Facebook shares fall after it slightly misses user, revenue estimates

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Just weeks ago, Facebook activated a "war room" as a nerve center to halt misinformation and manipulation of the social network by foreign actors trying to influence elections. Marketers aren't totally comfortable with the new formats yet, and 2019 will be another year of significant investment, he added on a conference call with analysts Tuesday.

Zuckerberg said that Stories, which allows users to upload short photo or video collections and acts as a kind of second news feed, had shaken off slow early progress and was "now growing quickly".

Facebook's headcount was 33,606, up 45pc on a year ago, largely driven by the need to increase resources around the checks and balances needed to police the social network for so-called fake news, harmful content and possible breaches. That pushed Facebook's share back to 3 percent up in after-hours trading.

Mobile advertising revenue in Q3 represented approximately 92 percent of advertising revenue for the third quarter of 2018, up from approximately 88 percent of advertising revenue in the third quarter of 2017. That set a low bar for Tuesday's results.

However, according to news agencies, this is the minimum growth shown by the company for nearly six years.

Facebook's spending has ballooned from licensing more engaging content such as video, and as it tries to fortify itself against fraudsters and hackers.

Activist shareholder Jonas Kron, who is pushing hard for Facebook to appoint an independent chairman, welcomed Zuckerberg's commitment to invest in security. Zuckerberg noted that "video monetizes significantly less well per minute than people interacting in feeds". Users tap through them and see ads in between.

Mark Zuckerberg says that, when it comes to messaging apps, Apple is Facebook's "biggest competitor by far". Suitable ads are hard to make, he added.

As of this writing, Facebook shares are rising almost 4% to $151.50.

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Tuesday's results bought Zuckerberg some time to pursue the new initiatives.

Facebook's stock zigzagged after reporting third-quarter earnings that beat profit forecasts 30 cents a share but missed on revenue, as investors grappled with the company's efforts to maintain its growth while improving the social network's security.

Quarterly profit of US$5.14 billion, or US$1.76 per share, was up 9 per cent from the same period previous year and above the average per-share estimate of US$1.48.

"We expect Facebook's revenue growth to remain robust, supported by multiple growth drivers", Wedbush analysts wrote in a research note on Friday, ahead of Facebook's Q3 earnings.

Emerging businesses Instagram and WhatsApp also have yet to pick up the slack from flattening usage of Facebook.

"The 1 million quarter-on-quarter decline in Europe users was likely a continuation of the fallout of GDPR we saw last quarter".

As Facebook user growth has tapered off, its ad sales had continued to surge as it found ways to better target ads to draw clicks and views. And they've embraced Instagram, which recently passed 1 billion users.

Facebook's CEO Mark Zuckerberg answers questions about the improper use of millions of users' data by a political consultancy, at the European Parliament in Brussels, Belgium.

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