Facebook posts record profit
Facebook posted a record quarterly profit despite a slew of negative headlines during the period.
CEO Mark Zuckerberg says the social-media giant has turned a corner and plans to focus this year on building new products.
Investors cheered the results as well as the shift in tone from Mr. Zuckerberg. Facebook’s stock rose nearly 12% to about $168 in after-hours trading.
Before Wednesday, facebook shares had fallen 34 percent since the company’s July earnings call, when Facebook warned of slowing revenue growth and rising expenses due to increased investment in security measures, according to the wall Street Journal.
Facebook reported per-share earnings of $2.38 in the fourth quarter, typically the heaviest spending period for advertisers, up from $1.44 a year earlier. Facebook’s net income rose to $6.88 billion from $4.27 billion.
Revenue rose 30 percent to $16.91 billion, exceeding expectations of $16.40 billion. The percentage increase marked Facebook’s slowest revenue growth yet. Still, the growth is significant for a company seven years after its IPO.
The fourth quarter caps one of the most trying years in Facebook’s 15-year history.
"Our community and business continue to grow," said Mark Zuckerberg, Facebook founder and CEO. "We've fundamentally changed how we run our company to focus on the biggest social issues, and we're investing more to build new and inspiring ways for people to connect."
The continuing risks for Facebook were made clear earlier on Wednesday, when Facebook faced fresh anger from users, lawmakers and other tech giants following revelations about how the company targeted teens and young adults in a study to learn more about their habits.
Facebook paid these participants $20 a month to download an app that collected sprawling personal data. News of Facebook’s efforts to collect the information was first reported by TechCrunch.
Daily usage of Facebook’s family of apps has slowed in Facebook’s most lucrative markets: the U.S. and Canada added about one million users, while Europe added about four million. These trends matter for Facebook because about 70 percent of its advertising revenue comes from these regions.
In the U.S. and Canada, average revenue per user increased by $8.10, and in Europe it increased by $2.12.
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More than 1.5 billion people use Facebook every day, and 2.3 billion use it monthly. Those figures were higher than expectations.
Overall, more than 2.7 billion people use the company’s family of services—including Facebook, Instagram, WhatsApp and Messenger—each month.