Facebook Posts Record Profits Despite a Year of User Data Scandals

Facebook Posts Record Profits Despite a Year of User Data Scandals

Instagram Stories, the Snapchat clone that is created to let Instagram users share what they're doing with their followers, now has 500 million daily active users, Facebook announced during its latest earnings call on Wednesday.

The company said fourth-quarter sales were $16.91 billion, ahead of the $16.4 billion analysts expected.

Facebook shares jumped 7.7 per cent to US$161.99 following the release of the earnings.

This was a much-needed boost for Facebook's stock which fell by 34 percent since the company's earnings call in July in which it predicted slow revenue growth and an increase in expenses due to its investment in security measures following multiple user data breaches. As of December 2018, Facebook daily active user base was over 1.52 billion, according to the report.

Facebook's main app has more than 2.3 billion users.

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.

The company has a market cap of $436.97 billion, a price-to-earnings ratio of 21.89, a price-to-earnings-growth ratio of 0.96 and a beta of 0.58.

Aaron Goldman, CMO, 4C Insights, said: "Facebook's Q4 performance represents continued advertiser confidence in the company's suite of platforms". However, Facebook of late started using Stories to generate some revenue.

For more information, you can read Zuckerberg's full statement here. Shares of Google parent Alphabet Inc rose 1.4 percent in extended trading on Wednesday.

"There's a lot more that we need to figure out before we finalize the plans".


But analysts say the trust issue is crucial for Facebook if it wants to move forward in its mission to connect the world.

Leo Sun owns shares of Facebook.

The hire comes at the flawless time, as Facebook recently announced its plans to merge Messenger, Instagram, and WhatsApp leaving some questioning whether user privacy and data will be at risk.

Advertising revenues for 2018 were a staggering $55bn.

One research analyst concluded "The bottom line is that with more than a quarter of the world using FB every day, we think advertisers have no choice but to follow their customers".

The group estimates it has 2 billion active users across all its apps including Facebook, Instagram, Messenger and WhatsApp.

One analyst cautioned the risk to Facebook's stock may be further in the future, when European regulators get more deeply involved in their privacy probes.

These metrics are a key signal to investors and others about how the company is doing and how quickly it's growing.

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.

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