After a mostly strong year for social media giant Facebook Inc (NASDAQ:FB), the company is expected to post a massive fourth-quarter earnings report during the afternoon trading session on Wednesday. Shares of Facebook were trading 2% higher during the trading session on Monday.
Facebook which has been one of the top tech stocks during the past couple of years has experienced a growth in their revenue by more than 40% during the middle of 2017 compared to the prior year as the profits of the company rise by more than 70% as early as the second quarter of the company.
During the third quarter, Facebook also posted a better than expected quarterly earnings report. The company posted profits and sales that beat most Wall Street expectations. For the third quarter, Facebook beat earnings estimates of $1.28 per share after it posted $1.59 in earnings per share while its revenue was 47% higher to $10.3 billion beating expectations of $9.84 billion.
However, shares of the company fell during the third quarter earnings after the company announced that its expenses would rise from 45% to as much as 60% this year or at a rate which is faster than its expected sales. According to the Facebook chief financial officer David Wehner, the company’s operating expenses would rise in 2018 as the company increases its spending in security and original content. Wehner also stated that expenditures will go up twice as much as this year.
The company is set to report its fourth-quarter earnings during Wednesday’s afternoon trading session. The company’s mobile ad sales is expected to support a stronger financial report from the company for its fourth fiscal quarter as it increases its efforts in the performance of the site in a number of aspects.
Facebook is expected to deliver a revenue of around $12.55 billion during the fourth quarter representing a rise of 42% during the same period last year while its earnings are expected to come at around $1.94 per share which represents a growth of almost 38%.
Despite expectations of the company posting a slightly more disappointing earnings numbers, investors would be looking at the company’s operating expenses throughout the year as it expects a rise in its operating expenses by as much as 60% this year.
Facebook is also expected to make several announcements regarding the changes it intends to make on its news feed as well as its advertising and mobile applications. A number of new features is also expected to be rolled out on Facebook messaging apps this year.