Facebook sales leap 33% in fourth quarter, fueled by COVID shopping spike
Facebook’s fourth-quarter sales jumped 33%, with online shopping during the pandemic fueling demand for digital ads on its social networks. Still, the company warned of “significant uncertainty” in 2021, and said it may not be able to grow as quickly in the second half, sending shares lower in late trading.
Quarterly revenue was $28.1 billion, the Menlo Park, California-based company said Wednesday in a statement. That compared with the $26.4 billion average analyst estimate in a Bloomberg survey. Facebook now has 2.8 billion monthly users, beating the average prediction of 2.76 billion, as more people spend time on their phones while unable to gather or travel during Covid-19-related shutdowns.
As the pandemic continues to make in-person contact risky, people are relying on Facebook to remain connected with friends and family. Small businesses that haven’t previously used the internet to reach customers have increasingly turned to Facebook, Instagram and WhatsApp—now with a combined audience of 3.3 billion—to get their messages out. Those trends have boosted Facebook’s revenue and profit even against the backdrop of constant regulatory scrutiny and criticism over the social network’s policies on privacy, free speech and offensive content.
“We see the company as one of the key beneficiaries of the offline-to-online digital ad shift,” said Shyam Patil, an analyst at Susquehanna International Group, in a note to investors.
Facebook posted fourth-quarter net income of $11.2 billion, or $3.88 a share, compared with the $3.22-per-share analyst estimate.
The stock slipped about 2% in extended trading, after falling 3.5% in New York to close at $272.14. Shares have gained more than 26% in the past year.