The world’s biggest social media company, Facebook, recently posted its fourth-quarter earnings which were better than what many stock market experts had expected, against a backdrop of growing regulatory and political challenges.
Facebook, Instagram, and WhatsApp now have a combined user base of 3.3 billion to get their messages out.
Facebook itself has about 2.8 billion monthly users, beating the Wall Street market prediction of 2.76 billion, as humans spend more of their activities online on the basis that the COVID-19 pandemic has negatively disrupted social mobility.
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Here are highlights of key metrics expected versus the comparable year-ago quarter, according to a Bloomberg consensus forecast of Wall Street analysts:
- Revenue: $28 billion vs $26.407 billion estimated; $21.082 billion in Q4 2019.
- Earnings per share (Adjusted): $3.88 vs $3.54 expected; $2.56 in Q4 2019.
- Ad Revenue: $27.19 billion vs. $26.07 billion expected; $20.74 billion in Q4 2019.
- Daily Active Users (DAU): 1.84 billion vs 1.828 billion estimates; 1.66 billion in Q4 2019.
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“We believe our business has benefited from two broad economic trends playing out during the pandemic. The first is the ongoing shift towards online commerce.
“The second is the shift in consumer demand towards products and away from services.” Facebook CFO, Dave Wehner, said.
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Capital expenditures including principal payments on finance leases, were $4.82 billion and $15.72 billion for the fourth quarter and full year of 2020, respectively.
Cash and cash equivalents and marketable securities were $61.95 billion as of December 31, 2020.
However, in spite of an impressive earning resulted posted by the world’s most valuable social media company, Facebook shares tanked by more than 3% on the consideration that the company printed a blurry outlook amid growing regulatory concerns and stiff competition.
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“We also expect to face more significant ad targeting headwinds in 2021. This includes the impact of platform changes, notably iOS 14, as well as the evolving regulatory landscape. While the timing of the iOS 14 changes remains uncertain, we would expect to see an impact beginning late in the first quarter,” Dave Wehner said.