1.4 billion — The number of daily active users, up from 1.37 billion in the third quarter.

DealBook’s take:

Digging deeper, there were several impressive numbers in Facebook’s earnings. Its operating profits as a percentage of revenue, or operating margin, ballooned in the fourth quarter to 57 percent, up from 52 percent in the same period last year. Its average revenue per Facebook user increased at a 28 percent clip in the fourth quarter of 2017, compared with the same period in 2016. That year-on-year growth rate is higher than the 26 percent recorded in the third quarter.

But there were numbers that investors will keep an eye on. Changes Facebook made to its news feed reduced the “time spent on Facebook by roughly 50 million hours every day.” Daily active users in the United States and Canada actually fell to 184 million in the fourth quarter of 2017 from 185 million in the third quarter of last year. But Facebook still managed to generate a huge amount of revenue from the United States and Canada. The region accounted for $6.4 billion of revenue in the fourth quarter of last year, a 40 percent jump from the same period in 2016.

Another figure that might cause concern is the growth in capital expenditures, the money a company spends as it invests in new initiatives. Capex hit $2.26 billion in the fourth quarter of last year, a staggering 78 percent jump from the same period in 2016.

— Peter Eavis



Stocks briefly dipped into the red on hawkish Fed.

The Federal Reserve, as was widely expected, left its benchmark interest rate unchanged in a range between 1.25 percent and 1.5 percent. But the market focused on the change to the Fed’s inflation language.

Today’s statement on inflation:

“Inflation on a 12‑month basis is expected to move up this year and to stabilize around the Committee’s 2 percent objective over the medium term.

The statement from the December meeting:

“Inflation on a 12‑month basis is expected to remain somewhat below 2 percent in the near term but to stabilize around the Committee’s 2 percent objective over the medium term.”

Though the market expected the Fed to raise rates at its March meeting, that language change caused stocks to briefly turn negative. The Standard & Poor’s 500 index, which had traded as high as 2839, slipped to 2817 an hour after the Fed’s statement. It recovered in the final hour of trading to finish up at 2824.

Reactions:

Economists at Bank of America Merrill Lynch wrote that the change to the Fed’s inflation language was “decisive” and a hawkish signal. The bank also noted: “Adding to the conviction of higher inflation, the FOMC noted that market-based measures of inflation compensation have increased in recent months but remain low. This shows that the Fed is taking notice of the recent shift in market perception about inflation.”

Ian Shepherdson, Pantheon Macroeconomics: “In short, the statement sets up the March hike, which will be followed by Jay Powell’s first press conference. We’re expecting continuity of approach, at least for a while.”