Facebook announces record 4Q18 profits | Articles | Digital

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Ali Mogharabi: Facebook's fourth-quarter results easily beat expectations as the daily average user count grew sequentially in the largest ad spending markets, USA and Europe, even though the firm remains in the midst of addressing data security and privacy issues. The social networking company reported $2.38 earnings per share (EPS) for the quarter, topping the Thomson Reuters' consensus estimate of $2.18 by $0.20.

Despite a tumultuous year marked by data breach, privacy policy disputes and heavy scrutiny from federal regulator and lawmakers, Facebook's Q4 earnings increased 30 percent year-on-year from 12.97 billion dollars in the same period of 2017, beating Wall Street's expectations of 16.39 billion dollars in revenue. We remain convinced that further growth in Instagram, IGTV, and stories users will continue to attract advertisers to Facebook's platform.

The social media giant now has 2.32 billion monthly active users (MAUs) globally - an increase of 9% (year-over-year) - and 1.52 billion daily active users (DAUs), thanks to the growth in emerging markets like India, the company said late Wednesday. Aegis upped their price target on Facebook from $206.00 to $215.00 and gave the company a buy rating in a research note on Wednesday, October 31st.

At the time the report stated that Mark Zuckerburg was personally involved in the project and was pushing for its completion.

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Mobile advertising revenue represented approximately 93% of advertising revenue for the fourth quarter of 2018, up from approximately 89% of advertising revenue in the fourth quarter of 2017.


According to Zuckerberg, the idea is to let people utilise the apps to enhance the experience. He said the move is "a 2020 thing or beyond". Facebook had a return on equity of 27.95% and a net margin of 39.60%. They presently have a $195.00 price target on the social networking company's stock, up from their prior price target of $190.00.

The hire comes at the flawless time, as Facebook recently announced its plans to merge Messenger, Instagram, and WhatsApp leaving some questioning whether user privacy and data will be at risk.

Aaron Goldman, CMO for 4C (another Facebook marketing partner) expects Facebook video advertising to see more activity this year.

Facebook Stories ads and Instagram shopping. Those newer ads are less lucrative at the moment.

"Our community and business continue to grow", co-founder and chief executive Mark Zuckerberg said in an earnings call.

"The first reason I'm excited is moving more to end to end encryption by default in our products".


There are some long-term effects to the short-term privacy scares.

Facebook's hardware efforts also include the Portal video calling device launched in 2018.

On the financial aspect, Facebook made a significant improvement. That means Facebook employees can't access the iPhone apps they're developing, causing chaos at the company's headquarters in Menlo Park, California.

Sheryl Sandberg, a former Google executive who also worked in the office of the U.S. treasury secretary, is the chief operating officer. Regardless of the perception of the public about Facebook as a company, the company seems to be doing well on its own. Analysts were looking for per-share profit of $2.18. Net profit was up 61% from the same period previous year.

Facebook shares jumped 11.5 per cent to $167.67 in after-market trades that followed release of the earnings. The consequences may not come this year, but they will eventually, said Brian Wieser, an analyst for Pivotal Research.


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