Updated from 4:24 p.m. with additional information.

Shares of Facebook (FB - Get Report) were down about 3% to $147.25 in after-hours trading on Wednesday despite reporting an earnings and revenue beat for the 2017 first quarter.

Earnings came in at $1.04 per share, beating consensus estimates of 87 cents per share. Revenue rose by 49% year-over-year to $8.03 billion, also beating the consensus estimate for $7.83 billion. Facebook reported earnings of 77 cents on revenue of $5.38 billion for the same period in 2016.

The big focus for investors, however, is ad revenue, which rose 51% to $7.86 billion, topping expectations for $7.67 billion. Ad revenue growth showed a slight deceleration from the 2016 fourth quarter when it grew by 53%. Mobile ads accounted for 85% of the ad revenue vs. 82% in the period one year ago. Facebook CFO Dave Wehner warned last year that revenue growth would slow "meaningfully" in 2017 due to it maximizing on ad load.

For user engagement, monthly active users (MAUs) rose 17% year-over-year to 1.94 billion, barely missing the 2 billion mark and slightly topping expectations. Facebook now claims 26% of the world as MAUs. By comparison, Twitter (TWTR - Get Report) reported 328 million MAUs in the 2017 first quarter. Daily active users (DAUs) were up 18% to 1.28 billion. TheStreet's technology columnist Eric Jhonsa notes that Facebook needs to maintain engagement figures in order to continue shifting ad dollars from traditional ad sources to itself.

The positive engagement figures are coming in spite of the increasing competition from Snap (SNAP - Get Report) and from Facebook-owned Instagram, which now has 700 million MAUs. The Stories feature that Facebook added to Instagram already boasts 200 million DAUs, topping Snapchat's last reported 161 million DAUs. The similar Status feature that Facebook added to its separate messaging app WhatsApp has 175 million DAUs, also topping Snapchat. Investors can see how Snapchat is holding up to competition when it reports for the first time since going public on May 10.

While the numbers were good, the stock isn't reacting positively because a lot was already priced into the stock, according to Jhonsa. The stock is trading up over 30% YTD and up about 4% in the past week. Some investors are choosing to sell the stock after the nice run-up it had had in 2017, he said.

When the earnings call begins at 5 p.m., talk of ad trends or spending could lead to a sharper move in the stock, Jhonsa noted.

Earlier today Facebook CEO Mark Zuckerberg announced an additional 3,000 jobs to its team of 4,500 that review "millions of reports" each week on videos posted to its website. This is in response to criticism about violent content being left on the platform for too long before being taken down. "Over the last few weeks, we've seen people hurting themselves and others on Facebook -- either live or in video posted later," Zuckerberg wrote. "It's heartbreaking, and I've been reflecting on how we can do better for our community."

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