(MENAFN- Trend News Agency)
Meta Platforms Inc surprised Wall Street with a profit beat and
Facebook returning to user growth, although Meta forecast a
conservative revenue outlook for the current quarter, Trend reports citing
Reuters .
Its stock rose 19% in after-hours trade on Wednesday.
Meta's profit soundly beat Wall Street targets at $2.72 per
share, compared with an average analyst estimate of $2.56,
according to IBES data from Refinitiv. The earning beats were
tempered by Meta recording its slowest revenue growth in a
decade.
Facebook daily active users (DAU), a key metric for advertisers
that indicates activity on the platform, were 1.96 billion,
slightly higher than 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 report when Facebook's daily
active users declined for the first time and forecast a gloomy
quarter, blaming factors including Apple's (AAPL.O) privacy changes
and increased competition from platforms like ByteDance's TikTok.
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'It's good news that Meta somehow managed to eke out growth in
DAU. It needed to show some sort of turnaround from last quarter's
performance,' Insider Intelligence analyst Debra Williamson
said.
'However, growth in monthly active users is slowing quickly. A
few quarters ago it could count on developing markets to keep the
growth engine going but it's likely that even these high-growth
opportunities are starting to dry up,' she said.
Total revenue, the bulk of which comes from ad sales, rose 7% to
$27.91 billion in the first quarter, but missed analysts' estimates
of $28.20 billion, according to IBES data from Refinitiv.
Net income fell 21% to $7.47 billion in the first quarter, but
beat analysts' estimates of $7.15 billion, according to IBES data
from Refinitiv.
Meta forecast second-quarter revenue between $28 billion and $30
billion. Analysts on average were expecting current-quarter revenue
of $30.63 billion. The company said its outlook reflected factors
including the war in Ukraine. It also said it was monitoring the
potential impact of regulatory moves in Europe.
Recent earnings reports from Google parent Alphabet Inc and Snap
Inc have signaled the impact of the global economic turmoil on
digital ads spending, amid rising inflation and geopolitical
uncertainty.
Meta lowered its expected 2022 total expenses to between $87
billion and $92 billion, down from its prior outlook of $90 billion
to $95 billion.
Meta saw quarterly revenue of $695 million for its Reality Labs
hardware division, which is home to its augmented and virtual
reality efforts. It reported $3 billion in losses from operations
from these metaverse ambitions.
The company has warned it will take billions of dollars and
multiple years to realize its aims around building the metaverse, a
futuristic idea of virtual environments where users can work,
socialize and play.
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