Facebook Sinks After Revenues Miss and Active User Pace Slows

Shares of Facebook collapsed in after-hours trading on Wednesday after reporting second quarter earnings that missed on revenue and showed user growth slowing down.

Earnings for the quarter at $1.74 was two cents higher than what analysts had expected. Revenue however at $13.23 billion trailed behind the $13.36 billion that was waited for by Wall Street.

More discouraging was that global daily active users reached 1.47 billion while analysts waited for 1.49 billion.

Daily active users in North America was 185 million when 185.4 million was expected. The European figure was 279 million while 279.4 million was expected. The average revenue per user was $5.97 although, two cents higher than the analyst estimate.

Advertising revenue was also a miss at $13.04 billion while $13.16 billion was expected.

The company also warned during the earnings call that revenue growth would be lower than the previous year.

“We continue to focus our product impact on putting privacy first, and that’s going to have some impact on revenue growth,” said CFO David Wehner.

Chief development officer at Mindshare, Marco Rimini is still optimistic and said, “A surprisingly mixed set of results. We believe this is a short term effect of GDPR and some short term negative effects of PR issues. In the mid-term advertisers still believe in Facebook, as do its users.”

Disclaimer: We have no position in Facebook, Inc. Common Stock (NASDAQ: FB) and have not been compensated for this article.