not vested
Facebook earnings rise by 9pc to US$5b, claims 2.2b monthly users Facebook did not hit it out of the ballpark with its latest quarterly report, but the bar isn’t so high these days for the image-battered social networking giant.
The company reported a slight revenue miss but stronger than expected profit for the July-September period.
Coming three months after its stock suffered its worst one-day drop in history, wiping out US$119 billion of its market value, the mixed results were perhaps not the redemption Facebook hoped for.
Shares were volatile in after-hours trading — dropping the most, briefly, when executives discussed a decline in expected revenue growth and increasing expenses during the conference call. Still, the stock generally vacillated in the low single-digit percentages, suggesting, at least, that the social media giant didn’t spook investors too badly.
With the myriad problems Facebook is facing, that passes for good news these days.
"Overall, given all the challenges Facebook has faced this year, this is a decent earnings report,” said eMarketer analyst Debra Aho Williamson.
Facebook had 2.27 billion monthly users at the end of the quarter, below the 2.29 billion analysts were expecting. Facebook says it changed the way it calculates users, which reduced the total slightly. The company’s user base was still up 10 percent from 2.07 billion monthly users a year ago.
The company earned US$5.14 billion, or US$1.76 per share, up 9 percent from US$4.71 billion, or US$1.59 per share, a year earlier.
Revenue was US$13.73 billion, an increase of 33 percent, for the July-September period.
Analysts had expected earnings of US$1.46 per share on revenue of US$13.77 billion, according to FactSet.
Chief Executive Mark Zuckerberg called 2019 "another year of significant investment” during the earnings call. After that, he said "I know that we need to make sure our costs and revenue are better matched over time.”
The company had already warned last quarter that its revenue growth will slow down significantly for at least the rest of this year and that expenses will continue to balloon as it spends on security, hiring more content moderators around the world and on developing its products, be they messaging apps, video or virtual reality headsets.
The following day the stock plunged by 19 percent. Shares not only have not recovered, they have since fallen further amid a broader decline in tech stocks.
Facebook’s stock climbed US$4.07, or 2.8 percent, to US$150.29 in after-hours trading. The stock had closed at US$146.22, down 17 percent year-to-date.
Source: AP
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It's all about "how much you made when you were right" & "how little you lost when you were wrong"