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* Facebook's Zuckerberg warns that revenue growth may slow as the company shifts from newsfeed to Stories as the platform's main format
* Zuckerberg: "It will take some time and the growth of our revenues could be slower during this period "as Facebook goes from newsfeed to stories
* Zuckerberg: The effort to move from Facebook to the first news feed first was not as fluid as I hoped. "
* Zuckerberg: Facebook Watch Grows Fast, But" We're Well Behind YouTube "
* According to Zuckerberg, Apple's iMessage has a messaging advantage because it's delivered with the iPhones
* Zuckerberg: in the messaging, our main competitor is by far iMessage "
. In markets that allow more competition between iOS and Android, including in Europe, users prefer Facebook services such as Messenger and WhatsApp
* Zuckerberg: Facebook has "at least a year" before the system of the flat -form is able to prevent abuse "At the level we want"
* Zuckerberg: "I think 2019 will be a new year of important investments"
* Zuckerberg: "I know our costs and our revenues need to be better tailored over time "
* David Wehner, Facebook's CFO: Fourth quarter revenue growth will slow 5% to 25% from third quarter [19659005] ( more to come )
Facebook inc. than expected as the social media giant continues to adjust to the slowdown in growth.
Facebook's profits, however, were higher than badysts' forecasts. Following the results, the company's stock price was active and had recently fallen 1.6% to 143.89 USD after normal trading hours.
For the third quarter, Facebook reported earnings per share of $ 1.76, up from $ 1.59 a year ago, exceeding badysts' expectations. $ 1.46, according to data compiled by FactSet. Facebook's net income reached $ 5.13 billion, up from $ 4.71 billion a year ago. The 9% increase in earnings is the slowest growth rate in quarterly earnings since the second quarter of 2015, according to FactSet.
Revenues jumped 33% to $ 13.73 billion, a slightly lower than expected level of $ 13.77 billion. According to FactSet, the percentage increase was the lowest in six years.
The company's shares first dropped more than 5% after the results, before rebounding, a more positive reaction from investors than in the previous quarter. In July, when the company announced a slowdown in growth with its second quarter results, Facebook's shares had suffered the largest loss ever recorded for a US-listed company, with a loss of nearly $ 120 billion. dollars of its market value.
Prior to the earnings report released on Tuesday, Facebook shares had fallen about 20% so far and about 34% since the last earnings report released in late July. The decline in stock prices is part of a broader trend of investors fleeing giant tech companies such as Google's parent company, Alphabet Inc. and Amazon.com Inc., which posted disappointing sales growth the week before. last.
Prior to the latest quarterly results, many investors were worried that Facebook would not even meet expectations, given the company's disappointing results for the second quarter and the increasing risk of increased regulatory oversight at the end of the year. United States and Europe. Youssef Squali, an badyst at SunTrust Robinson Humphrey, said he was "relieved" by Tuesday's report.
"A year ago, when everything was fine, we thought everything would be fine for a long time," said Squali. , which has a "buy" rating on Facebook shares. "Now we have adapted a little, we have the fear of God in us."
About 1.5 billion people use Facebook every day and 2.3 billion use it every month. The company estimates that more than 2.6 billion people now use Facebook, WhatsApp, Instagram, or Messenger each month, and more than two billion people use one of its apps every day. These figures were roughly in line with expectations.
The main sources of growth in the number of Facebook users are in developing markets, particularly in Asia, where it generates about $ 2.67 per user. Facebook's user base has not increased much in its most lucrative markets, namely the United States, Canada and Europe. Facebook earns $ 27.61 for each user in the United States and Canada and $ 8.82 for its European users.
Many investors are gearing up for Facebook's actions to rock wildly over the next few days, according to data released before the release of the results. The option price predicts a 9.3% change in Facebook shares, which is well above the average movement of 5.5%.
This year marks perhaps the most difficult period in Facebook's history for nearly 15 years. Critics have attacked the company's lax data privacy practices, following Facebook's disclosure of user registrations to a third party, who then sold the information to Cambridge political badyst firm Analytica. Facebook has also been criticized for its inability to enforce its content policies and to allow false information to infect its various applications.
Facebook had already indicated that he had acted too slowly to solve the problems of his platform and had promised to solve it.
the problems led the regulatory and government review, and they reduced Facebook's bottom line, as the company said expect an increase in costs and a reduction in margins in the years to come up. These changes reflect CEO Mark Zuckerberg's promise to sacrifice profitability to strengthen the platform, store video content, and invest in advanced technologies such as artificial intelligence.
Facebook is also preparing for a slowdown in the growth of its advertising business, which collects the bulk of its revenue through ads in the Facebook feed. Facebook warned that growth would slow in the second half, leading to a 35% decline in its price since the end of July. The decline in the share price has begun to affect Facebook's internal morale, which has been shaken by two years of almost unabated criticism of its product and culture, according to current employees and former employees.
In the run-up to Tuesday's results, some advertisers said that it was not viable that prices go up on news feed ads, from as many as more than more users are adopting the Stories feature, which allows users to post text, photo and video montages disappear within 24 hours. According to Credit Suisse, ads in Facebook Stories could cost about half of those of the main news feed.
The turmoil of Facebook has reached its ranks, where at least a dozen senior or highly visible executives have left or announced their departure since the autumn of 2017.
Write to Deepa Seetharaman to Deepa.Seetharaman @ wsj.com
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