Late Wednesday, Meta Platforms (FB) revealed fourth-quarter earnings that were below expectations, as was the outlook. This was the company's first report after rebranding from Facebook three months ago. The value of Facebook's stock has fallen.
On revenue of $33.67 billion, the business posted adjusted profits of $3.67 per share. According to FactSet, analysts projected Meta to report earnings of $3.85 per share on revenue of $33.7 billion. Revenue increased 20% over the previous quarter, although at the slowest rate in six quarters.
Facebook forecasts revenue in the first quarter to be in the range of $27 billion to $29 billion, representing a 3 percent to -11 percent increase. Wall Street had predicted $30.2 billion in revenue.
During today's stock market after-hours trade, the Facebook stock fell 20.7 percent to 256.50.
Warnings Of Earnings Uncertainties
Meta has already expressed concerns about the earnings report. This includes continuing headwinds from Apple's (AAPL) operating system updates. Users now have more control over their privacy as a result of the adjustments. Advertisers, on the other hand, are finding it more difficult to track ad performance.
Advertising accounts for nearly all of Meta's revenue. After Google parent Alphabet, it's the world's second-largest digital ad platform (GOOGL).
Facebook's transition begins with a new financial reporting structure comprised of two sectors.
The Family of Apps section contains thorough information on Facebook, Instagram, Messenger, WhatsApp, and other applications. Facebook Reality Labs is the other division. That is the company's metaverse division. This category includes technology, software, and content for augmented and virtual reality.
FB Stock: Breaking Out Results Of Units
This will also be the first time that the results of Facebook's augmented- and virtual-reality hardware section are reported separately. Reality Labs was previously cautioned by Facebook that it would not be profitable anytime soon. This is owing to a $10 billion investment in the metaverse.
Family of Apps generated $32.9 billion in revenue, up 16 percent, with $15.9 billion in operating profitability. Reality Labs' revenue increased by 57% to $877 million, despite a $3.3 billion operating deficit.
The number of daily active users on Facebook was 1.93 billion, which was lower than expectations of 1.95 billion. The 2.91 billion monthly active users fell short of the 2.95 billion predicted.
Furthermore, Facebook anticipates costs in the region of $90 billion to $95 billion in 2022, up from its earlier prediction of $91 billion to 97 billion.
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