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Facebook earnings beat but the company warns of impact from Apple privacy changes

 

 

Facebook stocks entered after-hours trading on Wednesday after the company reported its fourth-quarter earnings. The company has warned of impending changes to Apple’s 14th and a return to epidemic practices could damage its advertising business.

Here are the numbers:

Earnings: $ 3.88 per share vs $ 3.22 per share per Refinitiv forecast
Revenue: $ 28.07 billion vs $ 26.44 billion forecast by Refinitiv
Daily active users (DAUs): 1.84 billion vs 1.83 billion forecast by FactSet
Monthly active users (MAUs): 2.8 billion vs 2.76 billion forecast by FactSet
Medium revenue per user (ARPU): $ 10.14 vs $ 9.49 forecast by FactSet
Facebook chief executive Mark Zuckerberg said the company was now looking at measures to reduce the amount of political material users see in their News Feed. The announcement comes after a coup in the U.S. Capitol January 6th.

“One of the positive responses we hear in our community right now is that people don’t want politics and strive to take their knowledge through our services,” Zuckerberg said.

In addition, Zuckerberg has announced that Facebook plans to stop permanently recommending social and political groups to users around the world. This comes after the company temporarily decided to stop recommending these groups to American users in October ahead of the 2020 U.S. election.

“This is a continuation of the work we have been doing for a while to reduce the temperature and end the divisive negotiations,” Zuckerberg said.

The company said it benefited in 2020 from the transition to online marketing and products during the epidemic. Facebook has warned that these methods may measure or reverse and could “serve as a stumbling block to the growth of advertising revenue.”

The company also warned that Apple’s privacy changes to iOS 14, which could affect Facebook’s ability to target ads, could begin to affect its business by the end of the first quarter.

Zuckerberg said Facebook is increasingly regarding Apple as one of its biggest rivals.

“Apple may say they are doing this to help people, but these measures clearly follow their competitive interests,” Zuckerberg said. “This is important for people to understand because we and others will argue about this in the foreseeable future.”

In the U.S. and Canada, the Facebook user base fell to 195 million daily active users from 196 million in the last quarter. This is the second consecutive quarter when the company has lost users in the U.S. And in Canada.

Its user base in Europe has risen to 308 million daily working users, its first growth in the region after three quarters of 305 million.

Facebook estimates that it counts 3.30 billion monthly users into their apps’ family, compared to 3.21 billion last quarter. This metric is used to measure Facebook’s user base throughout its main system, Instagram, Messenger and WhatsApp.

Facebook’s “Other” revenue went to $ 885 million a quarter, an increase of 156% compared to last year. That’s more than 3% of Facebook’s revenue per quarter. This includes the sale of real Oculus headsets and Portal video chat devices. Sales have grown as people have clung to homes seeking entertainment and ways to connect with loved ones during the epidemic.

Facebook Chief Financial Officer David Wehner noted that this amount of money received “Other” is due to the strong holiday sales of the real Oculus Quest 2 headset.

The company has announced it has repurchased up to $ 25 billion in Facebook stock.

The nomination is open to 2021 CNBC Disruptor 50, a list of independent startups that use explosive technology to become the next generation of major public companies. Post Friday, February 12, 3pm EST.

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