SAN FRANCISCO (AP) — Facebook said it could face a fine of up to $5 billion as the result of an investigation by the Federal Trade Commission. The agency has been investigating Facebook for possible privacy violations, but has not announced any findings yet.
The company set aside $3 billion in its quarterly earnings report Wednesday as a contingency against the possible penalty.
The one-time charge slashed Facebook’s first-quarter net income considerably, although revenue grew by 25% in the period. The FTC has been looking into whether Facebook broke its own 2011 agreement promising to protect user privacy.
Investors shrugged off the charge and sent the company’s stock up nearly 5% to $190.89 in after-hours trading.
Facebook has had several high-profile privacy lapses in the past couple of years. The FTC has been looking into Facebook’s involvement with the data-mining firm Cambridge Analytica scandal since last March. That company accessed the data of as many as 87 million Facebook users without their consent.
The social network said Wednesday that its net income was $2.43 billion, or 85 cents per share in the January-March period. That’s down 51% from $4.99 billion, or $1.69 per share, a year earlier, largely as a result of the $3 billion charge.
Revenue grew 26% to $15.08 billion from a year earlier. Excluding the charge, Facebook earned $1.89 per share.
Analysts polled by FactSet expected earnings of $1.62 per share and revenue of $14.98 billion.
Facebook’s monthly user base grew 8% to 2.38 billion. Daily users grew 8% to 1.56 billion.
(Copyright (c) 2020 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)