• Facebook reported its fourth-quarter results on Wednesday.
  • Its earnings and revenue topped Wall Street's expectations, excluding a tax charge related to the recently passed tax law.
  • But the company announced a significant decline in usage of its service and what may be the first-ever drop in daily users in the United States.
  • The declines in usage and US daily users come as the company has sought to address concerns about its service being used to spread propaganda and fake news and about social-media addiction.

Even as it reported standout earnings, Facebook gave investors something to worry about  on Wednesday -- a marked decline in usage of its service. 

The amount of time users are spending on the site declined by a whopping 50 million hours a day, company CEO Mark Zuckerberg said in a statement.

"2017 was a strong year for Facebook, but it was also a hard one," Zuckerberg said. "In 2018, we're focused on making sure Facebook isn't just fun to use, but also good for people's well-being and for society. We're doing this by encouraging meaningful connections between people rather than passive consumption of content."

He continued: "By focusing on meaningful connections, our community and business will be stronger over the long term."

Investors sold Facebook's stock on the news. In recent after-hours trading, the company's shares were off $8.98, or 4.8%, to $177.91.

But the decline in usage wasn't the only bad news for investors. The company also reported what seems to be its first-ever decline in daily-active users in the United States and Canada. That number, which has been plateauing in recent quarters, fell from 185 million to 184 million.

Despite that decline, the company's total daily active users worldwide rose to 1.4 billion from 1.37 billion in the third quarter.

Facebook's Daily Active Users chart released with its fourth-quarter earnings on January 31, 2018.Facebook

And users and usage aside, Facebook's results topped analysts' revenue and earnings expectations. Here's what it reported and how that compared with Wall Street expectations, as gleaned from Bloomberg data:

  • Revenue (actual): $12.78 billion; analysts were looking for $12.55 billion
  • Earnings per share (GAAP): $1.44; analysts were expecting $1.95. However, Facebook's GAAP EPS included 77 cents of taxes related to the new tax law. Without them, its earnings would have been $2.14 a share.
  • Monthly active users: 2.13 billion; that was in-line with expectations
  • Daily active users: 1.40 billion; analysts had projected 1.41 billion

The company's report follows growing scrutiny and criticism of it regarding Russia's alleged use of the social network to spread propaganda to influence the 2016 presidential campaign, the spread of fake news stories through the site, and the rise of reports of social-media addiction. Facebook officials have recently announced steps to address such concerns, but warned that its efforts may cut back on use of its service.

Analysts and investors will be looking for word on how big a financial impact the company expects from such efforts.

This post originally appeared on Business Insider.

Published on: Jan 31, 2018