Meta Stocks Plunge 22.89% on Weak Earnings Report

Shares of Facebook parent Meta Platforms Inc. sharply sank 22.89% in extended trading on Wednesday after it reported disappointing fourth-quarter earnings.

The California-based tech giant lost 73.95 points to $249.05 per share. It dropped its gain of 1.25% or 4.00 points to $323.00 per share in the regular market session.

In line with this, it now trades 4.59% or 15.54 points lower year-to-date.

Moreover, the slump resulted in a loss of $200.00 billion in its market capitalization. The firm currently stands with a value of $898.51 billion, holding up to 2.78 billion shares outstanding.

Accordingly, Meta reported earnings of $3.67 per share in the fourth quarter, lower than the market consensus of $3.84.

It blamed the weaker-than-expected growth partly on inflation and supply chain issues that have weighed down on advertisers’ budgets.

Then, its Q4 revenue edged up to $33.67 billion, surpassing the expected $33.40 billion.

Subsequently, its Family of Apps edged up to $32.79 billion with an operating income of $15.89 billion.

Then, its Reality Labs segment posted $877.00 million in revenue with an operating loss of $3.30 billion.

However, its daily active users (DAUs) on Facebook, the key indicator of growth trajectory, weakened to 1.93 billion.

The figure roughly lost one million users from the same period of 2020, marking its first quarterly decline in DAUs on record.

At the same time, it also missed the analysts’ forecast of 1.95 billion.

Meta Issues Lower Q1 Guidance

Meta also gave weaker guidance for the current quarter. It forecasted its Q1 revenue to post in between $27.00 billion to $29.00 billion, lower than the market expectation of $30.15 billion.

The business explained that it currently faces a combination of headwinds, including privacy changes to Apple’s iOS and macroeconomic challenges.

This latest earnings call was the first after the company’s name change in late October.

It moves towards the metaverse vision and turns away from its scandal-prone social media empire.

Meta’s whistleblower crisis last year revealed accusations that Facebook executives prioritized growth over users’ safety.

Nevertheless, US lawmakers made gradual progress regarding the issue.

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