Facebook Spikes To Record High After Revenue Beat, Despite Anti-Trust Probe

After paying a record fine and agreeing to adjust the management structure over privacy breaches - and facing a DoJ probe - Facebook shares soared intraday ahead of tonight's earnings, and prices soared even higher after hours as the company showed better than expected revenues and Daily Active Users.

Key highlights include (via Bloomberg):

• Revenue - 2Q Revenue rose to $16.89bn (beating expectations of $16.49bn).

• Daily active users (DAUs) – DAUs were 1.59 billion on average for June 2019, an increase of 8% year-over-year. Most of Facebook's growth is coming from Asia. The U.S. and Canada only added 1 million users, and Europe is flat. But Asia now has 615 million users, compared with 600 million the prior quarter.

• Monthly active users (MAUs) – MAUs were 2.41 billion as of June 30, 2019, an increase of 8% year-over-year.

• Expenses - expenses remain elevated

• Incomes - income from operations considerably lower.

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• EPS - on 0.91 EPS has this disclosure: Includes an additional $2.0 billion legal expense accrued in the second quarter of 2019 related to the FTC settlement and $1.1 billion in income taxes due to the developments in Altera Corp. v. Commissioner as discussed in our Q2 2019 Press Release. Excluding these expenses, our diluted EPS would have been $1.08 higher 

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• Mobile advertising revenue – Mobile advertising revenue represented approximately 94% of advertising revenue for the second quarter of 2019, up from approximately 91% of advertising revenue in the second quarter of 2018.
• Capital expenditures – Capital expenditures, including principal payments on finance leases, were $3.78 billion for the second quarter of 2019.
• Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $48.60 billion at the end of the second quarter of 2019.
• Tax Rate - Facebook reports 46% effective tax rate due to $2BN FTC legal expense. Excluding the charge, Facebook's tax rate would have been 16%.
• Headcount – Headcount was 39,651 as of June 30, 2019, an increase of 31% year-over-year.

Finally, as we noted yesterday, Facebook acknowledges that the FTC has opened an anti-trust investigation into the company.

But that doesn't seem to have spooked investors as they buy the stock up to a record high

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Although that stop-run appears to have used up all the squeeze ammo and FB shares are fading...

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