Stock buyback

Facebook (FB) shares rose 1.7% in the post-market on Monday after the company reported Q3 earnings above analysts' forecasts and announced a $50bn buyback of its shares. However, Facebook's report reflected Snap's problems. Facebook is introducing a new financial reporting segment structure.

Facebook (FB) released its financial report for Q3 2021, ended 30 September, on Monday after the close of trading.

Facebook shares, down 4.5% on Friday amid the release of a disappointing report from rival Snap (SNAP), were up 1.26% at the close of trading on Monday, adding 1.7% on the post-market.

Facebook shares are up 20.3% since the start of 2021, but fell 10.6% in the latest quarter.

Key figures from Facebook's report

Earnings per share rose 19% (from last year's figure) to $3.22, but were below the figures for the previous three quarters. Market analysts' forecasts were for $3.19 earnings per share. Total earnings for the quarter rose 17% to $9.2bn, up from $7.8bn.

Revenues rose 35% from a year ago to $29.01 billion, but were down from $29.08 billion in the second quarter and missed Wall Street analysts' average estimate of $29.57 billion.

Facebook's number of daily active users (DAU) was 1.93 billion in Q3, down from 1.91 billion in Q2, in line with estimates.

The number of monthly active users (MAU) rose by 1 million in the quarter to 2.91 billion, below the 2.93 billion expected by analysts. Average revenue per user (ARPU) fell to $10.00 versus $10.12 in Q2 and below analysts' expectations of $10.15.

Revenue decline

The iOS changes have hurt Facebook's ability to customize ad targeting to users, and as a result, "we're not seeing the same level of conversion data," said Sheryl Sandberg, Facebook's chief operating officer. Facebook will retool its targeting and optimization systems to handle less data, she said, but that process will take several years.

Facebook's Q4 2021 outlook

The company expects total sales in the fourth quarter to reach the range of $31.5 billion to $34 billion, below market analysts' forecasts of $34.8 billion.

Also, Facebook said the forecast "reflects the significant uncertainty we will face in the fourth quarter due to Apple's iOS 14 changes as well as macroeconomic and COVID-related factors.

However, Facebook bought back $14.37bn of its Class A common shares in the third quarter.