Meta stock plunges 11% as quarterly revenue falls for a second straight time

Shares of Facebook-parent Meta dropped sharply on Wednesday after the company reported falling revenue for a second straight quarter, and projected another decline in sales for the final quarter.

The company’s disappointing quarterly results after the closing bell sent shares down 11.5 percent in after-hours trading. 

Meta, a titan in the online advertising world, has been contending with a broader slowdown in ad spending as companies cut costs, as well a rising competition from TikTok and strict new privacy settings from Apple. 

Revenue in the third quarter dropped to $27.71 billion, down 4 percent from a year ago but slightly beating analyst expectations, according to Refinitiv data.

Shares of Facebook-parent Meta dropped sharply on Wednesday after the company reported falling revenue for a second straight quarter

The company forecast fourth-quarter revenue between $30 billion and $32.50 billion, compared with analyst estimates of $32.20 billion.

Net income fell to $4.40 billion, or $1.64 per share, from $9.19 billion, or $3.22 per share, a year earlier.  

‘While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth,’ said Meta founder and CEO Mark Zuckerberg in a statement.

‘We’re approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company.’ 

‘While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth,’ said Meta founder and CEO Mark Zuckerberg

Meta’s share price has dropped nearly two-thirds since the start of the year, wiping roughly $650 billion from the company’s market capitalization.

‘There will be some that say the 62 percent year-to-date drop in Meta’s share price has gone too far, and it’s true the tech giant still holds enormous scale thanks to its billions of active users,’ said Sophie Lund-Yates, Lead Equity Analyst at Hargreaves Lansdown.

‘The issue is the economic moat that separates Facebook and Instagram from its rivals is getting narrower, without a clear path forwards for further successful monetization of its other apps and products, and that could culminate in a very big problem very quickly,’ she added. 

Developing story, more to follow.