After coming across a sales drop in March, Facebook Inc is expecting its sales growing in April as it is seeing “signs of stability” in the ad business while posting beating quarterly revenue on Wednesday, strengthening the market speculation that tech giants are more capable than any other sector to withstand current economic crisis caused by the coronavirus pandemic.
The world’s biggest social network and the owner of Instagram and WhatsApp, said that in the first three weeks of April its revenue from advertising remained roughly flat while comparing it with same period of the last year. This is pointing though provisionally but towards its recovery from a sudden sales drop of last month when most of the countries around the world were implementing began implementing stay-at-home policies in their efforts to reduce spread of the virus.
In the first quarter, Facebook succeeded to beat analysts’ estimates for revenue growth by posting a growth of 18% against estimates of 16%, according to IBES data from Refinitiv. Although that revenue growth rate was Facebook’s slowest ever pace but still beat expectations while posting ad sales of $17.44 billion which grew by 17%.
Escalated gaming ads helped Facebook in sustaining overall sales as company faced significantly declining ads from auto and travel sectors which got comparatively hard blow from the pandemic while its e-commerce and technology ads remained stable, Facebook’s Chief Operating Officer Sheryl Sandberg briefed analysts.
Analysts still seeing Facebook’s second quarter outlook to be a depressing one because advertisers across industries are cutting their marketing budgets to weather the burden mounted by the uncertainty in the virus outbreak. And direct-to-consumer products and small businesses are also included in those cutting their budgets to save money, which used to be marketing heavily on the social media platforms especially on Facebook.
But eMarketer analyst Debra Aho Williamson, seeing other side of the picture, is viewing April’s flat revenue as indication of more challenging second quarter than first as countries as well as businesses would be coming back to normal at different paces because of the different times of lockdowns in different countries.