Social networking giant Facebook Inc. (FB), on Monday reported its third-quarter results, with earnings beating Wall Street estimates, despite revenues falling short of expectations. Following the news, shares gained over 4% in the extended trading session.
Menlo Park, California-based Facebook's third-quarter profit surged to $9.19 billion or $3.22 per share from $7.85 billion or $2.71 per share last year. On average, 39 analysts polled by Thomson Reuters estimated earnings of $3.19 per share for the quarter.
Revenues for the quarter surged 35 percent to $29.01 billion from $21.47 billion last year. Analysts had a consensus revenue estimate of $29.58 billion for the quarter.
"We made good progress this quarter and our community continues to grow," said Mark Zuckerberg, Facebook founder and CEO. "I'm excited about our roadmap, especially around creators, commerce, and helping to build the metaverse."
Daily active users were up 6 percent to 1.93 billion on average for September, while monthly active users also increased 6 percent to 2.91 billion.
Moving ahead, Facebook said it change its reporting structure starting with its fourth quarter results. The company will provide revenue and operating profit for two segments: Family of Apps, which will include Facebook, Instagram, Messenger, WhatsApp and other services; and Facebook Reality Labs, which will include augmented and virtual reality related hardware, software and content.
CFO Dave Wehner said, "We expect our investment in Facebook Reality Labs to reduce our overall operating profit in 2021 by approximately $10 billion. We are committed to bringing this long-term vision to life and we expect to increase our investments for the next several years."
For the fourth quarter, Facebook expects fourth quarter revenues of $31.5 billion to $34 billion. Analysts currently estimate revenues of $34.89 billion for the quarter.
Wehner said its outlook reflects the "continued headwinds from Apple's iOS 14 changes, and macroeconomic and COVID-related factors."
FB closed Monday's trading at $328.69, up $4.08 or 1.26%, on the Nasdaq. The stock further gained $14.06 or 4.28% in the after-hours trading.
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