Continuing to resemble two entirely different companies, Facebook Inc. today reported upside earnings results that stand in stark contrast to a continuing stream of bad news on the regulatory, political and privacy fronts.

The social networking giant reported a third-quarter net profit of $6.1 billion, or $2.12 a share, up 20% from a year ago. Thanks as usual to strong sales of mobile ads on the Facebook and Instagram apps, revenue rose 29%, to $17.7 billion.

Analysts had forecast Facebook, which also owns the messaging app WhatsApp, would report an adjusted profit of $1.91 per share on revenue of $17.36 billion.

Not surprisingly, investors liked what they saw. Facebook’s shares were rising about 2% in initial after-hours trading. In regular trading, they fell less than a point, to $188.25 a share. The stock is up more than 40% since the start of the year.

That rise in extended trading bumped up to about 5% after Chief Financial Officer David Wehner provided updated guidance for the fourth quarter and 2020. Wehner said the company expects “more pronounced deceleration,” to the mid- to high single-digit percentages in the fourth quarter from the third quarter because of ad targeting headwinds and new products and services that provided benefits last year. But he said the deceleration will be”less pronounced” in the first quarter of 2020.

As for expenses, Wehner forecast $46 billion to $48 billion for 2019 as a whole, including the $5 billion FTC fine. He also predicted $16 billion in capital spending, down from a previous estimated range of $16 billion to $18 billion. For 202o, he reckons $54 billion to $59 billion in expenses partly because of plans to reaccelerate headcount growth and $17 billion to $19 billion in capital spending.

Just as in the previous quarter, when Facebook was facing a seemingly endless stream of negative news, the company started the third quarter ended Sept. 30 by announcing a $5 billion fine by the Federal Trade Commission for various privacy violations, for which it took separate charges in the first and second quarters. It also revealed that the FTC had opened a formal antitrust probe, a day after the Justice Department announced another antitrust investigation of Facebook and other major tech companies.

In a continuing nod to those issues, founder and Chief Executive Mark Zuckerberg said in prepared remarks that the company is “focused on making progress on major social issues and building new experiences that improve people’s lives around the world.”

In addition, on the earnings conference call with analysts, Zuckerberg spent more than 10 minutes explaining Facebook’s policies on “free expression,” which he said includes political ads — drawing a stark difference from Twitter Inc., which announced today it would no longer run them. Zuckerberg added that those ads will constitute less than 0.5% of its revenue in 2020, which he said belies the claim by some that it runs them chiefly to make more money.

But also as in the second quarter, despite a new series of attacks in this presidential election season on issues ranging from its advertising policies to its proposed Libra cryptocurrency, Facebook’s business seems little-affected so far by all the controversies.

“Advertisers continue to support Facebook, despite the many controversies swirling around the company, and the user base also continues to expand around the world,” said eMarketer Principal Analyst Debra Aho Williamson. “Yes, Facebook has a lot of challenges it must deal with, but increasing its revenue and user count isn’t one of them. Facebook and Instagram offer what marketers want: precise targeting capabilities and the ability to reach a mass audience with their advertising.”

In particular, they like the ability to reach people via their mobile devices, with mobile ads now comprising 94% of Facebook ad revenues.

“Though Facebook’s growth is no longer explosive — this is the third quarter in a row where revenues grew at less than 30% — the company’s efforts to broaden its market strategy and exposure appear to be paying off,” said Charles King of Pund-IT Inc. “Mobile ads still drive the lion’s share of the company’s revenues and earnings, but it appears to be succeeding in monetizing platforms and features such as Instagram and Stories.”

Yuval Ben-Itzhak, CEO of the social media marketing platform Socialbakers, told SiliconANGLE that advertisers are keen to use Facebook’s newer offerings in addition to their recent embrace of Instagram. “By adding Facebook Horizon, Facebook News and other new formats to its family of apps, Facebook will remain the best option for marketers who want to reach audiences with engaging content at scale,” he said.

According to eMarketer, Facebook has 21% of the worldwide digital ad market, second only to Google LLC at 32%. And people apparently aren’t leaving the service in any numbers. The number of daily active users on Facebook rose 9% from a year ago, to 1.62 billion people, and monthly active users rose 8%, to 2.45 billion. Facebook’s preferred “Family” metric, the number of deduplicated people using Facebook, Instagram, Messenger or WhatsApp, came in at 2.2 billion daily and 2.8 billion monthly.

Still, the impact of all the controversy could hit home at some point. CFO Wehner had warned three months ago that revenue growth could slow in the fourth quarter and into the new year because of regulatory pressure on ad targeting and potential limits on data use to address ever-rising privacy concerns.

Indeed, Zuckerberg conceded that in the next year of political campaigns, “I expect that this is going to be a very tough year” for Facebook to navigate.

During the quarter, Facebook’s headcount rose in tandem with sales, up 28%, to 43,030 people. Capital spending hit $3.68 billion, up from $3.34 billion a year ago.

Photo: Robert Hof/SiliconANGLE