Shares of Meta Platforms Inc rose Wednesday as quarterly active Facebook users exceeded Wall Street estimates, just as Meta recorded its smallest revenue growth in a decade.
Shares of the social media platform have risen by 15 percent in expanded trading. Profits sounded against Wall Street targets at $ 2.72 per share, compared to the analyst’s $ 2.56 consensus, according to IBES data from Refinitiv. The daily active Facebook users (DAU), the main metric for advertisers showing activity on the platform, were 1.96 billion, slightly higher than the average of 1.95 billion, according to IBES data from Refinitiv. Monthly active users reached 2.94 billion, short of Wall Street by $ 30 million.
Meta has lost almost half of its value since the beginning of the year, after a disastrous February earnings when it reported a decline in daily Facebook users for the first time and predicted a painful quarter, suspicious factors including changes in Apple’s privacy and growing competition. platforms like ByteDance’sTikTok.
“It is good news that Meta has somehow managed to grow the DAU. It needs to show some sort of change in the performance of the last quarter,” said Insider Intelligence analyst Debra Williamson. “However, the growth of monthly active users is slowing rapidly. In the last few months it could have relied on market development to continue the engine of growth but it is possible that even these high growth opportunities are starting to dry up,” he said.
Revenue, most of it from ad sales, rose 7 percent to $ 27.91 billion in the first half, but analysts missed out on $ 28.20 billion, according to IBES data from Refinitiv. Total revenues fell 21 percent to $ 7.47 billion in the first quarter, but beat analysts at $ 7.15 billion, according to IBES data from Refinitiv.
Meta forecast for second quarter revenue between $ 28 billion and $ 30 billion. Analysts on average expected the current quarterly revenue of $ 30.63 billion. The company said its vision reflects things that include the Ukrainian war. It also said it was looking into the potential impact of regulatory measures in Europe.
Recent profit reports from Google parent Alphabet Inc and Snap Inc have highlighted the impact of global economic turmoil on the use of digital advertising, including inflation and global uncertainty.Meta has reduced its expected cost of 2022 to between $ 87 billion and $ 92 billion, down from its previous $ 90 billion target to $ 95 billion.
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