Meta beats expectations but legal penalties hit profit

Meta beat investor expectations for third-quarter revenue on Wednesday as it doubles down on a global AI race but the social media giant's profits took a hit due to an US$18 billion legal settlement with nearly all US states. The company reported US$9.86 billion in profits from July to September, almost 50 percent below investor expectations, which Meta said was dragged down by a US$9.9 billion charge related to the settlement. Meta reported its earnings just hours after another financial penalty was announced related to a case in New Mexico. A judge ruled that Meta must pay US$25 billion to New Mexico after a jury found last month that the social media giant had deceived users in a case related to the Cambridge Analytica scandal. "We continue to monitor active legal and regulatory matters that could significantly impact our business and financial results," CFO Susan Li said on Wednesday afternoon during a call with analysts. Meta still faces "a number of youth-related trials scheduled in the coming months in the United States," Li continued. Meta shares jumped as high as 7 percent. The company has been spending aggressively to build out its artificial intelligence (AI) capabilities, and investors are looking for signs that the investments are paying...