Social media giant Facebook Inc. has taken a reputational battering over 2018 after news broke that some of its users’ data may have been inappropriately shared as a result of hacking and an agreement with Cambridge Analytica. The bad news cycle sent the stock tumbling more than 25% lower over just the last quarter with investors anxious about its performance.
Below is a summary of the results for the quarter ending September 30 2018, with all figures in US dollars:
- Diluted earnings per share of $1.76
- Revenue of $13.73b, up 33% on pcp
- Operating profit margin of 42%, compared to 55% in pcp
- Profit of $5.14b, up 9% on pcp
- Average revenue per user US & Canada $27.61
- Average revenue per user worldwide $6.09
- Total daily users 1.495b, compared to 1.368b in pcp
- Total monthly users 2.271b, compared to 2.072b in pcp
It appears the Facebook platform’s user growth is flat in its key U.S. and European markets, while the rest of the world continues to grow generally thanks to rising internet penetration rates.
The CEO Mark Zuckerberg estimated that more than 2.6 billion people use one of the group’s Facebook, Instagram, Whatsapp, or Messenger services each month.
The bullet pointed stats above for example do not include Instagram, Whatsapp or Messenger users, unless they qualify as such users based on their Facebook activities according to Facebook.
The group is especially secretive about the financials and specific growth of its Instagram platform that looks to have the most growth potential of all its current platforms.
In terms of profits the upcoming Christmas quarter is always its strongest and at $146 the group does not look too expensive trading on 21x annualised earnings of $7.04 per share.
Key to its future performance will be how badly margins are hurt by its rising costs, whether users in the U.S. and Europe switch off due to the privacy concerns, and the success of its other platforms like Instagram.
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Motley Fool contributor Yulia Mosaleva has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.