Meta has yet again reported a disappointing earnings report for the second quarter, after failing to meet estimates for the first quarter of this year. Following the consecutive decline, the company’s shares dropped 3.7 percent in Wednesday’s extended trading.
For the second quarter, the company reported earnings per share of $2.46 compared to the expectation of $2.59 per share that analysts had expected, according to Refinitiv. Revenue of $28.82 billion fell below the expectation of $28.94 billion that analysts had expected, according to Refinitiv. Analysts had expected 1.96 billion Daily Active Users (DAUs), according to StreetAccount but Facebook’s parent Meta surpassed the expectation with 1.97 billion Daily Active Users (DAUs) recorded in the quarter.
Monthly Active Users (MAUs) of 2.93 billion was however below the expectation of 2.94 billion that analysts had expected, according to StreetAccount. Average Revenue Per User (ARPU) came in at $9.82, slightly below the expectation of $9.83, according to StreetAccount.
Like its rivals, Apple’s privacy policy update is taking a toll on Meta’s core online ad business. The company’s ability to track users, coupled with the raging economic challenges has taken a toll on the Facebook parent. Since the beginning of this year, the company has seen about half of its value washed away.
Second quarter revenue was down almost 1 percent from the same period a year ago. Meta’s woes seem to just be beginning as the company issued a weak forecast for the third quarter of the year. Meta cited a “continuation of the weak advertising demand environment we experienced throughout the second quarter, which we believe is being driven by broader macroeconomic uncertainty.”
While on a call with analysts, Meta’s boss Mark Zuckerberg said that the company will be reducing its workforce over the course of next year as it prepares for the economic slowdown. “This is a period that demands more intensity and I expect us to get more done with fewer resources,” he said.
For the third quarter, the company expects revenue to come in the range of $26 billion to $28.5 billion. This translates to a decline of 2 percent to 11 percent from the same period a year ago. Analysts on the other hand forecast third-quarter revenue of $30.5 billion, according to Refinitiv.
Rival companies Snap and Twitter have both reported disappointing results and one thing that all these companies share in common is that they are all being affected by a handful of similar factors such as the effects of the Russia-Ukraine war, economic uncertainties, foreign exchange/ strengthening dollar, heightened competition from TikTok, etc.
Amid all these, the company said its headcount grew by 32 percent to 83,553 from a year ago. Meta also expects total expenses in 2022 to be between $85 billion and $88 billion, down from prior estimates of $87 billion to $92 billion.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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