SAN FRANCISCO — Facebook cautioned Wall Street on Wednesday that it could face intensifying difficulties in its advertising business from the coronavirus pandemic, but also indicated that the toll would not be deep.
The company, which reported rising revenue and profit for the first three months of the year, said that it experienced a significant reduction in advertising in the last three weeks of March and that its business would continue to be affected by “issues beyond our control.” It added that it would not give forecasts about future financial results because of the coronavirus impact.
But the ad declines flattened in April, Facebook said, adding that it had “seen signs of stability” and that “advertising revenue has been approximately flat compared to the same period a year ago.”
Mark Zuckerberg, Facebook’s founder and chief executive, has said use of the company’s video and voice calling services doubled or more over the past six weeks. Engineers are working around the clock just to “keep the lights on,” he has said.
More than three billion people now use one of the company’s apps every month, Facebook said, up from 2.7 billion people a year earlier. Engagement has surged, though the social network said it expected some of the increase to subside as shelter-in-place orders are lifted.
“Like Google, Facebook has an opportunity to emerge from the coronavirus crisis as a stronger player,” said Martin Garner, an internet analyst at CCS Insight, a marketing intelligence firm. “One key impact of the virus will be to accelerate companies’ use of digital services in everything from advertising to collaboration.”
For the first quarter, Facebook said its revenue rose 18 percent to $ 17.74 billion from a year earlier, while profit more than doubled to $ 4.9 billion, far surpassing Wall Street estimates. A year ago, Facebook’s profits were hurt when it took a $ 3 billion charge to pay a privacy settlement with the Federal Trade Commission.
Facebook recently warned that the increased usage of its services in the coronavirus outbreak might not lead to increased revenue since the company does not make money off many of its video and voice calling services.
“This is not going to be business as usual, and the marketing industry is certainly going to see a real impact,” Sheryl Sandberg, Facebook’s chief operating officer, said in a television interview last month. “I don’t think anyone knows how big. So we’re going to watch and look.”
But the downturn has also given Facebook an opportunity to trim expenses and to deploy its resources into new products. Last week, the company introduced a new video chat product, called Rooms, that will be rolled out across Instagram, Messenger, WhatsApp and the main Facebook app.
Facebook said its own spending was also down, largely related to slowing travel and event planning costs, which have come to a virtual standstill because of the coronavirus. The virus has also slowed hiring. All of that would keep its expenses down, Facebook said. It estimated it would save $ 2 billion to $ 4 billion in expenditures this year.
“I’ve always believed that in times of economic downturn, it’s important to keep investing,” Mr. Zuckerberg said in a conference call on Wednesday.