Facebook reported fourth-quarter results that exceeded estimates by Wall Street analysts for revenue, profit and active user levels.
The news boosted the company’s stock. After a regular session during which it rose more than 4% to $150.42, it added another 6% in after-hours trading.
Revenue for the quarter ending in December reached $16.91 billion, up 30% from the year-ago period and better than Wall Street’s expectation of $16.39 billion. Earnings of $2.38 a share rose a dramatic 65% from the same quarter in 2017 and far exceeded the consensus estimate of $2.18.
Monthly active users of 2.32 billion matched estimates, while daily active users of 1.52 billion slightly exceeded estimates. Both metrics were up 9% over the year-ago period. Instagram Stories has passed 500 daily users.
Despite the stellar financials, it has been a grueling period for the social media giant. The company has been embroiled in a series of scandals revolving around its use of data and its role in spreading false information and fomenting a range of other misdeeds. Bombshell reports by the New York Times, the UK’s The Guardian and PBS Frontline have had Facebook back on its heels, with execs testifying before Congress and attempting a media charm offensive to own up to mistakes.
Ahead of earnings, and with scrutiny growing among European regulators, the company this week took steps toward establishing a board with up to 40 members that will have oversight of content across Facebook. The goal of the board is to reduce instances of bullying and hateful expression that violates community standards. Like Twitter and other platforms, Facebook has tended to take a laissez-faire view of content on its platform, but an increasing number of cases of hate crimes, election interference and even genocide facilitated by Facebook has forced the company’s hand.
“Our community and business continue to grow,” said Mark Zuckerberg, Facebook founder and CEO, in the company’s earnings release. “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.”
During a conference call with Wall Street analysts to discuss the results, Zuckerberg acknowledged, “A lot of the business challenges were self-imposed.” He said the company has made significant investments in shoring up privacy and protecting the platform even though those expenses have cut into the company’s profitability. He repeatedly mentioned the company’s openness to regulatory restrictions, a step no U.S. agency has yet taken.
COO Sheryl Sandberg also hit the make-good theme in her remarks. “We have to earn back people’s trust — not with words, but with actions,” she said.
She emphasized the integrity of Facebook as an incubator of businesses and as a haven for advertisers. While many brands have had to re-examine their buys on Facebook now has seven million active advertisers, she said.