Facebook anticipates an FTC privacy fine of up to $5B US

Facebook said it could face a fine of up to $5 billion US 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 per centin 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 fiveper centto $190.89 in after-hours trading.

Hot water over privacy lapses

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 per centfrom $4.99 billion, or $1.69 per share, a year earlier, largely as a result of the $3 billion charge.

The results missed Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of $1.66 per share.

Revenue grew 26 per centto $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 per centto 2.38 billion. Daily users grew 8 per centto 1.56 billion.