Facebook Shares Drop After Company Discloses That It Is Losing Young Teens
UPDATED: Daily active users of the giant social network leapt 25 percent to 728 million, while monthly users were up 18 percent to 1.9 billion.
Facebook on Wednesday reported earnings that topped expectations due to a surge in revenue generated by mobile advertising, news that sent the stock 12 percent higher in after-hours trading, though the gain was wiped out after executives disclosed that young teenagers were losing interest in the social network.
"Usage of Facebook among U.S. teens overall was stable from Q2 to Q3, but we did see a decrease in daily users specifically among younger teens," CFO David Ebersman said during a conference call with analysts on Wednesday.
Facebook shares were down fractionally to $49.01 during the regular session but had been up more than $5 after the closing bell. Shortly after Ebersman's comment, though, the stock began to slide in after-hours trading. Eventually, all the gains were erased and the stock had shed 2 percent.
Facebook said that revenue rose 60 percent in the third quarter to $2.02 billion and that the company earned 25 cents per share. Analysts were expecting 19 cents a share on $1.9 billion in revenue.
Daily active users leapt 25 percent to 728 million and monthly users were up 18 percent to 1.9 billion. Monthly users on mobile devices surged 45 percent to 874 million.
Also during the conference call, COO Sheryl Sandberg said 20 million small businesses worldwide have created Facebook pages but that there are only 1 million active advertisers. "It's one of the most exciting opportunities in front of Facebook," she said.
"The strong results we achieved this quarter show that we're prepared for the next phase of our company, as we work to bring the next 5 billion people online and into the knowledge economy," CEO Mark Zuckerberg said in Facebook's earnings release.
E-mail: [email protected]