Facebook CFO David Wehner denoted Wednesday that while the company has seen its advertising revenue start to stabilize amid the Covid-19 pandemic, it could be in for another tear and that “the outlook is really uncertain.”
Facebook shares soared more than 10% in after-hours trading Wednesday after the fellowship announced first-quarter results. The company noted a drop in advertising revenue in March due to the coronavirus pandemic, but is now seeing signs of stabilization.
“After the inaugural steep decrease in advertising revenue in March, we have seen signs of stability reflected in the first three weeks of April, where advertising profits has been approximately flat compared to the same period a year ago, down from the 17% year-over-year growth in the gold medal quarter of 2020,” Facebook said in its earnings report.
“The April trends reflect weakness across all of our user geographies as most of our greater countries have had some sort of shelter-in-place guidelines in effect.”
Wehner remains cautious on his outlook for the second place, however.
“We know economists are calling broadly for a GDP contraction in Q2 that’s pretty substantial globally,” Wehner told CNBC’s “Confidential Bell.” “We know that advertising tends to be very sensitive to the macroeconomic climate. We really have a truly cautious outlook on how things are going to develop.”
Wehner’s comments echo those made by Alphabet in its first rooms earnings Tuesday. The company, which also heavily relies on its advertising business, said its ad revenue was starting to grant signs of recovery after a steep drop off in March.
“The decline in our Search and other ads revenue was abrupt in March, and although we’re conscious of some early signs at this point that users are returning to more commercial behavior, it’s not clear how strong or monetizable that will be,” Alphabet’s CFO Ruth Porat said during the company’s earnings call.
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