By Sarah E. Needleman

Facebook is expected to post record revenue (https://www.wsj.com/articles/facebook-fb-4q-earnings-report-2020-11611717463) for the fourth quarter as holiday shopping and increased use during the pandemic are seen by analysts as driving a surge in digital-ad spending.

The social-media giant's earnings report should reflect an increase in advertisers' efforts to reach consumers who have been doing more of their shopping online in response to the health crisis. Analysts forecast Facebook to post revenue of $26.36 billion, according to FactSet, up from $21.08 billion in the final quarter of 2019. Facebook's profit is projected to rise 25% to $9.2 billion, or $3.19 a share.

Facebook's stock has gained less than 2% over the past three months, compared with a roughly 20% gain in the Nasdaq Composite Index.

Last month the Federal Trade Commission and 46 states filed antitrust lawsuits](https://www.wsj.com/articles/facebook-hit-with-antitrust-lawsuit-by-federal-trade-commission-state-attorneys-general-11607543139?mod=articleinline) against Facebook, accusing the company of buying and freezing out small startups to choke competition. The company is also under fire over its decision to [indefinitely ban (https://www.wsj.com/articles/president-trump-to-regain-ability-to-tweet-from-his-personal-twitter-account-11610032898?mod=articleinline) former President Donald Trump from Facebook and Instagram.

On Wednesday, analysts will be looking for signs of Facebook's progress to expand its business beyond advertising in areas such as e-commerce and virtual reality.

Facebook will be the first U.S. social-media company to report earnings for the most recent season. Snap and Twitter, which also deactivated Mr. Trump's accounts, are scheduled to release their quarterly financial reports next month.

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01-27-21 1601ET