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Home / Business / Facebook stock fluctuates after profit, but profits according to forecast are not so scary

Facebook stock fluctuates after profit, but profits according to forecast are not so scary



Facebook Inc. surpassed Wall Street expectations on Tuesday despite numerous public relations crises in recent months and a forecast that had led to a record-breaking three months ago.

Facebook

FB, + 2.91%

stock fluctuated after third-quarter earnings had been released on Tuesday afternoon, but after the executive conference call, gains of about 3% were achieved. When the numbers reached breakthrough, Facebook shares fell almost 4% after trading, but recovered a few minutes later and barely started the call in the red. Afterwards, they proceeded in prepared comments to the south, before they recovered after conquering the profits again leadership surprise.

In the last quarter, the Facebook share plummeted into the red, as CFO David Wehner presented a weak forecast. On Tuesday, however, Wehner seemed to be helping to bring the stock back from its deepest afternoon ravine. Investors had started to lower the price when Mark Zuckerberg, chief executive, appealed and when Wehner made his prepared comments, the stock was already slipping and continuing its worst point in after-hours trading, about 5% , fall.

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After Wehner finished without devastating news and Facebook turned to analyst questions, stocks rallied and continued until the call was short after that ended at 1

8 o'clock Eastern.

The CFO said Facebook expects slower revenue growth to be in the mid- to high-single-digit percentage range compared to the third quarter, slightly better than the forecast that Wehner made in the high single-digit percentage range three months ago. Wehner said growth is driven by services that give Facebook less money, privacy has an impact on "price growth," and the company focuses on stories that "crowd out some advertising impressions." These factors will continue to grow slowly in 2019.

Based in Menlo Park, California, the company generated $ 5.14 billion in net revenues for the quarter, representing $ 1.76 , compared to $ 1.59 a year ago. Analysts' earnings estimates for the third quarter called for $ 1.46 per share, according to FactSet.

Overall, Facebook's revenue was $ 13.73 billion, compared to $ 10.14 billion a year ago, but expectations for revenue of $ 13.77 were slightly missed billion, according to FactSet. Facebook's main source of revenue is $ 13.54 billion, compared to $ 10.14 billion in the same period last year. Facebook's payments and other fees category, which includes Oculus' virtual reality hardware, raised $ 188 million from $ 186 million last year.

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Facebook reported 2.27 billion active users per month and a daily user base of 1.49 billion, an increase of 10 % or 9%. In the US and Canada, the company's most profitable markets, the number of members remained at 185 million. The number of daily users remained constant or declined for the fifth consecutive quarter; Monthly users were up 242 million from 241 million in the first and second quarters of this year.

Despite flat or declining membership growth in the US and Canada, Facebook was able to make more money with each user in these countries, with sales of $ 27.11 per user, compared to $ 21.20 in the US same period last year.

"Although sales were slightly below Wall Street expectations, this was not a significant shortfall," wrote eMarketer Principal Analyst Debra Aho Williamson. "Importantly, Facebook has achieved a gratifying sales increase in key markets in the US and Canada. Facebook also achieved a low usage gain in the US and Canada. This is a good sign after the flatness we saw in the last quarter. "

" Given all the challenges facing Facebook this year, this is a decent earnings report, "Williamson concluded.

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These challenges re-emerged in Facebook's spending as total costs and costs increased 53% to $ 7.95 billion in the third quarter while profits increased 9% has continued to expand its workforce and increased its workforce by 45% to 33,606 in the third quarter of 2003. Co-founder Zuckerberg said the company had planned to employ 20,000 people to handle security on its platforms in the past.

Zuckerberg did not address the issues Facebook faced in the past year, as he did in the previous one n conference had been calling since the Cambridge Analytical privacy scandal. Zuckerberg did not apologize once during the call.

Prior to Facebook's earnings, several analysts released notes indicating that advertisers were taking note of the wave of public relations crises that plagued the company. Especially brand advertisers were less willing to increase their budgets than in the past. For most major brands and businesses, media buyers have considered Facebook as a requirement when creating a digital advertising campaign, while smaller competitors like Twitter Inc.

TWTR, + 4.54%

and Snap Inc.

SNAP, + 7.35%

are considered more useful for product launches or certain short-term goals.

Related: Snap Inventory Declines After User Base Shrinks Again, But New Ad Formats Gain Importance

In a telephone interview late Tuesday, the PMX Agency Vice President for Social Networks and Ad, said that customers had conversations on Facebook problems – "It was also a key part of the discussions with Facebook" – PMX, however, has seen no impact on the budget.

"I like a platform with 1.5 billion people," said Math. "We're focused on increasing customer performance, and Facebook will be a key driver of this success."

Math says that due to some changes Facebook has made to its platform, its organization is under pain in terms of the insights that can be gained from conducting advertising campaigns on the social network. "But that will be resolved in the long run," said Math.

Before Tuesday's after-hours trading, Facebook's share price had fallen 17.1% this year as the S & P 500 Index rose 0.3% % increased. The company's stock fell about 20% after second-quarter earnings missed sales expectations and user growth slowed.


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