Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Facebook shares dropped 6.3% in extended trading Wednesday.

Arnd Wiegmann/Reuters

Facebook Inc said on Wednesday that growth would continue to slow as its business matured and it reported a surge in quarterly expenses, disappointing Wall Street expectations that the costs of improving privacy would level off.

Shares of the world’s biggest social network dropped 7.2 per cent in extended trading.

Total costs and expenses surged 34 per cent to $12.22 billion in the fourth quarter, more than double the 14 per cent that analysts had forecast and dragging down operating margins to 42 per cent from 46 per cent a year earlier.

Story continues below advertisement

Revenue growth was the slowest-ever at 25 per cent, although it beat analysts’ expectations of a dip to 23 per cent, playing to concerns that Facebook is struggling to restore its pre-2018 momentum.

The pace of expansion will slow further in the first quarter, with a percentage point decline in the low- to mid-single digits, Chief Financial Officer David Wehner said on a call with investors, citing maturing business, and the impact of global privacy regulation and concerns about ad targeting.

“We have experienced some modest impact from these headwinds to date. The majority of the impact lies in front of us,” Wehner said.

Facebook has faced scrutiny over the past three years from regulators and users worldwide over its privacy practices and data breaches. It is also facing heat over how its services have been manipulated and used to spread misinformation.

Still, its shares are up more than 50 per cent over the last year, raising pressure for a strong performance.

“FB stock had made a big run-up in anticipation of the report ...so the room for error was low,” said Daniel Morgan, a portfolio manager at Synovus Trust Co.

Daily active users rose to 1.66 billion in the fourth quarter, ahead of estimates of 1.65 billion, according to IBES data from Refinitiv.

Story continues below advertisement

Ad sales jumped 25 per cent to $20.74 billion in the quarter, above analysts’ average estimate of $20.52 billion, according to IBES data from Refinitiv.

Net income rose to $7.35 billion, or $2.56 per share, in the three months ended Dec. 31, from $6.88 billion, or $2.38 per share, a year earlier. Analysts had expected a profit $2.52 per share, according to IBES data from Refinitiv.

Total revenue rose 24.6 per cent to $21.08 billion, beating estimates of $20.89 billion.

Report an error
Tickers mentioned in this story
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies