Facebook Q3 2018 earnings

Andrew Harrer | Bloomberg | Getty Images

Mark Zuckerberg, chief executive officer and founder of Facebook 

Facebook fell short when it came to revenue, daily active user and monthly active user estimates in its latest earnings report, despite exceeding analyst expectations on earnings per share.

The company reported its third-quarter earnings after bell on Tuesday:

• 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

Shares were initially down more than 5 percent after the report, before recovering to positive territory.

More than 2.6 billion people use the Facebook family of apps per month, which includes Facebook, WhatsApp, Instagram or Messenger, the company said. It was up 100 million more people from last quarter. More than 2 billion people a day use the apps.

“Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day,” CEO Mark Zuckerberg said in a statement. “We’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well.”

The company said it increased headcount 45 percent and costs went up 53 percent as well.

Last quarter, Facebook advised it expected its revenue growth rates to decline as much as high single-digit percentages during the third and fourth quarter of this year because the company has invested more in its Stories product, which has lower ad rates, and other things like security and compliance with the EU’s GDPR data privacy law.

Facebook was also hit with a security breach last quarter that left more than 30 million user accounts vulnerable to unauthorized control. The issue, which was first reported in late September, exposed names, contact details and other personal information including gender, relationship status and recent locations.

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