Shares of Facebook continued to plunge Thursday, wiping more than $100 billion from its market cap in just hours after the company's CFO forecast a significant drop in revenue growth and margins in the coming quarters. "Looking beyond 2018, we anticipate that total expense growth will exceed revenue growth in 2019," said Chief Financial Officer David Wehner on a conference call Wednesday. "Over the next several years, we would anticipate that our operating margins will trend towards the mid-thirties on a percentage basis." Wehner's comments on the conference call came after Facebook said revenues grew less than expected in the second quarter, and its user count missed estimates. The statements accelerated losses in the stock, which was down as much as 24 percent after hours. "\[We see\] substantial legal and regulatory issues, and really structural changes in the business model, that we're going to see evolve over the next couple quarters at the least," said CFRA analyst Scott Kessler. In the first earnings report to cover a full quarter since the Cambridge Analytica scandal broke, the social media network said monthly active users grew 11 percent from a year ago to about 2.23 billion people, though analysts were looking for 2.25 billion. Users in the U.S. remained at 241 million, the same level as at the end of March, while users in Europe fell for the first time. "I think we've hit a point with Facebook where user growth is just going to slow down," said Jason Moser, analyst at Motley Fool, in an interview to Cheddar. Revenues came in at about $13.2 billion for the quarter, also short of estimates. The company has been plagued by criticism over how it handles user data for months, and CEO Mark Zuckerberg has not only issued several rare public apologies but even testified before Congress on the issue. Facebook was also hit with calls to better police the content on its platform, most recently after the company refused to take down a post from right-wing conspiracy theorist Alex Jones, threatening Special Counsel Robert Mueller. Ad sales rose 42 percent during the quarter but were outpaced by a 50 percent increase in costs, driven by added efforts to address those issues. Facebook's stock drop, the biggest on a percent basis ever for the company, erased all the gains it had made since its last earnings report three months ago. The loss in market value was bigger than the entire market cap of IBM, McDonald's, and Nike. The results put pressure on the entire tech landscape, with shares of Amazon, Twitter, Snap, and Google parent Alphabet all falling in sympathy. Quick facts from Facebook's Q2 earnings report: * Earnings per share: $1.74 vs. $1.72 estimate * Revenues: $13.23 vs. $13.36 billion estimate * Monthly active users: 2.23 billion vs. 2.25 billion estimate * Daily active users: 1.47 billion vs. 1.49 billion estimate * Monthly active users in Europe fell for the first time * Mobile ad revenue accounted for 91 percent of all ad revenue * Ad revenue grew by 42 percent, but costs grew by 50 percent For full interview, [click here](https://cheddar.com/videos/facebook-earnings-drop-as-much-as-10-after-slight-revenue-miss)

Share:
More In Technology
Mr. Musk's Wild Ride: My Trip Through the Boring Company's First Tunnel
What started with a joke on Twitter two years ago finally became a reality on Tuesday, as The Boring Company unveiled its first tunnel to the public under the SpaceX headquarters in Hawthorne, Calif. The big reveal of the 1.14-mile-long tunnel reflected both Musk's eccentric nature and the glitz and glam of Los Angeles, living up to the billionaire's promise that the event would be "more than a tunnel opening." Cheddar's Alyssa Julya Smith got a test ride in the first section of tunnel underneath L.A.
Opening Bell: December 19, 2018
Facebook is doing damage control again after a New York Times report claims the company gave big tech companies such as Amazon and Microsoft more access to user data than previously disclosed. Plus, all eyes are on the Federal Reserve today, as the central bank is poised to raise interest rates for the fourth time this year. And Big Sean tells Cheddar what motivates him to give back to his community.
Alfonso Ribeiro's Case Over 'Fortnite' Dance Is About More Than Copyright Laws
Actor Alfonso Ribeiro's case against Epic Games for its use of "the Carlton" dance in "Fortnite" might come down to a jury's sympathy, rather than copyright technicalities, intellectual property lawyer Gaston Kroub told Cheddar on Tuesday. "Could a sympathetic jury decide that these \[artists\] deserve something from 'Fortnite'? That's something that remains to be seen," said Kroub, a partner at Kroub, Silbersher & Kolmykov.
Cheddar Crystal Ball: The Smart Cities of the Future Are Already Here
If you’re looking to make a move in 2019, you could do worse than some of the cities below. Each one is using technology ー IoT, machine learning, data analysis, autonomy, A.I. ー to remake the way its citizens interact with their surroundings. But a smart city is more than just innovative technology, as Mike Barlow and Cornelia Levy-Bencheton, authors of "Smart Cities, Smart Future," told Cheddar. It's about improving lives in concrete, everyday ways.
In Push to Go Cashless, Some Are Being Left Behind
More and more retailers are adopting mobile payment technology, but is all that innovation a good thing? A New York City Council member is proposing a ban on cashless establishments, saying it unfairly targets minority populations. Jason Oxman from the Electronic Transaction Association joined Cheddar to discuss.
Cheddar Awards: Marc Benioff Is 2018's Most Woke
As Cheddar reflects on 2018, we are profiling the most innovative, flamboyant, and often-controversial entrepreneurs and corporate leaders who delivered the year's most memorable moments in business. Of the CEO Class of 2018, who was crowned Biggest Flirt? Class Clown?
Load More