steven36 Posted October 30, 2018 Share Posted October 30, 2018 Facebook fell flat. The company failed to meet expectations for daily active users for the second consecutive quarter, legitimizing investor concerns of a weakened core user base for the social media giant. Facebook reported 1.49 billion daily active users globally in the third quarter, missing expectations of 1.5 billion. The company had seen 1.47 billion daily active users in June for the second quarter, also missing expectations for the period. The Menlo Park, California-based company delivered earnings of $1.76 per share on revenue of $13.73 billion. This beat consensus estimates of earnings of $1.47 per share but missed the $13.8 billion in revenue foreseen by average analyst expectations. Facebook’s third-quarter results extend a rout for the company after its less-than-stellar second-quarter report in July. The company missed on revenue for the first time since 2015 in the second quarter and reported a shrinking user base in North America and Europe, sending shares tumbling and erasing $120 billion in market capitalization. Company executives also said at the time that they expected revenue growth rates to be lower than the year prior for the second half of this year. Between data breach scandals and the specter of regulatory crackdowns, Facebook endured a turbulent third quarter. At the end of September, Facebook announced that it had discovered a breach of 50 million users’ accounts, leading European Union privacy watchdogs to mull a $1.63 billion fine on the company. Facebook’s third-quarter results come just before next week’s US midterm elections. Facebook has recently boosted its election integrity efforts in the wake of the Cambridge Analytica revelation earlier this year, setting up a “war room” in an effort to combat bad actors and prevent a repeat of the run-up to the 2016 presidential election. Shares of Facebook wavered in extended trading. The stock is down 17% for the year-to-date as of market close Tuesday. Source Link to comment Share on other sites More sharing options...
steven36 Posted October 30, 2018 Author Share Posted October 30, 2018 After last quarter’s bloodbath earnings report that cut 20 percent from Facebook’s share price, the social network stumbled in Q3 2018, reaching 2.27 billion monthly users, up 37 million users or 1.79 percent — only slightly better than Q1’s slowest-ever growth rate of just 1.54 percent, and compared to an 2.29 billion Wall Street estimate. It added 24 million daily active users hit 1.49 billion, up 1.36 percent compared to Q1’s 1.44 percent, missing the 1.51 billion estimate. But the real growth story depends on its core US/Canada and Europe markets where Facebook saw zero growth and lost 1 million users respectively last quarter. In Q3, Facebook added 1 million monthly users to reach 242 million in the US/Canada region, but held flat at 185 million dailies there. It lost 1 million users in Europe in both dailies and monthlies. Those markets make up over 70 percent of its revenue, which is scaring Wall Street. As for Facebook’s business, the company earned $13.73 in revenue, compared to Refinitiv’s consensus estimate of $13.78 billion, and saw $1.76 EPS compared to an estimate of $1.47, making for a mixed report. Facebook blamed foreign exchange headwings for $159 million in Q3, which was the difference between its miss and a beat on revenue. Facebook’s share price closed at $146.22 before earnings were released, still massively down from its $217 peak for before it announced user growth troubles and slowing revenue growth in Q2’s earnings report. Facebook shares climbed 2 percent upon the announcement of earnings, in part thanks to Facebook pulling in $5.14 billion in profit Facebook hoped to show that its business can keep growing even as it spent massively to double its security and content moderation team from 10,000 to 20,000 this year. It did note that “more than 2.6 billion people now use Facebook, WhatsApp, Instagram, or Messenger each month, and more than 2 billionpeople use at least one of our Family of services every day on average.” But the company’s revenues and profits have been overshadowed by the non-stop parade of scandals ranging from election interference to its biggest security breach ever. Next quarter we’ll see if the breach scared users away or if Facebook logging them out for safety led some to never log back in. Source Link to comment Share on other sites More sharing options...
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