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Could Facebook’s Earnings Report Reveal the Greatest Results in Its History?

Facebook Inc, $FB is set to release its earnings results on Wednesday after the market close. Analysts expect $FB to report an income about $6.4 billion which is $1 billion more than it has ever reported in a quarter previously. The earnings during the fourth-quarter are typically the highest of the year, mainly because of the holidays which usually brings Facebook additional advertising sales. But even so, Facebook is still expected to beat the holiday quarter last year by more than $2 billion.

Facebook’s expected record profits come during a period in which the company has faced non-stop scandals and hurdles. Data leaks, the Cambridge Analytica debacle, court hearings – the list can be made long. Ever since the revelations about the fact that tens of millions of users’ data had been improperly accessed, controversies surrounding the data Facebook collects and the sometimes deadly impact of fake news, among other things, has forced the company to repeatedly apologize and attempt to explain its actions to Congress and the public.

Barron’s analyst Tae Kim expects many of the factors that seem key to drive growth at Facebook — including monetization of Stories and Messenger, as well as stabilizing user engagement on the core Facebook product — to eventually work out.

Deutsche Bank analysts shared their thoughts about major internet companies’ earnings in a Wednesday note, where, of course, Facebook was also mentioned. According to them, the report isn’t likely to provide the information necessary to make shares pop upwards.

“We like Facebook shares for 2019 but do not view fourth-quarter results as a positive catalyst,” wrote analyst Lloyd Walmsley, a Wall Street Analyst at Deutsche Bank that specializes in the Technology sector. He rated $FB with a “Buy” rating and set his target price at $195, ahead of Bloomberg’s average near $186.

Wall Street currently expects Q4 EPS of $2.19 on revenue of $16.4 billion, according to Bloomberg data. During the last eight quarters, $FB has beat EPS estimates 7 times.  

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