Facebook (NASDAQ:FB) reported better-than-expected fourth-quarter results, but its share came under pressure amid slowing revenue growth in the wake of increased regulatory scrutiny.
Facebook (NASDAQ:FB) announced earnings per share of $2.56 on revenue of $21.08 billion. Analysts polled by anticipated EPS of $2.52 on revenue of $20.88 billion.
That compares to to EPS of $2.38 on revenue of $16.91 billion in the same period a year before. Facebook had reported EPS of $2.12 on revenue of $17.65 billion in the previous quarter.
Facebook's revenue was up 25% for the quarter, thanks to better-than-expected revenue per user. But this marked the slowest annual pace of revenue growth rate in its history.
The stock fell 6.4% postmarket.
Daily active users (DAUs), one of the key metrics that analysts use to gauge the health of the company, increased 9% from the year-ago period to 1.66 billion, slightly above estimates 1.65 billion. Monthly active users rose 8% to 2.5 billion, in line with estimates.
Family daily active people (DAP) rose 11% to 2.26 billion year on year on average for December 2019, and family monthly active rose 2.89 billion 9% year on year.
“We had a good quarter and a strong end to the year as our community and business continue to grow,” Facebook CEO Mark Zuckerberg said in a statement. “We remain focused on building services that help people stay connected to those they care about.”
Facebook has strived to maintain user growth at a time when regulatory scrutiny on social media platforms intensifies. But analyst Haris Anwar maintains a positive view on the social media giant.
"There's no sign the challenges for the world’s largest social media platform will disappear any time soon. However, despite this tough operating environment and the company’s cautionary tone, the reality is that there is no other platform for advertisers as powerful or as global as Facebook is. We don’t see that that power diminishing anytime soon, which is one of the main reasons we continue to like Facebook stock, notwithstanding the ups and downs," Anwar said
The company also announced the launch of a $10 billion stock buyback program.
Facebook (NASDAQ:FB) shares are up 8% from the beginning of the year and are trading at $207.56, still down 0.41% from its 52 week high of $224.20 set on Jan. 29. They are outperforming the Nasdaq which is up 2.61% year to date.
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