Investing.com - Facebook saw shares fall sharply in pre-market trade on Wednesday, after the social media network provided softer than expected fourth quarter guidance after markets closed on Tuesday and warned that spending will increase dramatically in 2015.
Investors sold off the stock after the company said it expected fourth quarter revenue to grow between 40% and 47% from the same quarter a year earlier, down sharply from revenue growth of 59% in the third quarter. Wall Street was looking for year-over-year revenue growth of 45%.
The social media network projected that costs and expenses will increase between 50% and 70% next year, driven by spending on hiring and investment in new products.
For the third quarter, Facebook said adjusted earnings per share was $0.43, above expectations for earnings of $0.40.
The company’s third quarter revenue totaled $3.20 billion, up 58.4% year-over-year and beating estimates for revenue of $3.12 billion. Its advertising revenue was $2.96 billion, a 64% increase from the same quarter one year ago.
The social media network reported monthly active users rose 14% to 1.35 billion, mobile monthly active users were 1.12 billion and daily active users were 864 million.
"This has been a good quarter with strong results," said Mark Zuckerberg, Facebook founder and CEO. "We continue to focus on serving our community well and continue to invest in connecting the world over the next decade."
Facebook also disclosed WhatsApp had 2013 revenue of $10.2 million, and a loss of $138 million. The mobile messaging service had approximately 600 million monthly active users.
Facebook (NASDAQ:FB) shares tumbled 7.55% ahead of the opening bell to $74.66, from Monday's closing price of $80.77.
Meanwhile, U.S. stock futures pointed to a mildly lower open. The Dow futures indicated a loss of 0.05% at the open, the S&P 500 futures pointed to a drop of 0.15%, while Nasdaq 100 futures shed 0.25%.