Facebook Tumbles After Daily Users Miss, Zuck Warns "Users Spending Less Time" On Site

Amid Capitol Hill hearings, shifts in the news strategy, promoting local content, kicking out Russian spies and banning bitcoin ads, Facebook managed to beat Q4 revenue expectations, with Revenue printing st $12.97BN, above the $12.55BN estimate, however EPS missed, coming in at $1.44, below the $1.95 expected as a result of the impact of tax provision on the company, which increased by $2.27 billion.

What is more concerning is that for the first time in years, facebook’s Daily Active Users missed consensus expectations:

Daily active users missed: at 1.40BN, just shy of the 1.41BN expected, an increase of 14% year-over-year

Monthly active users in line: with expectations at 2.13BN, an increase of 14% year-over-year.

Mobile advertising revenue – Mobile advertising revenue represented approximately 89% of advertising revenue for the fourth quarter of 2017, up from approximately 84% of advertising revenue in the fourth quarter of 2016.

Capital expenditures – Capital expenditures were $2.26 billion and $6.73 billion for the fourth quarter and full year 2017, respectively.

Cash and cash equivalents and marketable securities – Cash and cash equivalents and marketable securities were $41.71 billion at the end of the fourth quarter of 2017.

Headcount – Headcount was 25,105 as of December 31, 2017, an increase of 47% year-over-year.

Facebook was also hit by the Trump tax cut:

On December 22, 2017, the 2017 Tax Cuts and Jobs Act (the Tax Act) was enacted into law and the new legislation contains several key tax provisions that affected us, including a one-time mandatory transition tax on accumulated foreign earnings and a reduction of the corporate income tax rate to 21% effective January 1, 2018, among others. As a result, our provision for income taxes increased by $2.27 billion and our diluted EPS decreased by $0.77 for both the fourth quarter and full year 2017. Since the Tax Act was passed late in the fourth quarter of 2017, and ongoing guidance and accounting interpretation are expected over the next 12 months, we consider the accounting of the transition tax, deferred tax re-measurements, and other items to be provisional due to the forthcoming guidance and our ongoing analysis of final year-end data and tax positions.