#Facebook Q4 results soar in prelude to an uncertain 2021

Facebook capped a tumultuous 2020 with soaring earnings in the final quarter, its user base boosted by people staying home and its revenue buoyed by a shift to digital advertising amid the pandemic.

But the company predicted uncertainty for 2021 and said its revenue in the latter half of the year could face significant pressure. Because revenue grew so quickly in the second half of 2020, the social network could have trouble keeping up that pace.

It’s also facing challenges in how it targets advertisements, including Apple’s coming launch of privacy protections that could limit Facebook’s ability to target ads.

“Clearly the pandemic has also continued to help Facebook’s monthly active user growth to remain strong in many regions, including in the U.S. and Canada, where prior to the pandemic, user gains had slowed to a crawl,” said eMarketer analyst Debra Aho Williamson. But she noted that the number of daily users in this region declined, suggesting that people in the U.S. and Canada are moving elsewhere—probably TikTok, which grew quickly in 2020.

Facebook earned $11.22 billion, or $3.88 per share, in the October-December period, well above the $3.19 that analysts expected and up 53% from a year earlier. Revenue grew 22% to $28.07 billion, higher than the $26.36 billion analysts were predicting, according to a poll by FactSet.

Its monthly user base grew 12% to 2.8 billion. Facebook ended 2020 with 58,604 employees, a 30% increase from a year earlier.

While Facebook does not break out how much it makes from Instagram, which it owns, eMarketer estimates that the app accounted for 36% of Facebook’s total advertising revenue and nearly half of its U.S. ad revenue.

Shares of the Menlo Park, California-based company climbed $1.23 to $273.37 in after-hours trading. The stock price rose 33% in 2020.

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