Facebook forecast suggests financial growth

Following a tough year, investors and analysts forage for positive results ahead of Facebook's 3Q earnings


Following months of negative news and a 30% stock drop since July, Facebook has been preparing to reveal its 3Q18 earnings this week, with Bloomberg suggesting the social media giant could post an increase in revenue.

According to Bloomberg, Facebook has been forecasted to report a revenue of $13.8bn, a 34% increase on the same period last year. The predicted revenue follows "another quarter of turmoil that included executive departures, a huge privacy breach, threats of regulation and struggles to contain misinformation ahead of key elections in the US".

Facebook has reportedly lost more than $200bn in market value since July and company shares have been trading at their lowest level since May 2017, Bloomberg said. In comparison to its 2Q18 $1.74 earning per share, a Nasdaq report stated that analysts forecast $1.46 in earnings per share for its 3Q earnings.

However, according to analyst estimates compiled by Bloomberg, Facebook's monthly active users have been predicted to total 2.28 billion in the third quarter, an increase from 2.23 billion since July.

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"If Facebook can keep users coming back to its social network, the advertising dollars will likely continue to flow, giving the company room to invest in solutions for its problems," Bloomberg reported.

Macquarie analysts Ben Schacter in a recent note to clients said: "As long as management doesn't surprise with more negative announcements about long-term revenue and expense trends, we think the stock could have a good 4Q."

Facebook will report its 3Q earnings after the market close October 30.

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