Meta Platforms dives 19% amid profit miss, revenue warnings (updated)
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Meta Platforms (NASDAQ:META) has tumbled 19% after hours following a mixed third-quarter earnings report where the company topped revenue expectations, but missed on profits and warned of near-term sales challenges.
Revenues fell by 4%, better than expected, to land at $27.71B. While that beat expectations, costs and expenses rose 19%, and so operating income fell by 46%, to $5.66B.
Operating margin was nearly halved, at 20% vs. year-ago 36%. And amid a sharply higher effective tax rate, net income fell by more than half, to $4.4B.
"While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth," CEO Mark Zuckerberg said in his typically terse initial earnings comment.
"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," Zuckerberg said.
In operating metrics, Facebook daily active users rose 3% to 1.98B, above an expected 1.86B. Facebook monthly active users rose 2%, to 2.96B (just short of expectations for 2.97B).
As for its "Family of Apps," including Instagram and WhatsApp, family daily active people rose 4% to 2.93B, and family monthly active people rose 4% to 3.71B.
Ad impressions across the family rose 17%, and average price per ad fell 18%.
One stat that raised eyebrows in rival Alphabet's earnings was a relatively heavy increase in headcount year-over-year amid industry talk of hiring slowdowns or potential layoffs; Meta reports that its headcount as of Sept. 30 was 87,314, an increase of 28% from a year ago. Meta says that overall number will be about the same at the end of Q4 2023.
It's guiding to fourth-quarter revenue of $30B-$32.5B, vs. consensus for $32.2B. That assumes foreign currency makes up a 7% headwind to year-over-year growth.
It sees 2022 total expenses at $85B-$87B, vs. a prior outlook for $85B-$88B. And it sees 2022 capital expenditures in the range of $32B-$33B, vs. a prior range of $30B-$34B.
Meta stock (META) fell by double digits after the report, and kept sliding during the company's earnings conference call.
Conference call set to come at 5 p.m. ET.