Facebook hammered as user growth cools

Facebook shares took a hit on Wednesday after the world's biggest social network reported weaker-than-expected user growth in the first full quarter since being rocked by a series of scandals on data privacy.

The company said profit was up 31% in the second quarter at $5.1bn as revenues rose 42% to $13.2bn.

But shares slumped 7% in after-hours exchanges after hitting record levels in official trading, with the quarterly report largely weaker than had been expected.

"Our community and business continue to grow quickly. We are committed to investing to keep people safe and secure, and to keep building meaningful new ways to help people connect," chief executive Mark Zuckerberg said.

Zuckerberg has said he did not expect a meaningful impact from the uproar over data hijacked by political consulting firm Cambridge Analytica, but the last quarter's figures suggested some cooling.

The key metric of monthly active users rose 11% to 2.23 billion, below most estimates of 2.25 billion, while daily active users grew a weaker-than-expected 11% to 1.47 billion.

Almost all of Facebook's revenue - $13bn of the total $13.2bn - came from online advertising, a sector dominated by the California social network along with Silicon Valley rival Google.

Although Facebook shares were in a slump after the Cambridge Analytica scandal broke earlier this year, the stock had risen sharply and hit record levels this month.

According to the research firm eMarketer, Facebook is expected to hold an 18% share of the $273.29bn worldwide digital ad market, behind Google's 31%.

According to the research firm, Facebook-owned Instagram is making up for some of the slowdown in growth at the social network and will generate $8.06bn in worldwide ad revenue this year.

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