Facebook reports strong Q4 earnings despite year of troubles

Facebook CEO and co-founder Mark Zuckerberg.                  Getty Images

Facebook (NASDAQ:FB) last posted its earnings results on Wednesday, January 30th.

Total revenue earned during the quarter was $16.9 billion, with daily active users (DAU) at 1.52 billion, up 9 percent year over year.

For the three months ending on December 31, Facebook's revenue was £12.8 billion - a 30% increase on the £9.8 billion it made in the same period past year.

Facebook shares jumped 11.5 per cent to $167.67 in after-market trades that followed release of the earnings.

At the end of December past year, Facebook had some 2.3 billion monthly active users around the world.

Revenues topped analysts' forecasts at $16.9 billion and earnings per share came in at $2.38, well above Wall Street's expectations of $2.19.

For most of 2018, Facebook grappled with a host of troubles such as the scandal involving former British consulting firm Cambridge Analytica, which was accused of illegally accessing data of more than 87 million Facebook users without their prior knowledge.

Despite a challenging year, Facebook has continually increased value for brands through developments like the expansion of Shoppable Advertising in Instagram Stories and Explore as well as new platforms for improving ad targeting like Portal.

Zuckerberg controls 60 percent of voting shares through a dual-class stock structure in the California-based social networking giant which is turning 15 in February this year.

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Bernoff questioned whether Facebook was positioning itself for the rise of smart speakers using the likes of Google Assistant and Amazon Alexa.

The move, which is meant to boost the user engagement on the social networking platform at a time when growth has slowed down for the company, has raised several security and privacy concerns from users around the world.

But analysts say the trust issue is crucial for Facebook if it wants to move forward in its mission to connect the world. "Advertisers are clearly still very reliant on Facebook". During the fourth quarter, the public learned more about how it let Russian Federation manipulate users in campaigns that continued through the 2018 United States midterm elections. Versant Capital Management Inc now owns 2,826 shares of the social networking company's stock valued at $370,000 after purchasing an additional 82 shares during the period.

Overall, we remain confident that with a strong network effect moat source, which has resulted in more than 2.3 billion users, Facebook will continue to attract advertisers to its platform.

Analysts are watching to see how well Facebook's other services, including Instagram, messaging services WhatsApp and Messenger and its Oculus virtual reality division, play into its fortunes.

The company is focusing on making more of its messaging services encrypted by default, as well as expanding shopping on Instagram, he added.

As Facebook shifts its focus away from clickbait to emphasize "meaningful" interactions and fights a seemingly never-ending cycle of bad press, it's less clear what engagement with the main Facebook app looks like.

The separation between Facebook, WhatsApp, and Instagram is about to get even blurrier.

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