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Facebook matches expectations, but stock still tanks after hours

Updated Dec 19th, 2018 8:30PM EST

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The mystery is over: We now know whether or not Facebook is actually making money. In its first-ever earnings report released today, the social networking giant reported a net profit of $0.12 earnings per share on quarterly revenues of $1.18 billion. The earnings report matched Wall Street’s expectations of $0.12 earnings per share and revenues of $1.15 billion. Advertising revenue accounted for $992 million of the company’s total revenues. Facebook’s share price dropped by more than 11% in after-hours trading immediately following the news, dipping below $24.

A major reason for the drop was that Facebook only made money on the quarter after excluding the negative impact of pre-2011 restricted stock unit compensation. Without that adjustment the company would have posted a net loss of $157 million or $0.08 per share. Facebook may also have spooked investors with its large increases in capital expenditures, as the company spent $413 million on CAPEX on the quarter, a year-over-year increase of 213%. What’s more, the company reported a GAAP operating loss of $743 million versus a GAAP operating income of $407 million in Q2 2011, which could make investors concerned about the long-term sustainability of Facebook’s current trajectory.

Brad Reed
Brad Reed Staff Writer

Brad Reed has written about technology for over eight years at and Network World. Prior to that, he wrote freelance stories for political publications such as AlterNet and the American Prospect. He has a Master's Degree in Business and Economics Journalism from Boston University.

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