November 27, 2021

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Facebook Remained Highly Profitable In Third Quarter, Easing Worries About Sales Growth

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, SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs
, SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs
, SEO, Wordpress Support & Insurance, Mortgage, Loans, Legal, Etc Blogs

Facebook’s sales didn’t grow as much as Wall Street expected in the third quarter but did remain impressively profitable, allowing the company to register a positive moment for itself amid a blitz of negative stories around controversial internal research into its apps.

The social media giant toook in $29 billion in sales last quarter, a 35% increase from a year ago. Analysts had thought Facebook would do $29.6 billion, but like many other tech companies, Facebook’s ad revenue has been impacted by a change to Apple software that’s limiting Facebook ability to provide user data to advertisers. Still, the company recorded $9.2 billion in third-quarter profit, or $3.22 in earnings per share, over 15% more than analysts had forecast.

Facebook’s quarterly figures arrive on the same day that a group of news outlets published more than two dozen stories using internal documents furnished by whistle-blower Frances Haugen, a former Facebook product manager. The so-called Facebook Papers shed new light on Facebook’s struggles to grapple with misinformation and content moderation.

Facebook and CEO Mark Zuckerberg have worked to cast doubt on the signficance of these leaked documents, instead choosing to focus on new efforts to refocus the companys’ growth efforts on influencers and creating a “metaverse” digital world using augmented- and virtual-reality technology.

“We made good progress this quarter and our community continues to grow,” Zuckerberg said in a press release. “I’m excited about our roadmap, especially around creators, commerce, and helping to build the metaverse.” In the third quarter, the main Facebook app saw 6% increases in daily and monthly users. Nearly 3 billion people worldwide now use Facebook at least once a month. Across all its apps, the company reported a 12% in monthly users, some 3.6 billion.

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To reinforce its emphasis on the metaverse, Facebook will change how it reports its financial performance in the fourth quarter, breaking out the sales and profits from the part of the company working on this project, Facebook Reality Labs. It serves another purpose, too. Facebook will be able to show the on-going profitability of its apps (Facebook, Instagram WhatsApp) while acknowledging that Reality Labs will lose money for some time to come.

Investors seem to be buying into Zuckerberg’s way of thinking. Facebook shares are up 3.5% in after-hours trading Thursday evening.

Snap didn’t get the same treatement when it reported third-quarter figures on Thursday. Its sales missed Wall Street expectations by the slimmest of margins—$3 million—and investors sent its stock down over 25%. That may have put Facebook in good sted, giving its investors time to dial back concerns around the Apple tech shift.

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