Sales up, but Facebook warns of `uncertainty'

Facebook Inc.'s fourth-quarter sales jumped 33 per cent, with online shopping during the pandemic fuelling demand for digital ads on its social networks. Still, the company warned of “significant uncertainty” in 2021, and said it may not be able to grow as quickly in the second half.

Quarterly revenue was US$28.1 billion, the Menlo Park, Calif.-based company said Wednesday in a statement. That compared with the US$26.4 billion average analyst estimate in a Bloomberg survey. Facebook now has 2.8 billion monthly users, beating the average prediction of 2.76 billion, as more people spend time on their phones while unable to gather or travel during COVID-19-related shutdowns.

As the pandemic continues to make in-person contact risky, people are relying on Facebook to remain connected with friends and family. Small businesses that haven't previously used the internet to reach customers have increasingly turned to Facebook, Instagram and WhatsApp — now with a combined audience of 3.3 billion — to get their messages out.

Facebook said those same trends would make it more difficult to grow as fast when the pandemic effects wear off. The company is also confronting a rising tide of regulatory scrutiny and criticism.

“Facebook stock is not without significant controversy,” Justin Post, an analyst at Bank of America Merrill Lynch, said in a note to investors. The company may face investor questions about any number of public perception problems — like the fact that users on Facebook organized the Jan. 6 Capitol riots, leading the company to suspend former president Donald Trump indefinitely to prevent further violence, Post said.

The stock was little changed in extended trading, after falling 3.5 per cent in New York to close at US$272.14. Shares have gained more than 26 per cent in the past year.