Home ›› 29 Jul 2022 ›› World Biz
Meta Platforms Inc (META.O) issued a gloomy forecast after recording its first ever quarterly drop in revenue on Wednesday, with recession fears and competitive pressures weighing on its digital ads sales.
Shares of the Menlo Park, California-based company were down about 4.6 per cent in extended trading.
The company said it expects third-quarter revenue to fall to $26 billion and $28.5 billion, which would
make it a second year-over-year drop in a row. Analysts were expecting $30.52 billion, according to IBES data from Refinitiv.
Total revenue, which consists almost entirely of ad sales, fell 1 per cent to $28.8 billion in the second quarter ended June 30, from $29.1 billion last year. The figure slightly missed Wall Street’s projections of $28.9 billion, according to Refinitiv.
The company, which operates the world’s largest social media platform, reported mixed results for user growth.
Monthly active users on flagship social network Facebook came in slightly under analyst expectations at 2.93 billion in the second quarter, an increase of 1 per cent year over year, while daily active users handily beat estimates at 1.97 billion.
Like many global companies, Meta is facing some revenue pressure from the strong dollar, as sales in foreign currencies amount to less in dollar terms. Meta said it expected a 6 per cent revenue growth headwind in the third quarter, based on current exchange rates.
Still, the Meta results also suggest that fortunes in online ads sales may be diverging between search and social media players, with the latter impacted more severely as ad buyers reel in spending.
Alphabet Inc (GOOGL.O), the world’s largest digital ad platform, reported a rise in quarterly revenue on Tuesday, with sales from its biggest moneymaker - Google search - topping investor expectations.
Snap Inc (SNAP.N) and Twitter (TWTR.N) both missed sales expectations last week and warned of an ad market slowdown in coming quarters, sparking a broad sell-off across the sector.
