Facebook posts record profits as it shrugs off scandal-filled year

Facebook posts record profits as it shrugs off scandal-filled year

Facebook posts record profits as it shrugs off scandal-filled year

After 18 months of distraction defending itself over privacy and its role as a platform for electoral manipulation, Facebook Inc is focusing squarely on products after its strong fourth-quarter results won back investors, who sent its shares up almost 12 percent on Thursday.

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. Aside from video, which we estimate will account for 31% of Facebook's U.S. ad revenues this year, the ad opportunities for messaging and stories are very underdeveloped at this point.

Investment analysts at Piper Jaffray Companies lowered their Q1 2019 earnings estimates for shares of Facebook in a research report issued on Thursday, January 31st.

"We've fundamentally changed how we run our company to focus on the biggest social issues", CEO Mark Zuckerberg said in the earnings release, "and we're investing more to build new and inspiring ways for people to connect".

Facebook had some 2.3 billion monthly active users around the world at the end of December, the key metric for the company. However, Facebook of late started using Stories to generate some revenue. We remain convinced that further growth in Instagram, IGTV, and stories users will continue to attract advertisers to Facebook's platform.

Facebook is working to let people send messages to one another no matter which of the company's messaging apps they are using, with an increasing emphasis on making content encrypted and ephemeral, according to Zuckerberg. "Advertisers are clearly still very reliant on Facebook".

The company has a market cap of $436.97 billion, a price-to-earnings ratio of 21.89, a price-to-earnings-growth ratio of 0.96 and a beta of 0.58. Net income rose from $4.3 billion to $6.9 billion in the fourth quarter of 2018. He said the move is "a 2020 thing or beyond".

Facebook is no longer the preferred social network for the youngest age groups, at least in the United States.

Advertising revenues for 2018 were a staggering $55bn. Facebook has been running more promotions in messaging apps and in user posts called "stories" that only last 24 hours, because the main Facebook news feed is so popular it has less room to grow.

"We have learned in capitalism that when companies get a lot of power and say they are doing what is best for you, we need to scrutinize them more", Bernoff said. "I think it's been a pretty productive day at Facebook", she said. He also highlighted the possibility that Messenger - and the combined WhatsApp / Instagram system - could serve as an iMessage-like layer for SMS that would offer more functionality and security.

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