Facebook's shares tumble as growth disappoints

Yahoo Finance

Facebook Inc. on Wednesday warned revenue growth would slow in the second half of the year and said that expenses would grow faster than revenue next year, sending shares down as much as 22 per cent over concerns about the impact of privacy issues on the social media company's business.

Its number of daily active users, 1.47 billion, was also up 11% year-over-year. The social media giant's shares are plunging at breakneck speed of nearly 20% in after-hours trading.

Even after Facebook CEO Mark Zuckerberg was hauled in front of lawmakers on both sides of the Atlantic and federal agencies began to probe Facebook, prompting calls for increased regulation, investors and advertisers were undeterred, propelling the stock to new highs.

On the Q2 earnings call, CFO David Wehner said the company expects revenue growth to slow to single digits over the next two quarters from 42% year-over-year in the second quarter.

Facebook said that it brought in adjusted earnings of about $1.74 per share for the period, which was two cents ahead of the Wall Street consensus estimate of $1.72 per share, according to Thomson Reuters.

Total revenue rose 41.9 percent to $13.23 billion. Instagram last month reported it had hit 1 billion monthly users for the first time, up from 800 million in September.

The proximate cause was the company's disclosure its revenue rate growth will slow precipitously in the current quarter and the next one.

Trump and Juncker set for tough talks on trade
The USDA said in a press release the $12 billion is in line to offset the estimated $11 billion impact of the retaliatory tariffs. A 25 percent tariff on steel and a 10 percent tariff on aluminum were imposed on Canada, Mexico, and the European Union.

In the same quarter a year ago, Facebook rang up $1.32 in EPS on revenue of $9.32 billion. That same number fell in Europe, where the company has had to comply with a strict new privacy law, known as GDPR, the Washington Post reported. We launched our tool to make political advertising much more transparent, including letting you see who any political or issue ad is targeting, how much they're spending and more.

"The market was expecting a lot more", Wieser says. The company may have halted more ad purchases than expected as it applied a broad definition of what's considered "political".

The social network beat the predicted $1.72 earnings per share, reporting $1.74. Facebook said that family audience measures how many people it counts across all of its apps, including the main Facebook app, Facebook Messenger, WhatsApp and Instagram.

The firm, which is facing backlash for its handling of fake news and privacy, said it had 2.23 billion monthly active users at the end of June.

"There is never a "right time" for a transition like this, but the team and the company boast incredible talent and will navigate this well", Stretch said on his Facebook page. The company is also rapidly expanding its real estate around the world to accommodate a hiring spree, which includes thousands of new workers to help combat foreign election manipulation on the site.

Facebook's operating margin fell to 44 per cent in the second quarter from 47 per cent a year ago.

Before the results were announced, Facebook's shares had closed in NY at $217.50, a record high, and had gained 23% this year.

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