Following the company’s poor report of earnings for the third quarter on Wednesday, shares of Meta (META stock –5.59%) Platforms were getting pounded as a difficult advertising environment took a toll on the social media behemoth.
Meta Stock Performance
The mayhem on the stock market gives the impression that Wall Street is losing its patience with Meta (NASDAQ:META) and the corporate strategy it is pursuing. The company’s intentions to significantly increase expenditure on the metaverse and other initiatives in 2023 have plainly disappointed investors, who have expressed their disappointment in a clear and unequivocal manner.
The unsatisfactory performance of the company that is the parent of Facebook, Instagram, and WhatsApp brings the string of poor earnings reports from the tech megacaps to three in a row. These results come on the heels of disappointing showings from both Microsoft (MSFT) and Alphabet (GOOGL) on Tuesday (GOOGL). Both Apple AAPL –1.96% (AAPL) and Amazon (AMZN) will release their quarterly earnings on Thursday afternoon.
For its third fiscal quarter, Meta (NASDAQ:META) reported sales of $27.7 billion. This figure represents a 4% decrease from the same period a year earlier, although it represents an approximately 2% increase when measured in constant currency. According to Meta’s prediction, the company’s sales should fall between between $26 billion and $28.5 billion. The average estimate on Wall Street was $1.90 per share, but Meta only managed to earn $1.64 per share for the quarter.
Mark Zuckerberg, CEO of Facebook, said in a statement that even while the company is experiencing “near-term problems on revenue,” the “fundamentals remain there for a return to greater revenue growth.” We are moving toward the year 2023 with an emphasis on priority and efficiency, both of which will assist us in navigating the circumstances in which we find ourselves and enable us to emerge as an even stronger firm.
The Meta stock (NASDAQ:META) continued to decline throughout the day, reaching its lowest point during the results conference call of the firm, when Meta offered investors very little reassurance about the future. The stock had fallen by 19% as the conference call was drawing to a close, following a decline of 5.6% during the normal session on Wednesday.
This year has been a challenging one for Meta and for the owners of the firm. TikTok and others have emerged as new competitors in this space. There are persistent problems with ad-targeting that are connected to Apple’s heightened attention on privacy regulations for iPhone users, in addition to dismal revenue for Reels, and all of these problems are occurring in the context of a weakening global economy. And most investors still have a pessimistic outlook about the possibilities of the metaverse.
he market’s evaluation of the stock, which has lost around 70 percent of its value since it reached its all-time high in November 2021, will not improve as a result of the results of the third quarter. In addition to this, Zuckerberg did not exhibit any indications that the company would back away from its aggressive investment plans for the Metaverse. In addition, there does not appear to be any indication that the company’s primary advertising business will soon improve.
The sales prediction that Meta has provided for the December quarter is in the range of $30 billion to $32.5 billion. Even at the midpoint of this range, this forecast falls well short of the average estimate made by market analysts, which is $32.4 billion.
In the results news release, the firm stated that it is “making some substantial adjustments” in order to improve its operational efficiency. The company also stated that it will maintain the same head count for some teams in 2023, while at the same time reducing the size of other teams. According to Meta (NASDAQ:META), it anticipates that the head count by the end of 2023 will be somewhat comparable to the levels seen in Q3 2022.
Meta now anticipates that its total expenses for 2022 will fall somewhere in the range of $85 billion to $87 billion, which is a slight adjustment from its previous forecast of $85 billion to $88 billion; the new range takes into account charges totaling $900 million for consolidating office facilities.
Featured Image- Unsplash @ solomin_d
Author Valerie Remorosa 
