Facebook Expected to Post Higher Revenue, Analysts Watch Instagram Growth
29 Enero 2020 - 5:29AM
Noticias Dow Jones
By Jeff Horwitz
Facebook Inc. is scheduled to report its fourth-quarter and
full-year 2019 results after the market closes Wednesday. Here are
the key points to watch:
REVENUE FORECAST: Facebook is expected to post revenue of $20.9
billion for the quarter and $70.5 billion for the year, according
to FactSet, up from $16.9 billion in the fourth quarter of 2018 and
$55.8 billion for that year.
EARNINGS FORECAST: Analysts polled by FactSet expect Facebook's
quarterly profit will be $2.53 a share, rising to $7.3 billion from
$6.9 billion a year earlier. But earnings for the year are
anticipated to be $8.75 a share, down slightly as year-over-year
profit is expected fall to $18.3 billion from $22.1 billion,
largely because of a $5 billion privacy settlement with the Federal
Trade Commission.
WHAT TO WATCH:
-- DRAMATIC COMPANY, STEADY RESULTS: If analysts' expectations
are met, Facebook will report diminishing cost growth and healthy
results across its advertising business, which is the only one that
matters. Concerns about the health of the main Facebook app have
receded, with engagement and revenue growth from the core newsfeed
product surprising analysts last quarter, even as the company has
remained in the headlines over regulatory and privacy issues.
Facebook and Alphabet Inc.'s Google have steadily increased their
dominance of the digital advertising market in recent years, and
this quarter isn't expected to be any different.
-- INSTAGRAM DECELERATION: While consistently impressive, the
pace of Instagram's revenue growth appears to be slowing, according
to data from digital-marketing firm Kenshoo, which estimates
platform-specific spending that Facebook itself doesn't reveal.
While Kenshoo's estimate of 22% year-over-year revenue growth for
the image-based social platform is below the industry average, it
is still quite good. Meanwhile, eMarketer estimates that
Instagram's user growth in the U.S. will have slowed from 10.1% in
2018 to 6.7% in 2019, with older demographics not picking up the
app as quickly as previously forecast. Any guidance from the
company about the state of Instagram's business will be watched
closely.
-- NEW BUSINESS FRONTIERS: With advertising holding steady at
98.4% of Facebook's revenue, finding new "surfaces" to advertise on
is a challenge. Expect analyst interest in services such as
Facebook Marketplace, Instagram Checkout and features offered by
Messenger and WhatsApp -- especially because Facebook has backed
off the plans to monetize WhatsApp through ads. And while the
Facebook-backed Libra cryptocurrency project isn't looking likely
to meet Facebook's initial 2020 launch target, the company's
interest in money transfers is alive and well.
Write to Jeff Horwitz at Jeff.Horwitz@wsj.com
(END) Dow Jones Newswires
January 29, 2020 06:14 ET (11:14 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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