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US-IT-LIFESTYLE-EARNINGS-FACEBOOK
Facebook results beat forecasts but shares take a hit
SAN FRANCISCO, Jan 30, 2020 (BSS/AFP) – Facebook on Wednesday reported
quarterly earnings and user growth stronger than most forecasts, but shares
took a hit in after-market trade.
The leading online social network said net income rose seven percent from
a year ago to $7.3 billion, while revenue increased 25 percent to $21 billion
in the final three months of last year.
The number of people using Facebook monthly climbed eight percent to 2.5
billion; for all its apps including Instagram, Messenger and WhatsApp, the
figure was 2.89 billion.
Shares, however, quickly dropped more than seven percent for reasons that
were not immediately clear.
“We had a good quarter and a strong end to the year as our community and
business continue to grow,” said Facebook chief executive Mark Zuckerberg.
Investors may be concerned by continuing increases in the amount of money
Facebook spends as it pours resources into protecting privacy and preventing
the platform from being used as a platform for hate speech, abuse, and
disinformation.
Costs in the recently ended fourth quarter rose 34 percent to $12.2
billion. Facebook ended the year with its employee ranks up 26 percent to
nearly 45,000.
Shares may have also been weighed down by worries about privacy
regulations hobbling the company’s ability to effectively target its money-
making ads.
Facebook chief financial officer Dave Wehner told analysts the company
expects revenue growth to slow, in part due to regulations and “other ad-
targeting related headwinds.”
Recent data privacy regulations in Europe and California as well as
enhancements to browser or operating system software from Google and Apple,
along with tools added by Facebook itself, are expected to limit the ability
of the social network to use “signals” from third-party websites to more
finely target ads, Wehner said.
– Delivering gains –
Facebook posted gains in advertising, which represents the vast majority
of its revenues, up 25 percent at $20.7 billion in the quarter, and expanded
its user base.
“Despite all of the concerns that have been swirling around the company in
the past two years, it beat expectations on revenue, and it demonstrated
continued growth in its user base,” said eMarketer principal analyst Debra
Aho Williamson.
“This is a company that has shown that it can withstand ongoing criticism
of its practices and yet still pull out gains in both revenue and users.”
The market tracking firm expects Facebook’s momentum to continue, with
advertisers increasing spending at the social network and its Instagram
service.
Facebook has faced a barrage of criticism recently for the misuse of
users’ data to influence elections amid increasing calls for the California-
based internet titan to be regulated.
Facebook this week began rolling out a new tool allowing users of the
social network to view and delete data it collects from third parties.
The feature is part of an effort by Facebook to shore up its image in the
wake of a series of privacy scandals, including the hijacking of personal
data on millions of users by a British consultancy developing voter profiles
for Donald Trump’s 2016 campaign.
Zuckerberg felt that Facebook is ready to defend against efforts to
maliciously use its services to sway the coming US presidential election or
widen rifts between voters.
“We’re very focused on election integrity, and this is an area where I’m
proud of the progress that we’ve made in preventing foreign interference,”
Zuckerberg said.
“We were behind in 2016, but after working to protect elections and
countries across the world for the past few years, we think our systems are
now more advanced.”
BSS/AFP/FI/ 0900 hrs