Shares of Meta Platforms (META) are down 20% after the parent company of Facebook issued
disappointing third-quarter earnings and offered weak forward guidance.
Meta Platforms announced earnings per share of $1.64 U.S. versus $1.89 U.S. that was
expected, according to Refinitiv data. The company’s revenue came in at $27.71 billion U.S.
compared to $27.38 billion U.S.
The number of Daily Active Users (DAUs) across Meta’s social media sites that also include
Instagram and WhatsApp totaled 1.98 billion, which matched Wall Street expectations. Average
Revenue Per User (ARPU) was $9.41 U.S., which was below the $9.83 U.S. that analysts had
expected.
Meta Platforms said that it is struggling with a slowdown in online advertising, challenges from
Apple’s iOS privacy changes, and increased competition from Chinese social media platform
TikTok.
Looking forward, Meta Platforms said its revenue for the current fourth quarter will be $30 billion
U.S. to $32.5 billion U.S. Analysts were expecting Q4 sales of $32.2 billion U.S.
While revenue fell 4% in the third quarter, Meta’s costs and expenses rose 19% from a year ago
to $22.1 billion U.S. Operating income declined 46% from a year earlier to $5.66 billion U.S.
Revenue in the company’s Reality Labs unit, which houses its virtual reality headsets and its
metaverse business, fell by almost half from a year earlier to $285 million U.S. Reality Labs has
now lost $9.4 billion U.S. this year.
Before today’s steep drop, Meta Platforms’ stock had declined 62% this year to trade at $129.82
U.S. per share. The stock is now trading at its lowest level since 2016.
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