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International User Growth to Aid Facebook's (FB) Q3 Earnings
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Facebook is set to report third-quarter 2019 results on Oct 30.
The company’s growing popularity in international markets, particularly Asia, is expected to have expanded its user base in the to-be-reported quarter.
The Zacks Consensus Estimate for Monthly Active Users (MAUs) in Asia stands at 1.025 billion, indicating 11.8% growth from the year-ago quarter’s reported figure.
Moreover, the company’s user base of more than 2.7 billion (including its Family of services — Instagram, WhatsApp and Messenger) presents a large canvas for advertisers and makes the platform highly attractive.
However, privacy issues continued to hurt Facebook’s reputation, which might have negatively impacted advertiser base expansion in the to-be-reported quarter.
Additionally, the company’s security initiatives are expected to have reduced ad-targeting capabilities of advertisers, which is likely to reflect on the top line.
Click here to know how the company’s overall third-quarter performance is likely to be.
Ad Transparency & Video Initiatives to Drive Ad Revenues
Undoubtedly, videos play a big role in strengthening Facebook’s social media dominance. Advertisers prefer video advertisements, as these appear to be the most lucrative medium to attract the audience.
Facebook’s initiatives to improve privacy, transparency and authenticity of ads and remove fake accounts from the platform are expected to have boosted user trust and engagement in the third quarter.
During the quarter, the company rolled out a tool called Off-Facebook Activity in select geographies, including Ireland, South Korea and Spain. The feature enables users to better control their privacy. The tool helps users to see apps and websites that share information related to their activities on Facebook.
In fact, users can opt out of Off-Facebook Activity tracking or selectively stop certain websites from sending browsing activity to Facebook. However, this feature will not delete user information from Facebook servers. The data collected will be anonymized and disconnected from individual user accounts.
Furthermore, the company reportedly discouraged advertisers and celebrities making money from sponsored posts on quick-fix diet products on Instagram. Facebook also clamped down on health content promoting weight loss and cosmetics on the platform.
Further, on Sep 20, Facebook announced that it has suspended tens of thousands of apps under its ongoing App Developer Investigation, which is focused on improper data usage by third-party developers.
The company announced that apps associated with 400 developers were suspended for a variety of reasons, including the inability or failure of response to Facebook’s request for information. The company has suspended apps in testing phase and also banned a few completely.
Moreover, Facebook inked partnerships with independent fact-checking organizations and released advertisements in newspapers, addressing issues of fake news circulation on the platform. The company has recruited 30,000 people and also made huge investments in AI systems to eliminate harmful content.
During the quarter, the company launched a feature that helps users ‘unsend’ any message delivered through Messenger within a 10-minute window, whether it was sent to a single person or a group chat. Notably, Facebook-owned WhatsApp already offers a “delete for everyone” feature.
Also, Facebook launched a tool that will help Android users turn off location tracking. Notably, Apple’s (AAPL - Free Report) iOS already offers tools that help users allow, partially allow or totally disallow tracking.
We believe video and ad transparency initiatives to improve Facebook’s trustworthiness and engagement level among users, thereby attracting advertisers. Notably, the company faces significant competition from Alphabet’s (GOOGL - Free Report) Google division, Twitter and Amazon (AMZN - Free Report) for ad dollars.
The Zacks Consensus Estimate for third-quarter advertising revenues is currently pegged at $17.11 billion, indicating growth of 26.4% from the year-ago quarter’s reported figure.
Q3 Developments
Notably, the Federal Trade Commission charged Facebook with a $5-billion fine for privacy violation in the third quarter.
Further, Facebook users alleged that the company was aware of the access token vulnerability that led to the massive breach of 29 million user accounts in September last year. But the company took measures to protect its employees and left user accounts to fate.
As a result, hackers stole profile information like birth dates, employers, education history, religious preference, types of devices used, pages followed and recent searches and location check-ins from 14 million users. The remaining 15 million users had just their name and contact details stolen, although around 400,000 of them had posts and friends lists exposed.
Moreover, per a Bloomberg report, Facebook used humans to transcribe some conversations between its Messenger users, which has been stopped now. The company said it is a system widely used by technology companies like Apple, Alphabet, Amazon and Microsoft to improve their AI systems.
Further, Facebook said it made sure that conversations were anonymized and user permissions were taken before it acted. Although the company said this affected U.S. users and not those in the EU, Ireland's Data Protection Commission, its lead regulator in the region, is seeking information on the same.
Additionally, Facebook faced heat from the United States Senate over content management. The company has been accused of censoring content and suppressing conservative speech.
Zacks Rank
Facebook currently carries a Zacks Rank #4 (Sell).
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Image: Bigstock
International User Growth to Aid Facebook's (FB) Q3 Earnings
Facebook is set to report third-quarter 2019 results on Oct 30.
The company’s growing popularity in international markets, particularly Asia, is expected to have expanded its user base in the to-be-reported quarter.
The Zacks Consensus Estimate for Monthly Active Users (MAUs) in Asia stands at 1.025 billion, indicating 11.8% growth from the year-ago quarter’s reported figure.
Moreover, the company’s user base of more than 2.7 billion (including its Family of services — Instagram, WhatsApp and Messenger) presents a large canvas for advertisers and makes the platform highly attractive.
However, privacy issues continued to hurt Facebook’s reputation, which might have negatively impacted advertiser base expansion in the to-be-reported quarter.
Facebook, Inc. Revenue (TTM)
Facebook, Inc. revenue-ttm | Facebook, Inc. Quote
Additionally, the company’s security initiatives are expected to have reduced ad-targeting capabilities of advertisers, which is likely to reflect on the top line.
Click here to know how the company’s overall third-quarter performance is likely to be.
Ad Transparency & Video Initiatives to Drive Ad Revenues
Undoubtedly, videos play a big role in strengthening Facebook’s social media dominance. Advertisers prefer video advertisements, as these appear to be the most lucrative medium to attract the audience.
Facebook’s initiatives to improve privacy, transparency and authenticity of ads and remove fake accounts from the platform are expected to have boosted user trust and engagement in the third quarter.
During the quarter, the company rolled out a tool called Off-Facebook Activity in select geographies, including Ireland, South Korea and Spain. The feature enables users to better control their privacy. The tool helps users to see apps and websites that share information related to their activities on Facebook.
In fact, users can opt out of Off-Facebook Activity tracking or selectively stop certain websites from sending browsing activity to Facebook. However, this feature will not delete user information from Facebook servers. The data collected will be anonymized and disconnected from individual user accounts.
Furthermore, the company reportedly discouraged advertisers and celebrities making money from sponsored posts on quick-fix diet products on Instagram. Facebook also clamped down on health content promoting weight loss and cosmetics on the platform.
Further, on Sep 20, Facebook announced that it has suspended tens of thousands of apps under its ongoing App Developer Investigation, which is focused on improper data usage by third-party developers.
The company announced that apps associated with 400 developers were suspended for a variety of reasons, including the inability or failure of response to Facebook’s request for information. The company has suspended apps in testing phase and also banned a few completely.
Moreover, Facebook inked partnerships with independent fact-checking organizations and released advertisements in newspapers, addressing issues of fake news circulation on the platform. The company has recruited 30,000 people and also made huge investments in AI systems to eliminate harmful content.
During the quarter, the company launched a feature that helps users ‘unsend’ any message delivered through Messenger within a 10-minute window, whether it was sent to a single person or a group chat. Notably, Facebook-owned WhatsApp already offers a “delete for everyone” feature.
Also, Facebook launched a tool that will help Android users turn off location tracking. Notably, Apple’s (AAPL - Free Report) iOS already offers tools that help users allow, partially allow or totally disallow tracking.
We believe video and ad transparency initiatives to improve Facebook’s trustworthiness and engagement level among users, thereby attracting advertisers. Notably, the company faces significant competition from Alphabet’s (GOOGL - Free Report) Google division, Twitter and Amazon (AMZN - Free Report) for ad dollars.
The Zacks Consensus Estimate for third-quarter advertising revenues is currently pegged at $17.11 billion, indicating growth of 26.4% from the year-ago quarter’s reported figure.
Q3 Developments
Notably, the Federal Trade Commission charged Facebook with a $5-billion fine for privacy violation in the third quarter.
Further, Facebook users alleged that the company was aware of the access token vulnerability that led to the massive breach of 29 million user accounts in September last year. But the company took measures to protect its employees and left user accounts to fate.
As a result, hackers stole profile information like birth dates, employers, education history, religious preference, types of devices used, pages followed and recent searches and location check-ins from 14 million users. The remaining 15 million users had just their name and contact details stolen, although around 400,000 of them had posts and friends lists exposed.
Moreover, per a Bloomberg report, Facebook used humans to transcribe some conversations between its Messenger users, which has been stopped now. The company said it is a system widely used by technology companies like Apple, Alphabet, Amazon and Microsoft to improve their AI systems.
Further, Facebook said it made sure that conversations were anonymized and user permissions were taken before it acted. Although the company said this affected U.S. users and not those in the EU, Ireland's Data Protection Commission, its lead regulator in the region, is seeking information on the same.
Additionally, Facebook faced heat from the United States Senate over content management. The company has been accused of censoring content and suppressing conservative speech.
Zacks Rank
Facebook currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Breakout Biotech Stocks with Triple-Digit Profit Potential
The biotech sector is projected to surge beyond $775 billion by 2024 as scientists develop treatments for thousands of diseases. They’re also finding ways to edit the human genome to literally erase our vulnerability to these diseases.
Zacks has just released Century of Biology: 7 Biotech Stocks to Buy Right Now to help investors profit from 7 stocks poised for outperformance. Our recent biotech recommendations have produced gains of +98%, +119% and +164% in as little as 1 month. The stocks in this report could perform even better.
See these 7 breakthrough stocks now>>