This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
It was good news and bad news for Facebook’s third-quarter (Q3) earnings report. While the social media company beat earnings expectations, it fell short in generating revenue.
Facebook’s revenue miss
Facebook exceeded its earnings per share (EPS) total with $1.76, more than the expected $1.47. Revenue was $13.73 billion, less than analysts’ hopes for $13.78 billion. The number of daily users in Q3 shrunk to 1.49 billion users and monthly visitors also decreased on Facebook to 2.27 billion. While there were fewer Facebook users, there was an increase of 100 million people visiting its other social media properties, like Instagram and WhatsApp.
Facebook said it expected its revenue to decline because of its investment in compliance with the General Data Protection Regulation(GDPR), an initiative that is meant to protect users’ privacy. The confidentiality of Facebook visitors’ information has been a major issue for the company during most of 2018.
Privacy issues and fake news hurt Facebook
In addition to the invasion of users’ privacy, Facebook users also had to battle the proliferation of misinformation from international forces trying to influence the US midterm elections. The social media company noted that it deleted hundreds of millions of fake accounts in response.
Facebook chief executive officer (CEO) Mark Zuckerberg vowed to correct the problem earlier this year but admitted that it would take time.‘I wish I could snap my fingers and in three to six months solve all these issues,’ said Zuckerberg. ‘I think the reality is complex. I think this is a multiyear effort.’
Despite Facebook’s challenges, the stock ticked up 3% after the initial rele