Facebook shares tumble 5% on warning of ‘cross currents’ in 2021

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Apple, Tesla and Facebook ready to report record sales in busiest week of earnings


Facebook Inc. shares initially tumbled 5% in extended trading, then quickly rallied, Wednesday after it announced better-than-expected fourth-quarter results, but warned of “significant uncertainty as we manage through a number of cross currents in 2021.”

The social-media giant
FB,
-3.51%

said it earned $11.22 billion, or $3.88 a share, against expectations of $3.19 a share, according to analysts polled by FactSet. Facebook’s revenue catapulted 33% to $28.07 billion, beating estimates of $26.36 billion.

The company’s board of directors also authorized incremental share repurchases of up to an additional $25 billion of Class A common stock.

“We had a strong end to the year as people and businesses continued to use our services during these challenging times,” Chief Executive Mark Zuckerberg said in a statement announcing the results. “I’m excited about our product roadmap for 2021 as we build new and meaningful ways to create economic opportunity, build community and help people just have fun.”

Still, Facebook Chief Financial Officer David Wehner had words of caution: He expects the company to face “more significant ad-targeting headwinds in 2021. This includes the impact of platform changes, notably [Apple Inc.’s
AAPL,
-0.77%

] iOS 14, as well as the evolving regulatory landscape.”

Monthly active users, a key barometer of Facebook’s growth globally, improved 12% to 2.8 billion, compared with expectations of 2.76 billion.

Facebook shares are up 22% over the last year, while the broader S&P 500 index
SPX,
-2.57%

has gained 14.6% the last 12 months.

The quarter comes amid tumult surrounding Facebook, which faces antitrust lawsuits from the Federal Trade Commission and 46 states and criticism over its ouster of former President Donald Trump from the Facebook and Instagram platforms.

Facebook is the first major U.S. social-media company to report earnings for the quarter. Snap Inc.
SNAP,
-8.14%

and Twitter Inc.
TWTR,
-2.98%

— which like Facebook deactivated Trump’s accounts — are scheduled to release their quarterly financial reports next month.



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