Facebook Earnings Rise Amid User Growth

Mark Zuckerberg  - April 10, 2018 - Getty - H 2019
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The social media giant saw profits and revenues beating market expectations, as user growth came in slightly better than expected.

Facebook's business and user growth remained strong as the social media giant closed out 2019, even as its stock price slid in after-market trading.

Facebook on Wednesday reported that revenue grew 25 percent during the fourth quarter to $21.08 billion. It also recorded earnings per share of $2.56. Analysts polled by FactSet were looking for $20.9 billion in revenue for the quarter and earnings of $2.53 per share. 

Facebook had 1.66 billion daily active users at the end of 2019, up 9 percent from a year earlier. 

The strong 2019 performance comes as Facebook has faced increased scrutiny from government regulators over its handling of users' private data. The company, which has also come under fire for its role in spreading misinformation during the 2016 election, is heading into yet another presidential election year. CEO Mark Zuckerberg acknowledged the challenge, but added "we think our systems are now more advanced than any other company" at identifying misinformation campaigns from outside forces. 

The exec also addressed the growing chorus of criticism against Facebook. "My goal for the next decade isn't to be liked but to be understood," said Zuckerberg. "In order to be trusted, people need to know what you stand for." 

The company offered little insight into the growth of its portfolio of brands, including WhatsApp and Instagram. While Instagram remains a crown jewel for the company, eMarketer estimates that its user growth in the U.S. slowed during 2019. 

Meanwhile, Facebook's high-profile video effort, Watch, is undergoing some change. The company has canceled the critically acclaimed drama series Sorry for Your Loss and the Jessica Biel thriller Limetown as it focuses on unscripted projects like the Jada Pinkett Smith-hosted Red Table Talk, which recently received a three-year renewal. Zuckerberg downplayed the Watch investment, noting that video content acquisition should be considered "along the lines of marketing or bringing people into the service."

Shares in Facebook closed the day up 2.4 percent to $223.23, but were down 6 percent to $208.91 in early after-market trading on the NASDAQ.