Facebook parent Meta Q3 2022 earnings
Facebook founder and CEO Mark Zuckerberg arrives to testify before the House Financial Services Committee at the Rayburn House Office Building on Capitol Hill on October 23, 2019 in Washington, DC.
Defeat McNamee | Getty Images
Meta Shares continued their 2022 freefall on Wednesday, falling 14% in extended trading, after parent Facebook posted a weak fourth-quarter forecast that fell well short of Wall Street’s revenue expectations.
- Earnings per share (EPS): $1.64 vs. $1.89 expected, according to Refinitiv
- Input: $27.71 billion vs. $27.38 billion expected, according to Refinitiv
- Daily Active Users (DAUs): 1.98 billion expected vs. 1.98 billion according to StreetAccount
- Monthly Active Users (MAUs): 2.94 billion expected vs. 2.96 billion, according to StreetAccount data
- Average Revenue Per User (ARPU): $9.41 vs $9.83 expected according to StreetAccount data
Meta is struggling with a significant slowdown in online advertising spending Apple company iOS privacy update and increasing TikTok competition. Add it up, and Meta posted a fourth income decreases and is expected to post its third decline in the fourth quarter.
The company said revenue for the final three months of the year would be between $30 billion and $32.5 billion. Analysts had expected sales of $32.2 billion.
While revenue fell 4% in the third quarter, Meta’s costs and expenses rose 19% year over year to $22.1 billion. Operating income fell 46% year-on-year to $5.66 billion.
Meta’s operating margin, or profit remaining after accounting for the costs of doing business, fell to 20% from 36% a year ago. Total net income fell 52% to $4.4 billion in the third quarter.
The meta is trading at its lowest level since July 2016, four months before the election. Donald Trump as president.
Revenue at Reality Labs, the unit that houses the company’s virtual reality headsets and its futuristic metaverse business, halved to $285 million from a year earlier. Its losses rose to $3.67 billion from $2.63 billion in the same quarter last year.
Reality Labs has lost $9.4 billion this year alone, with no end in sight.
“We expect Reality Labs’ operating expenses to increase significantly annually through 2023,” Meta said. “After 2023, we expect to accelerate Reality Labs’ investments so that we can achieve our goal of growing the company’s overall operating income over the long term.”
Meta said it would “keep some teams flat in headcount, cut others, and invest headcount growth only in our highest priorities.”
“As a result, we expect headcount at the end of 2023 to be approximately the same as in the third quarter of 2022,” the company said.
Meta said it had 197 million daily active users in the US and Canada during the period, up from 196 million in the same quarter of 2020. The majority of Meta’s revenue comes from users in North America.
Meta report is the last sign of problems in the Internet advertising market, which is influenced by factors. Apple company The 2021 iOS Privacy Update and Fears of the Coming Recession. This concern has forced companies to cut back on marketing and advertising campaigns.
Last week, Snap shares jumped 30% on the day after the company reported Executives attributed this to platform changes and weaker-than-expected earnings.
Investors were also disappointed Of the alphabet The company’s third-quarter earnings report on Wednesday sent the company’s stock price down the biggest since March 2020. YouTube business reported year-over-year sales fell 2%, and Alphabet Chief Financial Officer Ruth Porat said the decline “primarily reflects further declines in advertiser spending.”
Even Microsoft did not happen immunewith the tech giant reporting slow growth rate for the search and news advertising business and the LinkedIn division. Microsoft CFO Amy Hood attributed the slowdown to “reduced customer advertising spending.”
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