad targeting.
“We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recent iOS updates,” Facebook said in the earnings release.
Apple began requiring apps to tell users of its mobile devices what tracking information they want to collect and get permission to do so.
The move by Apple early this year has sparked a major rift with Facebook and other tech rivals and could have major implications for data privacy and the mobile ecosystem.
Opting out of being tracked makes it harder for companies such as Facebook to target the ads on which they depend for revenue.
