Facebook Inc on Wednesday easily beat Wall Street’s profit estimates, soothing investor concerns that increased spending on the privacy of its users would blunt growth, Trend reports citing Reuters.
The world’s largest online social media network has pledged to invest heavily in the privacy and security of its users after scandals over improperly shared data and propaganda hurt its image and made it the target of political scrutiny across the globe.
Wednesday’s better-than-expected profit reassured investors that the company could keep growing, even after posting its slowest quarterly revenue growth in more than six years as a public company.
“These numbers are actually some of the most reassuring in its short history,” said George Salmon, an analyst at Hargreaves Lansdown. “Not only are login trends in Europe improving after a stagnant couple of quarters, the group has beaten expectations on revenue and profit. These results will go a long way toward regaining the trust of Wall Street.”
Facebook shares rose nearly 12 percent to $168.20 after the bell. They closed up 4.3 percent in regular trading.
Net income rose to $6.88 billion, or $2.38 per share, in the fourth quarter, up from $4.27 billion, or $1.44 per share, a year earlier. Analysts on average had expected earnings of $2.19 per share, according to IBES data from Refinitiv.
Total fourth-quarter revenue rose 30 percent to $16.9 billion from $12.97 billion, compared to analysts’ average estimate of $16.4 billion.
“The worst is over for this social media giant,” said Haris Anwar, an analyst at Investing.com: “Its ad business and user engagement haven’t been affected despite all the negative blows of the past year.”
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