Facebook shares swung wildly in after-hours trading Thursday Sydney time after the social media giant reported a mixed set of quarterly figures showing a solid profit, but weaker than expected revenues.
In fact, the September quarterly report showed the slowest quarterly revenue growth in six years.
Early on investors ignored all the negatives and focused on the earnings beat. Facebook shares fell 5%, then rose to be up 2% and then eased to end the after-hours session down 4% as investors realised the report also contained bad news on costs (up 52% year on year).
But they then rallied strongly to end up 4.4% to end above $US152.
The quarterly earnings statement came out after trading had finished for the day, In the regular session, the shares rose 2.9% to close at $US146.22.
Reflecting the toll of a series of poor to bad publicity stories, Facebook reported mixed third-quarter results, missing market estimates for revenue and monthly active users but easily beating profit forecasts.
Sales fell a touch short of expectations, reaching $US13.73 billion, against the market forecast average of $US13.78 billion. That was up 33% year-on-year, or 34% on a constant currency basis.
Net income was $US5.1 billion, up 9% from the third quarter of 2017.
Facebook continued to lose users in Europe. The social network had a million fewer monthly active users this quarter at 375 million, compared to the quarter before.
Overall, monthly active users grew 10% year-on-year to 2.97 billion(just short of market forecasts), but the number of daily active users grew more slowly, rising at a 9% rate year-on-year.
The number of monthly active users from North America rose by a million quarter-on-quarter.
In total, more than 2.6 billion people now use Facebook, WhatsApp, Instagram or Messenger every month, and more than 2 billion use at least one service daily.
But the big concern was the rapid rise in costs which soared 53% year-on-year, as Facebook hires thousands of human moderators and invests in artificial intelligence to try to control the spread of hate speech and fake news.
That cost surge slashed the company’s operating margin from 50% in the third quarter last year to 42% this year (which is still nice and plump).
