The stock of Meta Platforms (META) is down 9% after the technology company delivered weak forward guidance and reported declining free cash flow as part of its latest financial results.
The social media company known for Facebook and Instagram announced earnings per share (EPS) of $6.18 U.S., which was below the $7.22 U.S. forecast on Wall Street.
Revenue in the year’s second quarter totaled $60.80 billion U.S., which was slightly ahead of the $60.17 billion U.S. consensus expectation of analysts.
Meta’s Reality Labs unit that is focused on virtual reality technologies lost $4.6 billion U.S. in the year’s second quarter while generating $431 million U.S. in sales for the company.
In terms of guidance, Meta said it expects revenue in the current quarter of $61 billion U.S. to $64 billion U.S., or $62.5 billion U.S. at the midpoint.
That was below the $63.15 billion U.S. that Wall Street had penciled in for the company.
As for capital expenditures, Meta raised its guidance for the year to between $130 billion U.S. and $145 billion U.S., up from a previous range of $125 billion U.S. to $145 billion U.S.
Due to the money being spent on artificial intelligence (A.I.), Meta reported that its free cash flow fell to $784 million U.S. in the latest quarter from $8.55 billion U.S. a year earlier.
Executives at Meta Platforms said second-quarter costs and expenses totaled $42.03 billion U.S., an increase of 55% from the previous year.
Meta recently announced plans to build a $14 billion U.S. A.I. data centre in Texas and a $50 billion U.S. data centre in Louisiana.
Prior to today (July 30), META stock had declined 16% over the last 12 months to trade at $585.61 U.S. per share.
