Meta sees 4% sales dip; Zuckerberg aims to emerge 'stronger'
Washington (US), October 27: Facebook parent company Meta, in the third quarter, was buffeted by a widespread ad-spending downturn, posting a 4 percent year-over-year revenue loss, while missing Wall Street estimates on the bottom line as significant metaverse investments continued to eat into earnings, reported Variety.
The company said its flagship Facebook app had 1.984 billion daily active users on average in Q3, up roughly 16 million from the previous quarter, and TikTok is gaining ground as Meta's core social media business plateaus. According to Variety, Facebook DAUs fell by about 1 million in Q4 2021.
As per Variety, Meta reported total revenue of USD 27.71 billion and net income of USD 4.4 billion for the third quarter, both of which were down 52% year on year and fell short of Wall Street anticipations.
The year-over-year revenue decline was only the corporation's second since going public, following a 1% loss in Q2.
According to Refinitiv data, analysts expected revenue of USD 27.38 billion. Alphabet (parent company of Google and YouTube) and Snap both reported Q3 earnings losses, citing a decline in ad spending during the quarter.
Meta also predicted a revenue loss for the fourth quarter, projecting sales of USD 30 billion to USD 32.5 billion, a 3.5%- 11% decrease from the previous year.
Meta shares fell more than 18% in after-hours trading as a result of the earnings failure and Q4 revenue forecast. The stock is down more than 68% year to date.
"Our community continues to grow and I'm pleased with the strong engagement we're seeing driven by progress on our discovery engine and products like Reels," Meta chief Mark Zuckerberg stated.
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"While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth. We're approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company," he further said.
Meanwhile, Meta has been pouring billions of dollars into its metaverse projects, most recently releasing the high-end Meta Quest Pro headgear (USD 1,500), a path suggested by the social network giant's new moniker.
Variety reports that the company has also revealed that a lower-cost, consumer-focused next-generation Quest will be released in 2023. However, Meta's Reality Labs division, which includes its virtual reality, augmented reality, and wearables businesses is still years away from contributing to the bottom line and has hampered overall financial outcomes.
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-PTC News
