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Meta's quarterly profit more than halved to $4.4 billion
The social networking giant, which faces stagnating user numbers and cuts in advertising budgets, also said revenue slipped to $27.7 billion from $29 billion a year earlier.
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Facebook CEO Mark Zuckerberg speaks at Facebook Inc's annual F8 developers conference in San Jose, California, U.S. May 1, 2018. (REUTERS/Stephen Lam)
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acebook-parent Meta reported Wednesday that its profit more than halved to $4.4 billion in the third quarter from $9.2 billion a year earlier, and said it plans "significant changes" to bolster efficiency in a tough economic environment.
The social networking giant, which faces stagnating user numbers and cuts in advertising budgets, also said revenue slipped to $27.7 billion from $29 billion a year earlier.
"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," Meta chief Mark Zuckerberg said in an earnings release.
Meta also forecast a weak holiday quarter and significantly more costs next year, sending shares down nearly 20 percent as investors voiced skepticism about the company's pricey metaverse bets.
The forecast knocked about $67 billion off Meta's stock market value in extended trade, adding to the more than half a trillion dollars in value already lost this year.
If Meta's after-hours stock rout is matched in Thursday's trading session, it will have been its deepest one-day loss since Feb. 2, when the company last issued a dismal forecast.
The disappointing outlook comes as Meta is contending with slowing global economic growth, competition from TikTok, privacy changes from Apple, concerns about massive spending on the metaverse and the ever-present threat of regulation.
Executives announced plans to consolidate offices and said Meta would keep headcount flat through the end of 2023.
Revenue fell 4 percent in the third quarter ended Sept. 30. That deepened a revenue decline begun the previous quarter, when the company posted a first-ever revenue drop of 0.9 percent, although it was less steep than the 5.6 percent decline Wall Street had expected, according to IBES data from Refinitiv.
More troubling was the company's estimate that fourth-quarter revenue would be in the range of $30 billion to $32.5 billion, mostly under analysts' estimates of $32.2 billion, according to the Refinitiv data.
Meta also forecast that its full-year 2023 total expenses would be $96 billion to $101 billion, significantly higher than a revised estimate for 2022 total expenses of $85 billion to $87 billion.
That includes an estimated $2.9 billion in charges over the course of both 2022 and 2023 from the office downsizing.
It also forecast that operating losses associated with the Reality Labs unit responsible for its metaverse investments would grow in 2023 and pledged to "pace" investments after that.
Total costs for the third quarter came in above estimates at $22.1 billion, compared with $18.6 billion the year prior.
