Facebook shares slipped in after-hours trading on Tuesday after the company warned that the coronavirus has negatively impacted its first quarter results.
In a blog post, Facebook (FB) - Get Facebook, Inc. Class A Report said that the countries hardest-hit by the coronavirus have seen a spike in use of its messaging services, namely Facebook Messenger and WhatsApp. But it also said that its overall business "is being adversely affected like so many others around the world" as the virus spreads.
Facebook shares closed 8.70% higher on Tuesday to $160.98 amid a broader rebound in all the major indexes, but fell slightly in after-hours trading after the revenue warning.
Facebook said that a number of its services have seen a dramatic increase in usage over the past several weeks. Total messaging increased by more than 50% in the last month in hard-hit countries, and Facebook also reported increases in group calling, Instagram and Facebook Live.
However, many of those services aren't well-monetized, and its core ad business has suffered in countries that are taking dramatic actions to stop the virus, Facebook said.
"Much of the increased traffic is happening on our messaging services, but we’ve also seen more people using our feed and stories products to get updates from their family and friends. At the same time, our business is being adversely affected like so many others around the world," wrote VP of analytics Alex Schultz and VP of engineering Jay Parikh in a joint statement. "We don’t monetize many of the services where we’re seeing increased engagement, and we’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19."
Additionally, the company said it's focused on keeping its service stable throughout the crisis, including reducing bit rates for Facebook and Instagram videos and monitoring usage patterns on its apps.