Shares of the social media giant rose 15% in extended trading
Author of the article:
Reuters
Nivedita Balu and Elizabeth Culliford
Meta has lost about half of its value since the start of the year. Photo by REUTERS/Dado Ruvic/Illustration/File Photo Meta Platforms Inc shares climbed on Wednesday as Facebook’s quarterly daily active users were above Wall Street estimates, even as Meta recorded its slowest revenue growth in a decade.
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Shares of the social media giant rose 15 per cent in extended trading.
Profit soundly beat Wall Street targets at US$2.72 per share, compared with an analyst consensus of US$2.56, according to IBES data from Refinitiv.
Daily active users, a key metric for advertisers that indicates activity on Facebook, were 1.96 billion, slightly higher that the estimate of 1.95 billion, according to IBES data from Refinitiv. Monthly active users came in at 2.94 billion, missing Wall Street estimates by 30 million.
Meta has lost about half of its value since the start of the year, after a dismal February earnings when it reported a decline in Facebook’s daily active users for the first time and forecast a gloomy quarter, blaming factors including Apple’s privacy changes and increased competition from platforms like ByteDance’s TikTok.
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In its latest results, Meta forecast second-quarter revenue between US$28 billion and US$30 billion. Analysts on average were expecting current-quarter revenue of US$30.63 billion.
More On This Topic Mom-and-pop investors lost over $1 billion during COVID-19 pandemic From punchline to deal in under 2 weeks: The inside story of how Elon Musk won his Twitter prize Churning stocks dealing swift punishment to anyone who dares buy Total revenue, the bulk of which comes from ad sales, rose seven per cent to US$27.91 billion in the first quarter, but missed analysts’ estimates of US$28.20 billion, according to IBES data from Refinitiv.
Net income fell 21 per cent to US$7.47 billion in the first quarter, but beat analysts’ estimates of US$7.15 billion, according to IBES data from Refinitiv.
Meta forecast second-quarter revenue between US$28 billion and US$30 billion, citing factors including the war in Ukraine. Recent earnings reports from Google parent Alphabet Inc and Snap Inc have signalled the impact of the global economic turmoil on digital ads spending.
Meta lowered its expected 2022 total expenses to between US$87 billion and US$92 billion, down from its prior outlook of US$90 billion to US$95 billion.
© Thomson Reuters 2022
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