Facebook falls short in the third quarter
Active users, business health rise but not to analysts’ forecasts
As Facebook Chief Executive Mark Zuckerberg discussed his company’s third-quarter performance Tuesday, he didn’t try to sugarcoat some of the issues that have recently impacted the social-networking giant.
“It’s been an important year,” Zuckerberg said. “(But) it’s been a tough year.”
Zuckerberg made his comments on a conference call about Facebook’s third-quarter earnings and sales results, which the company released after Tuesday’s close of trading. Zuckerberg said Facebook has “a long road ahead” to ensure it can prevent the kinds of attacks like the one in September that exposed the personal data of more than 50 million of its users.
“We’ve done a lot,” Zuckerberg said about Facebook’s efforts to build up its security systems. Still, Zuckerberg said it would likely be about a year before the company has the level of security it wants in place.
Facebook continued to deal with issues affecting its growth in users during the third quarter of the year as the social networking giant re-
ported results that mostly failed to meet Wall Street’s expectations.
Following the close of trading Tuesday, Facebook reported a profit of $1.76 a share, on revenue of $13.73 billion; in the same period a year ago, the company reported earnings of $1.59 a share, on $10.34 billion in sales. Facebook’s earnings topped analysts’ estimates
of $1.47 a share, but they fell shy of the consensus forecast of $13.78 billion in revenue.
Active users, a key metric used in judging Facebook’s popularity, and business health rose from a year ago, but still managed to not reach analysts’ forecasts. Facebook said it had 1.49 billion daily active users during the three months that ended Sept. 30, a 9 percent gain from the third quarter of 2017, but that number just missed expectations of 1.5 billion
daily active users in the quarter.
Monthly active users rose to 2.27 billion, up 10 percent from a year ago. But that number missed the estimates of analysts, who were looking for Facebook to report 2.29 billion such users.
The overall results also appeared to support Facebook’s statements in July when it gave its secondquarter report and said it expected revenue in the second-half of 2018 to be grow at a slower rate than the same period a year ago.
That forecast bothered investors so much that Facebook’s market capitalization fell by almost $120 billion the day after the company’s report.
However, Facebook’s exceeding of analysts’ earnings forecasts had more of an impact on investor sentiment than the company’s user numbers, as Facebook shares rose more than 5 percent in after-hours trad- ing.