Meta Platforms shares lost further ground in after-hours trading in light of a mixed third-quarter earnings report.
The tech giant formerly known as Facebook delivered slightly better-than-expected revenue of $27.7 billion, but it slipped 4% from the year-ago quarter, reflecting a broad pullback by digital advertisers. Wall Street analysts had expected $27.4 billion in revenue.
Earnings per share of $1.64 fell well short of the consensus forecast for $1.90. Facebook delivered something of a bright spot, posting a 3% uptick in daily active users, reaching 1.98 billion in September.
Meta shares fell 7% on the numbers after closing the regular session at $129.82, down almost 6%. They have dropped by more than 60% in 2022 to date, one of the worst performances among a battered set of tech peers.
The expensive pivot away from its legacy social media platforms Facebook, Instagram and WhatsApp and into the universe has drawn increasing scrutiny among investors. Founder and CEO Mark Zuckerberg is expected to address those concerns and detail the company’s efforts in pulling off the transition during a conference call with analysts.
In its earnings release, Meta said it expects fourth-quarter revenue in the range of $30 billion to 32.5 billion, which is below the current consensus among analysts.
“We are making signicant changes across the board to operate more efficiently,” the company said in the earnings release. “We are holding some teams at in terms of headcount, shrinking others and investing headcount growth only in our highest priorities.” Overall head count is due to stay flat in the fourth quarter compared with third-quarter levels.
Operating losses at Reality Labs, the company’s division dedicated to metaverse exploration, will “grow significantly” in 2023 compared with this year, the release warned. Nevertheless, it added, “we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run.”