Facebook Reports Increased Profit But Slow User and Sales Growth
Facebook on Tuesday reported higher than expected profit but missed targets for growing monthly users and reported its slowest revenue growth in about six years in a quarter.
The company's total expenses in the third quarter surged to $7.95 billion, up 53 percent compared with a year ago. But operating margin fell only 2 percentage points from last quarter, to 42 percent.
Facebook's revenue was in line with expectations, when accounting for what the company said were unfavorable foreign exchange rates.
Overall third-quarter revenue was $13.73 billion, up 33 percent from the same period last year.
Quarterly profit of $5.14 billion, or $1.76 per share, was up 9 percent from the same period last year.
Facebook's ad sales continue to surge as it found ways to better target ads. The company's Instagram and WhatsApp platforms could eventually provide more profit, as the usage of the main Facebook app is not growing fast. Future will have to convince marketers to use new ad formats -- specifically ads in messaging and marketing spots embedded in a popular way of sharing called "stories," especially on Instagram.
Facebook lost 1 million monthly users in Europe for the second straight quarter. It gained 1 million monthly users in the United States after holding steady last quarter.
The company also suffered from a data breach affecting 29 million users in September and a privacy scandal involving a British political consulting firm in March.
Facebook is also playing whack-a-mole in the fight against election meddling by Russia and Iran, waged a near-constant battle against fake news and faced a string of controversies over data misuse.
Facebook said that 2.6 billion users interact with at least one of its apps each month, up from 2.5 billion when it released the figure for the first time last quarter.
Monthly and daily users of the main Facebook app compared with last quarter were up 10 percent to 2.27 billion and up 9 percent to 1.49 billion, respectively.