Facebook's Year of Crisis Doesn't Dent Fourth-Quarter Earnings

Mark Zuckerberg - F8 Facebook Developer Conference - Getty - H 2018
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The stock soared nearly 12 percent during after-hours trading on the strong financial performance.

Facebook's year of crisis didn't put a dent in its business. 

The social network grew quarterly revenue by 30 percent to $16.9 billion during the final three months of 2018 and earned $2.38 per share. That's a much better quarter than Wall Street was expecting, with the consensus that Facebook would report revenue of $16.4 billion and earnings of $2.18 per share. 

The stock soared nearly 12 percent during after-hours trading on the strong financial performance. 

Facebook continues to add users, though growth is slowing. The company ended the quarter with 2.32 billion monthly active users, up 9 percent from the same period last year. Daily active users also grew by 9 percent to 1.52 billion. Analysts were expecting MAUs of 2.32 billion and DAUs of 1.51 billion.

Broken down into regions, Facebook added 1 million DAUs in the U.S. and Canada and 4 million in Europe, where during the third quarter it saw a decline in users. Monthly active users in the U.S. have stalled, however, at 242 million for the quarter. 

Facebook had a rough 2018 as it dealt with one issue after another, from concerns about its protection of private user data during the Cambridge Analytica scandal to questions over its handling of Russian manipulation on its site. The crises even followed Facebook into 2019, with TechCrunch reporting one day before the earnings report that the company had been using Apple's internal app distribution program to track teenage consumption habits for research purposes. Apple followed up the report by saying that the move by Facebook was a "clear breach" of the agreement it had with the iPhone giant. 

Facebook CEO Mark Zuckerberg took time to address those challenges at the beginning of a post-earnings call with investors. "These are all complex issues but we've made real progress," he said, noting that Facebook has a roadmap in place for work that still needs to be done. But the company's strong quarter overshadowed questions about Facebook's work to improve security, and just one analyst asked how the events of the last year have impacted the business. The answer? Just look at the financial results. 

Facebook's small but growing video platform, Watch, was also the subject of questions. Zuckerberg noted that over the last 12 to 18 months, Facebook has "limited the amount of video that we show in News Feed to make sure that it doesn't displace social interactions that people are having." While people are tuning in to Watch, the exec said the goal now is to make sure "the consumption isn't all just passive consumption." 

Facebook stock closed the day up 4 percent to $150.09.