Published: Fri, November 03, 2017
Markets | By Terence Owen

Facebook Shares Higher As Third-Quarter Results Crush Estimates

Facebook Shares Higher As Third-Quarter Results Crush Estimates

Despite repeated warnings that revenue growth would decelerate meaningfully in the second half of the year as growth in ad load slowed, Facebook's third-quarter year-over-year ad revenue growth actually accelerated, rising from 47% in Q2 to 49% in Q3.

Facebook Inc. (NASDAQ: FB) reported its third quarter earnings and beat analysts' estimates, but shares fell at Thursday's open after the company provided its expense outlook for the 2018 fiscal year.

Daily active users were up 16% year over year to 1.37 billion and monthly active users were up 16% to 2.07 billion. Daily active users: 1.37 billion, up from 1.32 billion last quarter.

Chief executive Mark Zuckerberg used the update to address criticism of Facebook for allowing disinformation and manipulation during the 2016 USA presidential election, hours after the company's top lawyer faced a grilling at a Washington congressional hearing.

"Our community continues to grow and our business is doing well", said CEO Mark Zuckerberg in a statement stating the obvious.

"I've directed our teams to invest so much in security, on top of the other investments that we're making, that it will significantly impact our profitability going forward", Zuckerberg told investors during the call.

Protecting the Facebook community is more important than "maximizing our profits", Zuckerberg said on the call. EPS (GAAP): $1.59 vs. $1.28 expected, up 77% from the year-ago period.

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The company reported an EPS of $1.59, up 77 percent year over year, and beating analysts' estimates of $1.28.

The world's number one social network along with Twitter and Google is under pressure from USA politicians over its role in the last presidential election.

Earlier this year there had been concerns that Facebook was reaching its limit on how many adverts it could fit into News Feeds without irritating users, but the group has recently been looking into putting adverts into its Messenger application and photo-sharing app Instagram.

Investors, however, it seems did not like the profitability outlook as the stock was down in after-hours trading despite the fantastic earnings report. Further breakup of the advertising revenue suggests that mobile advertising contributed around 88%. And they used them to try to undermine our values.

The one challenge the popular social media website faces is how it will be able prevent fake news, and how that could impact the company's operations.

"I'm dead serious about this", Zuckerberg said.

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