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Facebook (FB) to Report Q3 Earnings: What's in the Cards?
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Facebook is set to report third-quarter 2021 results on Oct 25.
For the quarter, Facebook expects year-over-year revenue growth to decelerate significantly on a sequential basis, primarily due to strong comparisons and ad-targeting headwinds as a result of increased regulations and changes made by Apple (AAPL - Free Report) in its latest iOS.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $29.55 billion, indicating an increase of 37.7% from the year-ago quarter’s reported figure.
The consensus mark for third-quarter earnings is pegged at $3.20 per share, having been revised 1.3% upward in the past 30 days, indicating 18.1% growth from the figure reported in the year-ago quarter.
Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 29.60%.
Let’s see how things are shaping up for the upcoming announcement.
Factors to Consider for Q3 Earnings
Usage of Facebook’s services, including Messenger, Instagram and WhatsApp, is expected to have remained strong despite controversies and increasing regulatory headwind in the third-quarter. This is expected to have driven top-line growth in the to-be-reported quarter.
Facebook’s Instagram faced some serious controversy during the quarter following a Wall Street Journal article stating that the photo-sharing app is harmful to a significant percentage of teenagers. The journal cited internal Facebook studies that examined teen usage data over the past three years.
The controversy compelled Facebook to stop the development of Instagram for Kids that was supposed to be designed for children ages 13 and under.
However, the controversy is expected to have little effect on Instagram’s usage in the to-be-reported quarter.
The Zacks Consensus Estimate for third-quarter MAUs worldwide is pegged at 2.923 billion, suggesting 6.7% growth from the figure reported in the year-ago quarter. Moreover, DAUs worldwide is pegged at 1.927 billion, indicating 5.9% growth from the figure reported in the year-ago quarter.
An improved ad-spending environment, as well as accelerated digital shift, is expected to have driven Facebook’s ad revenues in the to-be-reported quarter. The company’s top line is likely to have gained from improving market share, driven by a growing user base and continuing innovation in ad product.
Facebook expects advertising revenue growth to be driven primarily by year-over-year advertising price increases.
However, changes made by Apple and Alphabet’s (GOOGL - Free Report) Google in their mobile operating systems and browser platforms have limited Facebook’s ability to track user-activity trend. Intensifying competition from Google, Snap (SNAP - Free Report) and Twitter for ad-dollars remains a headwind.
These factors are expected to have affected Facebook’s year-over-year advertising revenue growth rate in third-quarter 2021.
The consensus mark for this Zacks Rank #3 (Hold) company’s third-quarter advertising revenues is pegged at $29.05 billion, indicating 37% growth from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Facebook (FB) to Report Q3 Earnings: What's in the Cards?
Facebook is set to report third-quarter 2021 results on Oct 25.
For the quarter, Facebook expects year-over-year revenue growth to decelerate significantly on a sequential basis, primarily due to strong comparisons and ad-targeting headwinds as a result of increased regulations and changes made by Apple (AAPL - Free Report) in its latest iOS.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $29.55 billion, indicating an increase of 37.7% from the year-ago quarter’s reported figure.
The consensus mark for third-quarter earnings is pegged at $3.20 per share, having been revised 1.3% upward in the past 30 days, indicating 18.1% growth from the figure reported in the year-ago quarter.
Facebook, Inc. Price and EPS Surprise
Facebook, Inc. price-eps-surprise | Facebook, Inc. Quote
Notably, the company’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 29.60%.
Let’s see how things are shaping up for the upcoming announcement.
Factors to Consider for Q3 Earnings
Usage of Facebook’s services, including Messenger, Instagram and WhatsApp, is expected to have remained strong despite controversies and increasing regulatory headwind in the third-quarter. This is expected to have driven top-line growth in the to-be-reported quarter.
Facebook’s Instagram faced some serious controversy during the quarter following a Wall Street Journal article stating that the photo-sharing app is harmful to a significant percentage of teenagers. The journal cited internal Facebook studies that examined teen usage data over the past three years.
The controversy compelled Facebook to stop the development of Instagram for Kids that was supposed to be designed for children ages 13 and under.
However, the controversy is expected to have little effect on Instagram’s usage in the to-be-reported quarter.
The Zacks Consensus Estimate for third-quarter MAUs worldwide is pegged at 2.923 billion, suggesting 6.7% growth from the figure reported in the year-ago quarter. Moreover, DAUs worldwide is pegged at 1.927 billion, indicating 5.9% growth from the figure reported in the year-ago quarter.
An improved ad-spending environment, as well as accelerated digital shift, is expected to have driven Facebook’s ad revenues in the to-be-reported quarter. The company’s top line is likely to have gained from improving market share, driven by a growing user base and continuing innovation in ad product.
Facebook expects advertising revenue growth to be driven primarily by year-over-year advertising price increases.
However, changes made by Apple and Alphabet’s (GOOGL - Free Report) Google in their mobile operating systems and browser platforms have limited Facebook’s ability to track user-activity trend. Intensifying competition from Google, Snap (SNAP - Free Report) and Twitter for ad-dollars remains a headwind.
These factors are expected to have affected Facebook’s year-over-year advertising revenue growth rate in third-quarter 2021.
The consensus mark for this Zacks Rank #3 (Hold) company’s third-quarter advertising revenues is pegged at $29.05 billion, indicating 37% growth from the figure reported in the year-ago quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.