Meta Stock Q4 outlook eliminates earnings-beat gains.

Thedailycourierng

Meta stock Q4 released its third-quarter earnings report on Wednesday, surpassing both revenue and earnings expectations. Despite this initial success, the company’s conservative fourth-quarter guidance led to a tempered market response.

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During the earnings call, Meta’s CFO Susan Li attributed the softening of the advertising market to recent geopolitical unrest, notably the events in the Middle East and other global conflicts. Li emphasized that it was challenging to pinpoint the precise impact of these events on demand, although historical data suggested a broader market softness during similar conflicts in the past.

While Meta’s shares initially surged by 4% in after-hours trading, they ultimately retracted those gains and fell by over 3% in Thursday’s pre-market session.

Meta has been navigating a complex landscape, focusing on its AI-driven advertising prowess while investing heavily in its expansion into virtual and augmented reality. The company has concentrated on strengthening its AI capabilities and solidifying its position in the digital advertising sector, which has been experiencing a prolonged downturn but is showing signs of recovery.

In the third quarter, Meta’s advertising revenue reached $33.64 billion, outperforming the expected $32.94 billion. The company also exceeded estimates for ad impressions, achieving a 31% year-over-year increase compared to the projected 29.6%.

With Meta’s shares soaring more than 130% year-to-date, the company has significantly outperformed both the S&P 500 and the Nasdaq Internet Index, which have gained around 9% and 34%, respectively, this year.

Despite its promising financial performance, Meta is confronting potential legal challenges. The company faces federal and state lawsuits from 42 attorneys general, who claim that features on Facebook and Instagram targeted at children are addictive.

As of now, Wall Street analysts have issued 60 Buy, 7 Hold, and 2 Sell recommendations for Meta.

Key figures from Meta’s earnings report, in comparison to Bloomberg’s analyst estimates, are as follows:

  • Revenue: $34.15 billion actual, up 23% year-over-year, versus $33.52 billion expected
  • Earnings per share: $4.39 actual, up 168% year-over-year, versus $3.60 expected
  • Facebook daily active users: 2.09 billion actual, versus 2.07 billion expected
  • Reality Labs operating loss: $3.74 billion actual, versus $3.94 billion expected
  • Q4 revenue outlook: $36.5 billion-$40 billion actual, versus $38.76 billion expected

Mark Zuckerberg’s “Year of Efficiency” initiatives appear to be yielding positive results, with the company reducing its 2023 capital expenditure outlook to a range of $27 billion to $29 billion, down from the previously stated $27 billion to $30 billion. Source thedailycourierng news

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