Facebook Profit Jumps 79% to Dollars 4.7 Billion in Q3

Shares of Facebook fell 2 percent in early trading Thursday, despite its much better-than-expected results Wednesday.

With apparently no influence of the ongoing hearing regarding its role in Russian Federation meddling, Facebook late on Wednesday published its financial results for the quarter that ended on September 30, reporting that its profitability hit $4.7 billion mark and earned $10.3 billion in revenue compared to an estimate of $9.84 billion.

Facebook on Wednesday announced its Q3 2017 earnings and continued its streak of beating estimates.

More than 98 percent of Facebook's revenues comes from advertising.

Mobile advertising revenues continue to be dominant contributor to ad revenues as it represented 88 percent of advertising revenue for the quarter, up from 84 percent previous year.

Daily active users and monthly active users both grew 16 percent year over year. The number of daily active users has also increased in the third-quarter to be around 1.4 billion.

"Facebook's efforts will come in many forms - increasing transparency of political and issue ads, removing problematic content such as false news and hate speech and bulking up review of ad content", added Anmuth.

Alongside video and long-term initiatives in augmented and virtual reality, artificial intelligence, and connectivity, Facebook said "sizable security investments in people and technology to strengthen our systems and prevent abuse" would represent one of the company's major drivers of expense growth in 2018. The company also said it will significantly increase spending on security and expects this to drag down profitability going forward. "Protecting our community is more important that maximizing our profits".

Chief executive Mark Zuckerberg used the update to address criticism of Facebook for allowing disinformation and manipulation during the 2016 United States presidential election, hours after the company's top lawyer faced a grilling at a Washington congressional hearing. He said Facebook will double the security team to 20,000 in the next year (Facebook now has 23,165 employees) and introduce a tool that allows users to see a full archive of advertisements run by any political advertiser.

Even with the expected increased expenses, analysts believe that the security increase will only benefit the company in the long run, but will impact it very shortly. Some firms have raised their price targets, such as Morgan Stanley raising it to $200 from $195 and Jefferies raising it from $215 to $225. Advertisers on Facebook now count over 6 million.