Followers | 680 |
Posts | 141228 |
Boards Moderated | 36 |
Alias Born | 03/10/2004 |
Thursday, March 26, 2020 10:26:36 AM
By: Motley Fool | March 26, 2020
• The social networking giant says that "our business is being adversely affected" and that it's "seen a weakening in our ads business."
Along with other companies across industries providing updates to investors regarding financial impacts of the COVID-19 pandemic, Facebook (NASDAQ:FB) acknowledged this week that its revenue is being hurt. However, the social networking giant stopped short of quantifying the effect or providing detailed guidance. The news is somewhat expected following comments from COO Sheryl Sandberg last month that "the marketing industry is certainly going to see a real impact."
Smaller rival Twitter (NYSE:TWTR) withdrew its guidance earlier this week, saying revenue in the first quarter is now expected to decline after initially guiding its top line to around 9% growth at the midpoint of its forecast. Here's what Facebook said.
Usage of non-monetized services is soaring
As one might expect, the COVID-19 outbreak is driving increased usage of many Facebook platforms as people try to remain socially connected during the crisis. In countries that have been hit hard, messaging usage has jumped more than 50% over the past month, while video calling usage has more than doubled on platforms like Messenger and WhatsApp. Facebook notes that it has never really effectively monetized these types of services anyway, though not for a lack of trying.
"At the same time, our business is being adversely affected like so many others around the world," Facebook execs Alex Schultz and Jay Parikh wrote in a blog post. "We don't monetize many of the services where we're seeing increased engagement, and we've seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19."
Considering how important those services are at a time like this, Facebook is working hard to maintain them to provide stable and reliable communications. That presents particular challenges when employees are working remotely and may not have access to the same types of on-site resources.
The fact that Facebook has invested billions upon billions of dollars in its first-party infrastructure, with a sprawling network of data centers the world over, is a key advantage that the company may have over companies that outsource those functions to third-party cloud providers. Facebook has greater control over its infrastructure and doesn't have to compete with others for capacity.
Facebook's original guidance
That was the extent of detail that the tech company provided to investors with just days left in the first quarter. Facebook is one of those companies that likes to provide its outlook in a convoluted way instead of straightforward forecasts, much to the chagrin of shareholders that would prefer guidance in simpler terms.
On its earnings call in January, CFO Dave Wehner originally said revenue in the first quarter was expected to "decelerate by a low- to mid-single-digit percentage point as compared to our Q4 growth rate." Total revenue in the fourth quarter had grown 25%, and Q1 2019 revenue was $15.1 billion. Loosely translating the underlying math (growth of 20% to 24%) into dollar terms results in an initial forecast of $18.1 billion to $18.7 billion, but Facebook will now likely miss that guidance.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
• DiscoverGold
Recent META News
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/09/2024 10:21:35 PM
- Bain Capital in Talks to Acquire PowerSchool; Blackstone Emerges Victorious in Hipgnosis Bidding War, and More News • IH Market News • 05/09/2024 11:53:19 AM
- Meta Platforms Expands AI Ads, Apple Boosts iPhone Shipments, and More Highlights • IH Market News • 05/08/2024 12:27:48 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/07/2024 10:06:32 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 05/07/2024 08:13:40 PM
- Tellor Tributes Skyrocket 104% in May, Marathon Digital Set to Enter S&P SmallCap 600, and More Crypto News • IH Market News • 05/07/2024 06:48:02 PM
- Form PX14A6G - Notice of exempt solicitation submitted by non-management • Edgar (US Regulatory) • 05/07/2024 03:33:49 PM
- Alphabet CEO’s Billion-Dollar Wealth, Microsoft’s $1.7B Indonesia Investment, and More News • IH Market News • 04/30/2024 11:58:40 AM
- U.S. Futures Climb in Pre-Market Trading Amid Tech Gains and Upcoming Inflation Data • IH Market News • 04/26/2024 11:47:25 AM
- U.S. Stocks Climb Well Off Worst Levels But Close Mostly Lower • IH Market News • 04/25/2024 08:40:00 PM
- Futures Pointing To Sharply Lower Open On Wall Street • IH Market News • 04/25/2024 01:09:21 PM
- U.S. Futures Drop in Pre-Market Trading as Tech Stocks Plunge After Meta Issues Gloomy Forecast • IH Market News • 04/25/2024 11:53:54 AM
- Southwest Shares Tumble 9.6% Post $231 Million 1Q Loss, AstraZeneca Surges on 19% Annual Increase, and More on Earnings • IH Market News • 04/25/2024 11:52:46 AM
- BHP Bids $38.8 Billion for Anglo American; Biden Unveils Historic Micron Technology Deal, and More News • IH Market News • 04/25/2024 11:48:40 AM
- U.S. Stocks Finish Lackluster Session Little Changed • IH Market News • 04/24/2024 08:33:00 PM
- Meta Reports First Quarter 2024 Results • PR Newswire (US) • 04/24/2024 08:05:00 PM
- U.S. Futures Display Mixed Results Amid Earnings, WTI and Brent Crude Prices Dip in June Futures Trading • IH Market News • 04/24/2024 11:31:20 AM
- Stocks Close On Firm Note For 2nd Straight Day On Earnings Hopes • IH Market News • 04/23/2024 09:00:38 PM
- Apple Loses Market Share in China, GM Surges in Pre-Market Following Upward Revisions for 2024 Projections, and More News • IH Market News • 04/23/2024 11:25:34 AM
- Paramount’s Shares Surge Following Sony and Apollo’s Joint Bid; ISS Backs Berkshire Hathaway Director Re-election, and More • IH Market News • 04/19/2024 11:31:22 AM
- Apple to Invest $250 Million in Singapore Expansion, Oracle Commits $8 Billion to Japan Infrastructure, and More News • IH Market News • 04/18/2024 11:11:52 AM
- United Shares Surge 5.3% in Q1 2024 Earnings Beat; Take-Two Cuts 5% of Workforce, and More News • IH Market News • 04/17/2024 10:57:39 AM
- Ericsson Soars with 66% Net Profit Growth; Live Nation Under Antitrust Scrutiny in US, and More News • IH Market News • 04/16/2024 11:18:19 AM
- Meta to temporarily close Threads in Turkey • IH Market News • 04/15/2024 06:49:59 PM
- Samsung Surpasses Apple in Q1 Smartphone Market; Salesforce in Talks to Acquire Informatica, and More News • IH Market News • 04/15/2024 11:06:48 AM
Avant Technologies Equipping AI-Managed Data Center with High Performance Computing Systems • AVAI • May 10, 2024 8:00 AM
VAYK Discloses Strategic Conversation on Potential Acquisition of $4 Million Home Service Business • VAYK • May 9, 2024 9:00 AM
Bantec's Howco Awarded $4.19 Million Dollar U.S. Department of Defense Contract • BANT • May 8, 2024 10:00 AM
Element79 Gold Corp Successfully Closes Maverick Springs Option Agreement • ELEM • May 8, 2024 9:05 AM
Kona Gold Beverages, Inc. Achieves April Revenues Exceeding $586,000 • KGKG • May 8, 2024 8:30 AM
Epazz plans to spin off Galaxy Batteries Inc. • EPAZ • May 8, 2024 7:05 AM