Facebook earnings: 5 things to watch in first post-Cambridge Analytica report

This afternoon, Facebook will release its first-quarter earnings. Here are five things we’ll be watching for from the social-networking giant:

• This is Facebook’s first earnings report since the Cambridge Analytica scandal broke last month. It will be interesting to see how the controversy–which involves the misuse of over 87 million users’ data–affects the company’s bottom line, its user numbers, and its engagement.
• Analysts predict the company will report revenues of $11.41 billion, up 42% from a year ago, and earnings per share of $1.35, up from $1.04 a year earlier.
• Facebook’s stock was at $185.09 when the Cambridge Analytica scandal broke. Today, it’s at $159.53, and investors appear to be skittish in advance of the earnings report, with shares almost exactly unchanged today as of this writing.
• One thing that hangs over Facebook is how much, if at all, it will be fined if it’s found by federal regulators that it violated its 2011 consent decree that requires the company get users’ consent before sharing any data beyond what they’ve set in their privacy settings. Although Wall Street doesn’t appear to be freaking out about this, it is theoretically possible that Facebook could face trillions of dollars in fines.
• Beyond potential concerns about massive fines, there are also worries about the more likely scenario that Facebook will find itself regulated in the aftermath of numerous security and privacy controversies. Wall Street likely has priced potential legislation (and limits it would place on how ads can be used online) into Facebook’s stock price.

Next week is Facebook’s annual F8 developers conference. That should be one of the most-watched events in the company’s history as it faces developers for the first time post-Cambridge Analytica.