Facebook Misses on Revenue Estimates, Posts Massive Q3 Earnings
Social network misses Wall Street user estimates as growth remains flat in North America
Sean Burch | October 30, 2018 @ 1:22 PM
Last Updated: October 30, 2018 @ 2:12 PM
Facebook, despite missing on Wall Street revenue estimates for the second straight quarter and reporting flat user growth in the U.S., saw its share price inch higher on Tuesday afternoon, after reporting better-than-anticipated Q3 earnings.
Facebook reported earnings of $1.76 per share and revenue of $13.73 billion, easily surpassing analyst earnings estimates of $1.47 per share but narrowly missing on sales estimates of $13.78 billion. Revenue increased 33 percent year-over-year. Facebook increased its profits 9 percent year-over-year, reporting $5.14 billion in net income.
The company also reported underwhelming user growth. Monthly active users moved higher, with Facebook adding 40 million MAUs to hit 2.27 billion overall. Daily active users crept upwards as well, hitting 1.49 billion DAUs, compared with 1.47 billion last quarter. Analysts had estimated 1.51 billion DAUs and 2.29 billion MAUs. And most of Facebook’s growth is coming outside the U.S. and Europe — the company’s two most lucrative markets. Facebook remained flat at 185 daily users in North America, and lost 1 million daily active users in Europe.
Shareholders didn’t appear to mind the lukewarm user growth — especially compared to smaller competitors like Snap and Twitter recently reporting a drop in users — with Facebook shares increasing about 2 percent in after-hours trading to $149 per share.
“Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day,” CEO Mark Zuckerberg said in a statement. “We’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well.”
The company declined to share specifics on Instagram’s user and sales growth, something Wall Street and investors have kept their eyes on as Facebook itself reaches a saturation point for user growth. The company did boast “more than 2.6 billion people now use Facebook, WhatsApp, Instagram, or Messenger each month” in its earnings statement. Facebook executives had warned last quarter the company could be entering a stage in its history where it doesn’t routinely post breakneck revenue and user growth.
It’s been a turbulent three months since Facebook last reported earnings. The company reported in July the dreaded combo of uninspiring user growth and a miss on Wall Street’s revenue expectations. (Facebook, even missing analyst estimates, posted its best quarterly revenue in its history.) The company’s stock, which had recovered from its Cambridge Analytica swoon earlier in the year, has since dropped about 20 percent, trading below $147 per share as markets closed on Tuesday. Facebook shares are down more than 15 percent since the start of 2018.
Following the Cambridge Analytica scandal, the company made a concerted media push to quell fears it was unable to securely protect user data. Those efforts were punctured earlier this month, when Facebook announced a breach of its security system. The breach left 30 million users vulnerable to having profile information lifted — including their contact information, location and recent search history.
The social network’s defense against fake news has also been tested in recent months. Facebook announced in August it had removed hundreds of accounts tied to Iran and Russia for spreading political misinformation. Another 82 Iranian-tied accounts — spreading fake news on a myriad of topics, from immigration to President Trump to Colin Kaepernick — were deleted last week, the company announced.
The company will hold a conference call at 5 p.m ET to discuss its earnings.
7 Stars Who Have Joined #DeleteFacebook Movement, From Will Ferrell to Susan Sarandon (Photos)
For over a month, Facebook has been dealing with the PR nightmare sparked by its admission that the data of up to 87 million users was secretly accessed by consulting firm Cambridge Analytica, and later used to help Trump's 2016 presidential campaign.
The slip up sparked the #DeleteFacebook hashtag, in which people on Twitter and other spaces announce they're doing precisely that. Facebook has tried to course-correct with new security measures, and CEO Mark Zuckerberg agreeing to testify before Congress. But that wasn't enough to keep some A-listers from joining #DeleteFacebook.
Here's a look at the celebs that have dropped their profiles (so far).
Getty Images
Elon Musk didn't seem to hesitate when a Twitter follower dared him to delete the Facebook profile for SpaceX, his rocket company.
Not only did Musk axe the SpaceX page (claiming he wasn't aware one even existed,) he also deleted the Tesla page as well, saying it "looks lame anyway."
The two accounts combined had about 5 million followers.
Getty Images
Cher tweeted that it was "VERY HARD" to delete her account, because of the "amazing young Ppl there." But delete it she did. If only Facebook could turn back time (I'll show myself out).
The Goddess of Pop must've been talking about her personal page only, however, because her commercial page is still live. Guess it's hard to delete those 2.4 million followers.
Getty Images
The OG of #DeleteFacebook, Jim Carrey was off the social network even before the Cambridge Analytica news made it cool. Carrey dumped his Facebook stock and ditched his profile back in February, because the company "profited from Russian interference in our elections and they’re still not doing enough to stop it."
Getty Images
Alright, Woz didn't technically delete his profile. The Apple co-founder said he was too worried about losing ownership of the "stevewoz” handle. But he deactivated the account, saying Facebook has a one-way relationship with its users. “The profits are all based on the user’s info, but the users get none of the profits back," Woz told USA Today.
Getty Images
Deleting Facebook is so hot right now, at least according to Will Ferrell. The "Anchorman" star erased his profile at the end of March, saying on his page "Cambridge Analytica's misuse of millions of Facebook users' information in order to undermine our democracy and infringe on our citizens' 'privacy'" was the reason for his exodus.
Getty Images
Singer Roseanne Cash, daughter of country great Johnny Cash, announced on March 29 that she would delete her Facebook account the next day. That remains to be seen, however: the page is still live as of April 9.
Getty Images
On April 12, Susan Sarandon announced she was quitting Facebook via Instagram (which is also owned by Facebook), posting a quote by Charles Bukowski that begins, "Censorship is the tool of those who have the need to hide actualities from themselves and from others."
Getty Images
1 of 8
Several Hollywood and Silicon Valley heavy hitters recently ditched the social network
For over a month, Facebook has been dealing with the PR nightmare sparked by its admission that the data of up to 87 million users was secretly accessed by consulting firm Cambridge Analytica, and later used to help Trump's 2016 presidential campaign.
The slip up sparked the #DeleteFacebook hashtag, in which people on Twitter and other spaces announce they're doing precisely that. Facebook has tried to course-correct with new security measures, and CEO Mark Zuckerberg agreeing to testify before Congress. But that wasn't enough to keep some A-listers from joining #DeleteFacebook.
Here's a look at the celebs that have dropped their profiles (so far).
Getty Images
Getty Images
