Facebook shares closed lower in the US Wednesday, but could open in the green as investors digest the strong financial results and consider Zuckerberg’s longer-term strategy for the social media platform.
Facebook shares ended the US Wednesday trading session 0.12% lower at $186.89. After-hours activity currently has the Facebook stock over 1% higher.
Facebook reports healthy profits
Facebook’s fourth quarter and 2017 full year financial results showed fourth quarter revenue hit just shy of $13 billion, which was a 47% gain from the same period a year earlier. Full-year revenues, meanwhile, also grew 47%, to total $40.7 billion.
Facebook’s net profits were impressive too. They jumped 20% in the fourth quarter, to $4.3 billion. Across the whole of 2017, meanwhile, profits surged 56% from 2016, to reach $16 billion. That performance meant earnings per share rose 54% to $5.39.
“2017 was a strong year for Facebook in many ways,” said Facebook CEO Mark Zuckerberg on his Facebook feed. “Our community continues to grow with more than 2.1 billion people now using Facebook every month and 1.4 billion people using it daily. Our business grew 47% year-over-year to $40 billion.”
Other user details showed that the number of regular users declined a little, while the pace at which new users are creating Facebook accounts also slowed.
Facebook aims for fun, relevant platform
Facebook’s results also highlighted that the amount of time regular Facebook users are spending on the site has fallen by around 5%, since the social media site changed the way its Facebook feed shows updates, news and ads.
While this may be considered by some as bad news for the business, it’s actually something Facebook was likely expecting. The newsfeed changes aren’t just to limit the amount of fake news appearing on the site, its also part of its longer-term strategy to keep the site fun and useful for its users today and in the future.
“We don't normally share time metrics because they're not the best way of understanding engagement,” Zuckerberg said. “But this [fall in time spent on Facebook] shows how committed we are to making sure the time you spend is valuable.”
“Our focus this year will be making sure our services are not just fun, but also good for us,” Zuckerberg said.