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Facebook expects further ‘headwinds’ from Apple privacy changes

Facebook warned that its revenues in the current quarter will be knocked further by Apple’s privacy changes, the latest hurdle for the social media company amid an ongoing public relations crisis sparked by the leak of internal documents.

Facebook said on Monday that revenues for the three months to the end of December would be between $31.5bn-$34bn, citing “continued headwinds” from Apple’s requirement for apps to get explicit permission to track users for ad targeting purposes. Analysts had forecast a jump to $34.8bn, according to S&P Capital IQ.

Revenue rose 35 per cent in the third quarter to $29.01bn, just shy of consensus expectations of $29.5bn. Monthly active users rose 6 per cent year-on-year to 2.91bn, slightly below consensus estimates of 2.98bn.

Facebook’s earnings at a glance

Actual versus estimates

Revenue: $29.01bn vs $29.5bn

Net income: $9.19bn vs $9.16bn

EPS: $3.22 vs $3.17

Ad sales: $28.27bn vs $29.02bn

Monthly active users: 2.91bn vs 2.98bn

Sources for estimates: S&P Capital IQ and Refinitiv

The latest earnings report comes as Facebook battles a torrent of negative press coverage, after numerous journalists accessed thousands of pages of leaked documents from a former-employee-turned-whistleblower.

Together, the documents revealed the company’s struggle to curb misinformation and hate speech on the platform, as well as growth challenges among its younger user demographic.

Facebook also said that from the fourth quarter, it plans to break out results for its Facebook Reality Labs unit, which builds its virtual and augmented reality products, from the rest of the business. It said its recent push to invest in FRL was expected to reduce its 2021 operating profit by approximately $10bn.

The company also announced that it would increase its share buyback programme by $50bn.


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