Facebook's Q3 Beats Expectations but Focus on Security Will Impact Future Results

Facebook earnings

Facebook can speak like this: the social network reported its third-quarter revenues today, and things were naturally promising. "Protecting our community is more important than maximizing our profits".

But CEO Mark Zuckerberg sounded a warning note, after a hard few weeks of debate around the role of rogue Russian actors trying to influence the last United States presidential election through Facebook ads and posts.

With apparently no influence of the ongoing hearing regarding its role in Russian Federation meddling, Facebook late on Wednesday published its financial results for the quarter that ended on September 30, reporting that its profitability hit $4.7 billion mark and earned $10.3 billion in revenue compared to an estimate of $9.84 billion.

Chief executive Mark Zuckerberg used the update to reaffirm efforts by Facebook to curb manipulation: "We're serious about preventing abuse on our platforms", he said.

He added by saying, " We're investing so much in security that it will impact our profitability. Analysts surveyed by FactSet had estimated $1.28 a share on revenue of $9.85 billion.

The company reported an EPS of $1.59, up 77 percent year over year, and beating analysts' estimates of $1.28.

Zuckerberg outlined investment priorities that included video content, which he described as the biggest trend at Facebook. Advertisers on Facebook now count over 6 million.

It's worth noting that more than 98 percent of Facebook's revenue comes from advertising, 88 percent of which is from mobile devices.

Revenue for the three months ended Sep 30 was up 47pc on a year earlier to $10.3bn (£7.8bn), thanks to a 49pc increase in advertising revenue. Facebook's advertising policies, however, have been under constant fire over the past few months after the revelation of Russian sponsored ads to induce differences between Americans during the Presidential elections.

Investors, however, it seems did not like the profitability outlook as the stock was down in after-hours trading despite the fantastic earnings report.

"So all told, that gets you to approximately - a little less than 150 million", Stretch said in response to questioning from Democratic Senator Mark Warner.

The hearing was the second in Congress this week in which social media and internet firms have been called to explain how fake news and other disinformation was allowed to spread during the election campaign.

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