Facebook beats Q3 earnings expectations but user growth remains tepid

Facebook beats Q3 earnings expectations but user growth remains tepid

"As long as they are meeting or exceeding on the bottom line (profit) they will be fine".

That kind of positive outlook may have helped to calm investors' nerves, and prevent a sell-off panic like the one that followed Facebook's Q2 results. Although, its earnings per share for the quarter was well above estimates - $1.76 compared to $1.47 expected.

Facebook shares closed Tuesday up 2.91 percent at $146.22.

A worrying trend for Facebook is slowing growth in active users, a shift largely driven by younger people deserting the app en masse.

They represented annual rates of growth of 10% and 9% respectively, Facebook said.

Now, the Facebook management can still point to global stats that show that it has 2.27 billion monthly active users and 1.49 billion daily users.

CEO Mark Zuckerberg announced on Tuesday that his team had already laid a vision for the future of Facebook. Payments will make each of these services more useful for people and businesses, even though we don't plan to profit from it directly...beyond the mission challenges of video displacing social interactions, there is also a business challenge, which is that video monetizes significantly less well per minute than people interacting in feeds.

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"It is also no surprise that private messaging and Stories are the current growth drivers for the business". Total revenue is also up 33-percent compared to the same period a year ago.

A few financial analysts are concerned that the company's operational problems are so vast that revenue growth and cost containment will not come as expected. In Europe, DAUs ticked down quarter-over-quarter from 279 million to 278 million.

The social network's reputation has suffered from a data breach affecting 29 million users in September and a privacy scandal involving a British political consulting firm in March.

It also has been rocked by domestic and worldwide information warfare on its services, including WhatsApp and Instagram, and a wave of executive departures. The bank noted that Wall Street is underestimating the "stickiness" of Facebook's over 2 billion users, and that the company is successfully adapting to and shaping user behavior. That's left company spending heavily on more experimental projects.

Zuckerberg said that Stories, which allows users to upload short photo or video collections and acts as a kind of second news feed, had shaken off slow early progress and was "now growing quickly".

"The 1 million quarter-on-quarter decline in Europe users was likely a continuation of the fallout of GDPR we saw last quarter". "We will never be ideal, but I'm proud of the work we're doing here", he said. Fourteen years after he started the social network, Facebook is the most successful start-up to have emerged from Silicon Valley since its arch rival Google in the late 1990s. Revenue growth was down from the 42 per cent jump that Facebook had reported in the previous quarter. It forecasts expenses will grow 40 percent to 50 percent in 2019.

Overall third-quarter revenue was $13.73 billion, up 33 percent from the same period past year and below the $13.78 billion average analyst estimate in Refinitiv data.

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