Facebook’s profit win sent Meta shares up, but sales posted the slowest growth in a decade

However, the Meta FB stock,
-3.32%
It jumped more than 18% in after-hours trading Wednesday, following the company formerly known as Facebook a statement First-quarter earnings were $7.47 billion, or $2.72 per share, down from $9.5 billion, or $3.30 per share, last year, on sales of $27.9 billion, up 7% from $26.2 billion a year earlier.

Earnings beat average earnings expectations of $2.56 per share, but sales fell short of consensus at $28.3 billion, according to analysts polled by FactSet.

Meta released second-quarter revenue forecasts of $28 billion to $30 billion, while analysts expected $30.7 billion. Facebook executives cited inflation, supply chain issues, the war in Ukraine, European economic headwinds, increased competition from services like TikTok and Apple Inc’s changes. AAPL,
-0.15%
to the mobile operating system, making it difficult for apps to track consumers in ads.

For more: Meta CFO Shouts ‘Wolf’ Again With A Dim Look On Facebook – But He May Be Right This Time

In a white paper released by Apple on Tuesday, Kinchok Jirat, professor of business administration in the marketing department at Columbia Business School, concluded that it would be speculation to shift billions of advertising dollars from companies like Meta to Apple because of Apple’s move.

“This forecast reflects a continuation of trends affecting revenue growth in the first quarter, including the weakening in the back half of the first quarter that coincided with the war in Ukraine,” said Meta Chief Financial Officer David Wehner. statment Announcement of results. “Our guidance assumes that foreign currency will be a headwind of approximately 3% annual growth in the second quarter, based on current exchange rates.”

In his webcast presentation, Zuckerberg acknowledged the influence of TikTok and Apple, but said Meta was confident in the short videos Reels and AI to address each company, respectively. He added that pushing the company into the metaverse would also boost revenue, particularly in advertising.

mixed Results arrive in the wake Less than expected sales and profits From parent company Alphabet Inc GOOGL,
-3.67%

GOOG,
-3.75%
On Tuesday, fears deepened that companies relying on advertising could face a tough spot as war rages in Ukraine and inflation rages in consumers’ pockets. Snap Inc. SNAP,
-5.58%
Warn of “difficult operating environment” when mentioned Last week’s results, although Pinterest Inc. PINS,
-2.86%
Involved It also rose after Wednesday’s earnings.

The number of daily active users, or DAUs, an important measure of Meta growth globally, rose 4% to 1.96 billion, topping analysts’ expectations of 1.95 billion. The rally has largely dampened investors, who have expressed concern about a drop in user engagement on Facebook’s platforms.

“The growth in (DAUs) is a good sign for Facebook, especially as it exited the fourth quarter of 2021 when it saw its first-ever decline in DAUs. It’s also clear that Facebook is still struggling to attract users,” said Evelyn Mitchell, an analyst at Insider Intelligence. Renewed, and it’s getting harder for Instagram to deal with the slump.” Most of the growth is in both [monthly active users] And the DAUs in Q1 came from the rest of the world, not from the US and Canada, which are generating income at a better rate.”

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Meta stock has been among the worst in tech this year, down 48% so far, while the broader S&P 500, SPX, is down 48% so far.
+ 0.21%
It decreased by 12% in 2022.