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Facebook stock tumbles despite earnings beat

Heidi Chung
Reporter

Despite reporting a beat on the top and bottom lines during its fourth quarter, Facebook (FB) stock tumbled more than 6% in after-hours trading.

Here were the numbers for Facebook’s fourth quarter compared with Bloomberg-compiled estimates:

  • Revenue: $21.08 billion vs. $20.89 billion expected, +25% YoY

  • Earnings per share: $2.56 vs. $2.53 expected

  • Daily Active Users: 1.66 billion vs. 1.65 billion expected, +9% YoY

  • Monthly Active Users: 2.50 billion vs. 2.49 billion expected, +8% YoY

  • Avg. revenue per user: $8.52 vs. $8.38 expected

"We had a good quarter and a strong end to the year as our community and business continue to grow," Facebook CEO Mark Zuckerberg said in a statement. "We remain focused on building services that help people stay connected to those they care about."

On the conference call, Zuckerberg kicked things off by saying how proud he was of Facebook’s progress in election integrity. He admitted that the company was behind in 2016, but Zuckerberg noted that Facebook’s systems are now more advanced than any other companies. “This is going to be a big year for privacy,” he added.

Facebook’s fourth-quarter advertising revenue grew 25% year-over-year and totaled $20.74 billion, which exceeded Wall Street estimates of $20.56 billion. Just about a half of Facebook’s ad revenue during the fourth quarter was generated in the U.S. COO Sheryl Sandberg revealed on the company’s earnings call that 4 million advertisers are using Stories for ads, up from 2 million a year ago.

Meanwhile, Facebook will only break out Facebook-only metrics through late 2020, according to CFO Dave Wehner. The Family Daily Active People (DAP) and Family Monthly Active People (MAP) metrics that captures registered and logged-in users of Facebook, Instagram, Messenger and/or WhatsApp will be used to assess user engagement going forward.

Visual representation of digital cryptocurrency coins sit on display in front the website home page Calibra on July 08, 2019 in Paris, France. Calibra is the digital wallet for Facebook’s Libra cryptocurrency. (Photo by Chesnot/Getty Images)

The social media company’s fourth-quarter results follow a strong third quarter in which Facebook beat Wall Street estimates in nearly every closely-watched metric. Mobile ad revenue during the third quarter represented 94% of total ad sales, up from 92% in the second quarter. 

Shares of the social media company hit an all-time high during Wednesday’s trading session. The stock has been on a strong run and rose 53% over the past 12 months outpacing the broader market’s 27% gain during the same time period.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung.

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