Facebook yesterday reported its slowest quarterly revenue growth in more than six years as a public company but easily beat Wall Street’s profit estimates, soothing investor concerns that rising costs would blunt growth.
Shares of the world’s biggest online social network rose nearly 9% to $163.30 after the bell. They closed up 4.3% in regular trading.
Net income rose to $6.88 billion, or $2.38 per share, in the fourth quarter, up from $4.27bn, or $1.44 per share, a year earlier.
Analysts on average had expected earnings of $2.19 per share, according to IBES data from Refinitiv.
Total fourth-quarter revenue rose 30 percent to $16.9 billion from $12.97bn, compared to analysts’ average estimate of $16.4bn.
“The worst is over for this social media giant,” said Haris Anwar, an analyst at Investing.com:
Facebook has pledged to focus on the privacy and security of the world’s largest social network after a series of scandals over improperly shared user data and propaganda hurt its image and made it the target of political scrutiny across the globe.
The company’s shares have lost a third of their value since July, when it first warned about slowing growth in revenue and operating margin.
The share price remains near its lowest point in two years.
“We’ve fundamentally changed how we run our company to focus on the biggest social issues, and we’re investing more to build new and inspiring ways for people to connect,” Mark Zuckerberg, Facebook’s founder and chief executive, said in a statement.
Previously, Facebook’s weakest quarterly sales growth as a publicly traded company, 32.2%, came in each of its first two reporting quarters in 2012.
Total expenses in the fourth quarter surged to $9.1bn, up 62% compared with a year ago.
The operating margin fell to 46% in the fourth quarter from 57% a year ago.
Despite its privacy issues, Facebook managed to gain some new users, particularly in India, Indonesia and the Philippines.