Facebook shares whipsawed in after-hours trading, following a mixed third-quarter earnings report Tuesday. The results fell short when it came to revenue, daily active user and monthly active user estimates in the company's latest earnings report, despite exceeding analyst expectations on earnings per share. Facebook also told investors to expect increased expenses in 2019. The company reported its third-quarter earnings after bell on Tuesday: Earnings per share (EPS): $1.76 vs $1.47 estimated, per Refinitv $1.76 vs $1.47 estimated, per Refinitv Revenue: $13.73 billion vs. $13.78 billion estimated, per Refinitiv $13.73 billion vs. $13.78 billion estimated, per Refinitiv Daily active users (DAUs): 1.49 billion vs. 1.51 billion estimated, according to FactSet and StreetAccount 1.49 billion vs. 1.51 billion estimated, according to FactSet and StreetAccount Monthly active users (MAUs): 2.27 billion vs. 2.29 billion estimated, according to FactSet and StreetAccount 2.27 billion vs. 2.29 billion estimated, according to FactSet and StreetAccount Average revenue per user: $6.09 vs. $6.09 estimated, per 2.29 billion, according to Street Account Facebook's shares were down as much as 6 percent and up as much as 5 percent after hours as investors dissected CEO Mark Zuckerberg's comments on future spending and growth. They finally settled in positive range, up about 3 percent, after the company's earnings call concluded. On the call, Zuckerberg said the company plans to invest significantly in the business in 2019 as it focuses on building out new products such as Facebook Watch, Instagram TV and Facebook Marketplace and improving cyber security. Facebook CFO David Wehner said 2019 total expenses will grow 40 to 50 percent compared to full-year 2018. "I want you to know that looking out beyond 2019, I know that we need to make sure our costs and revenue are better matched over time, and that's something that I am focused on as well," Zuckerberg said. Facebook said it's expecting between $18 billion to $20 billion in capital expenditures in 2019, above the FactSet analyst estimate of $17.29 billion. Zuckerberg also spent a large portion of the call discussing the company's progress with "Stories" features that are available across Facebook's apps, including Instagram and Messenger, saying that "the trends that we have seen suggest that in the not too distant future, people will be sharing more into Stories than they will into feeds." The Stories features are growing faster than the company is able to monetize, so Facebook will need to work on building out ad products to run alongside that user content, Zuckerberg said. "This is one of those situations where the community growth that we're seeing is outpacing the progress that we have made so far on developing the ads in that space," he said. Zuckerberg also discussed the company's challenges with user safety and harmful content, saying Facebook has made progress but it will likely not have a firm grasp on the problem until end of 2019. "We're getting better and better at this, but I anticipate that it will be about the end of next year when we feel like we're as dialed in as we would generally all like us to be," he said. "And even at that point, we're not going to be perfect." More than 2.6 billion people use the Facebook family of apps per month, the company said. Those apps include Facebook, WhatsApp, Instagram or Messenger. That figure was up 100 million more people from last quarter. More than 2 billion people a day use at least one of those apps.<doc-sep>Facebook Inc. (FB) - Get Report reported mixed results for its third quarter on Tuesday after the close, sending shares down, then slightly higher after hours before falling again during the earnings call with analysts. Earnings per share came in at $1.76, ahead of consensus estimates of $1.46, but revenue of $13.73 billion slightly missed estimates of $13.77 billion. Daily average users came in at 1.49 billion, up 9% year over year and below a 1.51 billion consensus. Monthly average users were 2.27 billion, up 10% and below a 2.29 billion consensus. Shares were down about 2% after hours after the company discussed its spending plans and revenue outlook on its earnings call. TheStreet's tech columnist, Eric Jhonsa, is live blogging the company's earnings report right after the close, as well as its call with analysts scheduled for 5p.m. ET. Please submit your questions in the box at the top of the chat window. Jim Cramer's Action Alerts Plus Club owns Facebook in its portfolio; for great analysis from Jim and his team on Facebook and all of the day's market news, click here for a free trial.<doc-sep>Facebook Inc. beat Wall Street expectations for profit Tuesday, despite numerous public-relations crises over the past several months and a forecast that led to a record drop for shares three months ago. Facebook FB, -0.04% stock seesawed after third-quarter earnings were released Tuesday afternoon, but settled at gains of roughly 3% once the conference call with executives concluded. As the numbers hit the wire, Facebook stock fell almost 4% in after-hours trading, but recovered minutes later and kicked off the call barely in the red, then headed south during prepared remarks before recovering for gains after executives wrapped up without delivering another guidance surprise. The stock was up about 4% in premarket trade Wednesday. Last quarter, Facebook stock dove deep into the red when Chief Financial Officer David Wehner delivered a weak forecast. Tuesday, though, Wehner seemed to help bring the stock back from its deepest after-hours ravine. Investors had begun to drive the price down as Chief Executive Mark Zuckerberg launched the call, and by the time Wehner began to deliver his prepared remarks, the stock was already sliding and continued to its worst point in after-hours trading, roughly a 5% drop. Don’t miss: Technology-stock valuations are returning to Earth After Wehner wrapped up without devastating news and Facebook turned to analyst questions, shares rebounded and continued to do so until the call wrapped up just after 6 p.m. Eastern. The CFO said Facebook expects revenue growth to slow by a “mid-to-high single-digit percentage” compared with its third quarter, which is slightly better than the high-single-digits forecast Wehner delivered three months ago. Wehner explained that growth is coming from services that make Facebook less money, data-privacy is having an effect on “pricing grow” and the company is focusing on Stories, which “will displace some ad impression opportunities.” These same factors will continue to slow revenue growth in 2019, he said. The Menlo Park, Calif.-based company reported $5.14 billion in net income for the quarter, which amounts to $1.76 a share, up from $1.59 a share in the year-ago period. Analysts’ average estimates for third-quarter profits called for $1.46 a share, according to FactSet. Overall, Facebook logged sales of $13.73 billion, up from $10.14 billion in the year-go period, but slightly missing expectations for sales of $13.77 billion, according to FactSet. Facebook’s main source of revenue is ads, which brought in $13.54 billion, up from $10.14 billion in the year-earlier period. Facebook’s payments and other fees category — which includes its Oculus virtual-reality hardware — banked $188 million compared with $186 million last year. Read: How America’s top CEOs are spending their own money on the midterm elections Facebook reported 2.27 billion monthly active users and a daily user count of 1.49 billion, up 10% and 9%, respectively. In the U.S. and Canada, the company’s most profitable markets, the daily member count remained flat at 185 million, the fifth consecutive quarter the daily user total has remained flat or dropped; monthly users ticked up to 242 million from 241 million in the first and second quarters of this year. Despite the flat or declining member growth in the U.S. and Canada, Facebook was able to earn more money from each user in those countries: It banked $27.11 in revenue per user, up from $21.20 in the year-earlier period. “Although revenue came in slightly lower than Wall Street expectations, it wasn’t a significant shortfall,” eMarketer principal analyst Debra Aho Williamson wrote in an email. “Importantly, Facebook grew revenue at a nice pace in the important U.S. and Canada markets. Facebook also managed to eke out a small usage gain in the U.S. and Canada. After the flatness we saw last quarter, that’s a good sign.” “Overall, given all the challenges Facebook has faced this year, this is a decent earnings report,” Williamson concluded. See also: President Trump, migrant caravans and the science behind the allure of #fakenews Those challenges showed up again in Facebook’s spending, as total costs and expenses grew 53% to $7.95 billion in the third quarter, while profits grew by 9%. Facebook continued to add to its workforce, growing its head count 45% to 33,606 in the third quarter, compared with the same period last year. Co-founder Zuckerberg has said in the past the company planned to hire 20,000 people to handle safety and security on its platforms. Zuckerberg did not dwell on the issues Facebook has faced in the past year, as he has done in previous conference calls since the Cambridge Analytical data-privacy scandal. Zuckerberg did not apologize a single time during the call. Ahead of Facebook’s earnings, several analysts published notes suggesting that advertisers were beginning to take note of the wave of public-relations crises the company has been dealing with. Brand advertisers especially were said to be less willing to increase their budgets than in the past. For most major brands and companies, media buyers have considered Facebook a requirement when building a digital ad campaign, while smaller rivals such as Twitter Inc. TWTR, +1.49% and Snap Inc. SNAP, +2.43% are seen as more useful for product launches or specific, short-term objectives. Related: Snap stock falls after user base shrinks again but new ad formats gain steam In a phone interview late Tuesday, PMX Agency vice president of social and display Jesse Math said that clients have had conversations about Facebook’s issues — “it’s been a core part of conversations with Facebook too” — but PMX hasn’t seen an impact related to budgets. “I like a platform that has 1.5 billion people,” Math said. “We’re focused on driving performance for clients and Facebook is going to be a primary driver of that success.” Math says that because of some of the changes Facebook has made to its platform, his organization has suffered “short-term pain” in terms of the insights it can glean from running ad campaigns on the social network. “But that will be solved in the long term,” Math said. Before Tuesday’s after-hours trading, Facebook stock had fallen 17.1% this year as the S&P 500 index gained 0.3%. The company’s stock dropped roughly 20% after its second-quarter earnings missed sales expectations and showed slowing user growth.<doc-sep>
Facebook Inc. (FB) - Get Report soundly beat earnings expectations for its third-quarter earnings report, but missed on revenues and user growth expectations. After initially falling as much as 5% after-hours on its Q3 results, Facebook shares recovered but then fell again during the earnings call with investors. As of the time of this article, Facebook shares were down slightly at $145.78. TheStreet is live blogging Facebook's third-quarter earnings. Please join us. Earnings came in at $1.76 per share, missing Wall Street's estimates of $1.46. Revenue was $13.7 billion, missing estimates of $13.8 billion. Net income for the quarter was $5.14 billion. Daily active users missed estimates, coming in at 1.49 billion, a 9% year-over-year increase, compared to estimates of 1.51 billion. CEO Mark Zuckerberg noted in a press release that more than two billion people use at least one of Facebook's services every day, and highlighted the areas that Facebook is focused on for user growth. "We're building the best service for private messaging and stories, and there are huge opportunities ahead in video and commerce as well," Zuckerberg said. Instagram monetization was much of the focal point for Facebook investors leading up to the earnings print, and while management did not disclose much on that front, it likely will on its earnings conference call at 5 p.m. ET. In addition to updates on Instagram, Facebook's elevated costs are also top of mind as it continually hires more people to deal with fake news, user security and data privacy issues. The company reported that its headcount increased 45% year-over-year. "The problem I think, the worry, is that costs are growing faster than revenues -- that can't be sustained," Maz Jadallah, founder and CEO of AlphaClone, an ETF firm aiming for above market returns, told TheStreet. Facebook's operating margin shrunk from 50% in the third-quarter last year to 42% in this year's third-quarter. Facebook is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells FB? Learn more now.