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Posted on 10/26/2022 2:27:52 PM PDT by Eccl 10:2
KEY POINTS Meta reported a second straight quarterly revenue decline and is forecasting another drop in the fourth quarter. The company’s Reality Labs division, which houses its VR headsets, lost over $9 billion in the first three quarters. The stock plunged in extended trading after already losing two-thirds of its value so far this year, In this article
META -19.87 (-15.31%) After Hours
Meta shares continued their 2022 freefall, plunging 14% in extended trading on Wednesday after Facebook’s parent issued a weak forecast for the fourth quarter and came up well short of Wall Street’s expectations for earnings.
Earnings per share (EPS): $1.64 vs $1.89 expected, according to Refinitiv
Revenue: $27.71 billion vs. $27.38 billion expected, according to Refinitiv
Daily Active Users (DAUs): 1.98 billion vs 1.98 billion expected, according to StreetAccount
Monthly Active Users (MAUs): 2.96 billion vs 2.94 billion expected, according to StreetAccount
Average Revenue per User (ARPU): $9.41 vs. $9.83 expected, according to StreetAccount
Meta is contending with a broad slowdown in online ad spending, challenges from Apple’s iOS privacy update and increased competition from TikTok. Add it up, and Meta has posted consecutive quarters of revenue declines and is expected to post its third straight drop in the fourth quarter.
The company said revenue for the last three months of the year will be $30 billion to $32.5 billion. Analysts were expecting 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 declined 46% from the previous year to $5.66 billion.
Meta’s operating margin, or the profits left after accounting for costs to run the business, sank to 20% from 36% a year earlier. Overall net income was down 52% to $4.4 billion in the third quarter.
At its after-hours levels, Meta is trading at its lowest since July 2016, which was four months before the election of Donald Trump as president.
Revenue in the Reality Labs unit, which houses the company’s virtual reality headsets and its futuristic metaverse business, fell by almost half from a year earlier to $285 million. Its loss widened to $3.67 billion from $2.63 in the same quarter last year.
Reality Labs has lost $9.4 billion so far this year, and there’s no end in immediate sight.
“We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year,” Meta said. “Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run.”
Meta said that it is “holding some teams flat in terms of headcount, shrinking others and investing headcount growth only in our highest priorities.”
“As a result, we expect headcount at the end of 2023 will be approximately in-line with third quarter 2022 levels,” the company said.
Meta said that it had 197 million daily active users in the U.S. and Canada in the period, up from 196 million during the same quarter in 2020. Meta derives the bulk of its revenue from users in North America.
Meta’s report is the latest sign of trouble in the online advertising market, which is getting hammered by factors including Apple’s 2021 iOS privacy update and fears of an impending recession. Those concerns have caused companies to slash their marketing and ad campaigns.
Last week, Snap shares cratered 30% a day after the company reported weaker-than-expected revenue, which executives attributed to platform changes and a downtrodden economy.
Investors were also disappointed with Alphabet’s third-quarter earnings report, which led on Wednesday to the biggest slump in the company’s share price since March 2020. The YouTube business reported a 2% year-over-year sales drop, and Alphabet chief financial officer Ruth Porat said the decline “primarily reflects further pullbacks in advertiser spends.”
Even Microsoft wasn’t immune, with the tech giant reporting slowing growth rates for both its search and news advertising business and LinkedIn unit. Microsoft CFO Amy Hood attributed the slowdown to “reductions in customer advertising spend.”
That sucks, eh?
Zuck is going to economize by finding a cheaper barber.
Don’t worry about Zuck ... Facebook and social media is the past ... Zuck’s looking to the future and the Great and Powerful Metaverse. Problem solved! When you have to suddenly change the name of your company (to divert everyone’s attention away from what’s really going on), that’s kind of bad. But there’s always a sucker around left holding the bag. Proud to say I never had a facebook account, let alone facebook stock. Sorry, Zuck. Metaverse! lol
I couldn’t be happier.
Wow. Zucking does eventually boomerang on you. Eh, Zucky?
Mayben Musk will buy it too. Twitbook.
Guy's got the best poker face in the world. I can see him winning the next poker championship bracelet in Vegas.
So nice we posted it twice.
The Kool-Aid is taking effect.
All out Psychopath.
Oh no!
Anyway...
Such a shame.
I wonder if this is Wall Street’s way of saying, “There will be a MAGA landslide Nov 8 and they are coming after Facebook’s Section 230 protection.”
Facebook’s influence on society and the world has not been good. Sure, keeping up with family, etc. but the negative aspects outweigh that. Families were in-touch before the advent of FB.
C’mon zucker…you need to censor more and exhibit more aggressive political bias…the big bucks will come rolling back like a tsunami…
zuck sucks!!!!
52 Week Range
122.53
10/13/2022
353.83
11/22/2021
After hours now at $107.
Less than a year ago zuck was getting $354 for each share.
Looks like a 70% drop in price.
People cannot afford rent, gas or groceries.....but META and Zuckerberg are betting billions they will spend $1500 or more on virtual goggles.
Talk about being out of touch.
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