• by Gavin O'Malley  @mp_gavin, April 24, 2019

Overshadowing an otherwise strong first quarter, Facebook said on Wednesday it expects to be fined billions of dollars by the Federal Trade Commission.

The FTC has been investigating Facebook since the Cambridge Analytica scandal erupted last year. Of particular interest to the FTC is whether the company violated a 2011 agreement it made regarding the sharing of user data.

In response to the inquiry, Facebook has taken a $3 billion charge; it is estimating that the fine could approach $5 billion.

“The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome,” Facebook noted in its first-quarter earnings release.

On the bright side, Facebook’s quarterly earnings and user growth both beat analyst expectations. During the first quarter, the social giant boasted just over $15 billion in revenue, which was up about 25% year-over-year.

Analysts were not surprised by Facebook’s strong performance.

“Advertisers continue to be stuck on Facebook, despite its many challenges,” according to eMarketer principal analyst Debra Aho Williamson. “What they care most about is its vast user base and its targeting capabilities. Both are continuing to provide strong performance for them.”

“While marketers may say privately they do worry about Facebook’s problems with fake news, election meddling, privacy and more, they worry about their own financial health. Facebook is still a major partner in that regard,” Williamson added.

Yet, Williamson said that there is no downplaying the looming FTC fine.

“This is a significant development, and any settlement with the FTC may impact the ways advertisers can use the platform in the future,” she said.

During an average day during the quarter, daily active users (DAUs) reached 1.56 billion, which were up 8% year-over-year. On average, monthly active users (MAUs) reached 2.38 billion as of March 31, 2019, were also up 8% year-over-year.

Mobile advertising revenue now represents about 93% of all ad revenue, which was up from 91% during the same period last year.

All together, Facebook now estimates more than 2.1 billion consumers  use Instagram, WhatsApp, Messenger, or its flagship app on a daily basis, and around 2.7 billion people use at least one of its family of services each month.

Facebook recorded earnings per share of $0.85 compared to estimates of $1.63 EPS. However, that’s because Facebook has set aside $3 billion to cover a potential FTC fine that it’s still resolving. Without that fine, it would have had an EPS of $1.89.