Meta Platforms Q2 Results Miss Street View; Q3 Revenue Outlook Weak
Facebook parent Meta Platforms Inc. (META) Wednesday reported its second-quarter results, with both earnings and revenues missing Wall Street estimates, as the social media giant reported its first revenue decline. The company’s shares slipped over 4% in extended trading session after the company forecast third-quarter sales below Street estimates.
Menlo Park, California-based Meta’s second-quarter profit tanked 36% to $6.69 billion from $10.39 billion last year. On a per share basis, earnings were $2.46 per share, down from $3.61 per share last year. On average, 40 analysts polled by Thomson Reuters estimated earnings of $2.61 per share for the quarter.
Revenues for the quarter dropped 1 percent to $28.82 billion from $29.08 billion last year. Analysts had a consensus revenue estimate of $28.94 billion for the quarter.
The year-over-year drop in quarterly revenues is a rare first for the social media company that has continued to grow over the years despite scrutiny from regulators and several other controversies.
Daily active users were up 3 percent to 1.97 billion on average for June, while monthly active users increased 1 percent to 2.93 billion.
Total advertising revenues slipped to $28.15 billion from $28.58 billion last year. The social media giant, which generated a major chunk of its revenues from advertising, has been impacted by a slowdown in digital advertising industry amid inflation, rising interest rates, and the war in Ukraine.
Looking forward, the company expects third-quarter revenues of $26 billion $28.5 billion. Analysts currently estimate revenues of $30.52 billion.
“This outlook reflects a continuation of the weak advertising demand environment we experienced throughout the second quarter, which we believe is being driven by broader macroeconomic uncertainty. We also anticipate third quarter Reality Labs revenue to be lower than second quarter revenue,” said CFO David Wehner.
Further, Wehner will take on a new role as Meta’s first Chief Strategy Officer, where he will oversee the company’s strategy and corporate development, effective November 1. Susan Li, Meta’s current Vice President of Finance, will be promoted and serve as Meta’s Chief Financial Officer.
META closed Wednesday’s trading at $169.58, up $10.43 or 6.55%, on the Nasdaq. The stock, however, slipped $7.59 or 4.48% in the after-hours trading.
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