Shares of Meta (FB.US), Facebook's parent company plunged more than 20% in premarket after the social media giant posted weaker-than-expected fourth quarter earnings and weak revenue guidance for the current quarter blaming Apple's privacy changes and increased competition from rivals like TikTok.
- Earnings per share: $3.67 vs $3.84 expected. Revenue rose 20% to $33.67 billion vs $33.4 billion expected, according to Refinitiv
- In the upcoming quarter, the company expects revenue to grow only between 3% and 11% due to "headwinds to both impression and price growth" in its advertising business.
- Reality Labs, the division that will house the company's metaverse plans, reported revenues of $877 million, but lost $3.3 billion for the quarter and $10.2 billion for the year.
- User growth slowed last quarter, with daily active users dropping from 1.930 to 1.929 billion. Biggest declines came from Africa and Latin America, a potentially worrying sign given that the social media’s growth has been stagnant in North America and Europe for some time.
Despite slowing user growth, Facebook's Average Revenue per User (ARPU) improved slightly in Q4. Source: The Street/Meta
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Open account Try demo Download mobile app Download mobile app- Advertising revenue grew 20% yoy to $32.6 billion — its slowest growth rate for the year
- Apple’s changes to its operating software give users the preference to allow tracking of their activity online, making it harder for advertisers who rely on data to develop new products and know their market
- Company plans to invest in AI and machine learning tools to help define user preferences and make targeted ads more attractive.
- Meta expects that spending will close in on $100 billion this year with first-quarter revenues likely topping out at $29 billion, compared to the Refinitiv forecast of $30.15 billion.
Meta (FB.US) stock is set to open today's session with a massive bearish price gap. If current sentiment prevails, the next target for sellers is located at $232.00 level which is marked with 61.8% Fibonacci retracement of the upward wave launched in March 2020. Source: xStation5
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