Facebook announce Q3 2018 earnings - the situation

Yesterday Facebook reported its third quarter earnings whereby the company managed to beat profit expectations but failed in analysts estimates on revenue and active usage.

Overview of the announcement below:

• Earnings per share (EPS): $1.76 vs $1.47 estimated, per Refinitv
• Revenue: $13.73 billion vs. $13.78 billion estimated, per Refinitiv
• Daily active users (DAUs): 1.49 billion vs. 1.51 billion estimated, according to FactSet and StreetAccount
• Monthly active users (MAUs): 2.27 billion vs. 2.29 billion estimated, according to FactSet and StreetAccount
• Average revenue per user: $6.09 vs. $6.09 estimated, per 2.29 billion, according to Street Account

The share price initially fell by 6% but then recovered in afterhours as investors were overall happy with the company’s performance.

On the call, Zuckerberg said the company plans to invest significantly in the business in 2019 as it focuses on building out new products such as Facebook Watch, Instagram TV and Facebook Marketplace and improving cyber security.

Zuckerberg also spent a large portion of the call discussing the company's progress with "Stories" features that are available across Facebook's apps, including Instagram and Messenger. He said that in the near future people will be using more stories, than feeds, and hence the company needs to start monetize from these features.

This is particularly important also as CFO David Wehner said 2019 total expenses will grow 40 to 50 percent compared to full-year 2018.

How is the chart looking?

From a technical stand point, the price is still trying the breakthrough the 20 Moving average and although it did touch it today, this has not yet materialised.

For those who are long on the stock, we can notice some positives in Volume levels as today we have seen a drastic increase in levels which we have not seen since the price drop in late August.

The oscillators are also looking well positioned for a change in trend.

As we have already mentioned in other articles, we believe that there is not much competition in the social network arena and Facebook, by owning WhatsApp and Instagram is still the number one in the sector.

 

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