Facebook profit skyrockets as user base nears 2 billion

Facebook on Wednesday reported that its quarterly profit surged as its ranks of monthly users closed in on two billion, but warned of rising expenses and slowing revenue growth.

The leading social network said it made a profit of $3.06 billion on $8.03 billion in revenue in the first three months of this year, posting increases of 76 percent and 49 percent, respectively, compared to the same period last year.

Meanwhile, the number of people using Facebook monthly increased 17 percent to 1.94 billion, according to the earnings report.

"We had a good start to 2017,” Facebook co-founder and chief Mark Zuckerberg said in the release.

"We’re continuing to build tools to support a strong global community."

Facebook bested high expectations for revenue but fell short on profit. Shares fell 2.4 percent to $148.17 in after-market trades that followed release of the earnings figures.

The California-based company’s shares had ended the trading day down less than a percent ahead of the earnings release and as it put out word of plans to hire an extra 3,000 staff to remove violent content such as the gruesome killings and suicides broadcast on its video platform.

"They are working their butts off to fix it, but it is not an easy problem,” Analyst Rob Enderle of Enderle Group said.

"They really need to get that artificial intelligence up and running, they couldn’t hire enough people to do real-time video review of everything."

Facebook efforts to better filter content come amid growing criticism over use of the platform for promoting violence and hateful activity.

Increased hiring also promises to push up operating costs and eat into profit at the social media giant.

Enderle said he believes Facebook was intentionally downplaying expectations to avoid its shares taking big hits due to surprise disappointments later in the year.

"It’s likely Facebook is being very conservative," he said.

“They don’t want to tank next quarter.”