Facebook stock price goes down as the company warns of uncertainty

Facebook Inc. (FB) recently announced its financial results for the fourth quarter that easily beat the consensus forecast. However, the company warned of “significant ad-targeting headwinds” in the coming quarters. The warning sent its shares down despite strong quarterly performance.

The Menlo Park, California-based social network giant reported earnings of $11.22 billion, or $3.88 per share for the three months ended Dec. 31, up from $7.35 billion, or $2.56 per share in the comparable period of 2019. Analysts on average were looking for earnings of $3.19 per share.

Revenue for the quarter climbed 33 percent on a year-over-year basis to $28.07 billion, beating the consensus forecast of $26.36 billion. The strong revenue was mainly driven by a surge in the online commerce business during the pandemic.

The CEO of FB – Mark Zuckerberg said in a statement, “We had a strong end to the year as people and businesses continued to use our services during these challenging times.”

Facebook’s monthly active used climbed 12 percent to 2.8 billion in the quarter, beating the analysts’ average estimate of 2.76 billion. Moreover, the company announced that its board has given permission for repurchasing an additional stock worth $25 billion.

Meanwhile, the company notified that Apple’s upcoming privacy changes to iOS could affect its revenue. With the new privacy changes to the iOS 14, apps cannot obtain ads targeting data from iPhone users without their permission.

Speaking on the matter, Zuckerberg said “Apple may say that they’re doing this to help people. But the moves clearly track their competitive interest.” He added that Apple is becoming one of Facebook’s biggest competitors.

Facebook (FB) shares have been trading lower since the company released its quarterly results. The stock has not gained any value so far in 2021. FB share price has slipped about 5.4 percent on a year-to-date basis.

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