Shares of Meta Platforms Inc (NASDAQ: META) are down 4.0% in extended trading after the tech behemoth reported its first-ever year-over-year drop in quarterly revenue.
Meta Q2 results snapshot
Earned $6.69 billion versus the year-ago figure of $10.39 billionEPS of $2.46 was significantly below $3.61 in Q2 of 2021Sales went down nearly 1.0% year-over-year to $28.82 billionConsensus was $2.54 of per-share earnings on $28.9 billion in salesDAUs grew 4.0% to 2.88 billion; well ahead of 1.96 billion expectedReality Labs (metaverse focused business) lost $2.80 billion
Meta Q2 results were weak due to supply constraints, increased competition from the likes of TikTok, Apple’s privacy changes, the Ukraine war, inflation, and the slowdown in advertising, as per the management.
Future outlook and expert’s remarks
More alarmingly, Meta forecasts things to get worse in its current financial quarter. For Q3, it expects revenue to fall between $26 billion and $28.5 billion; the top end of the range represents a 1.7% annualised decline.
In comparison, analysts had called for $30.36 billion. Reacting to Meta Q2 results on CNBC’s “Closing Bell: Overtime”, Baker Avenues’ King Lip said:
We like the DAUs number; ad impressions were better-than-expected. Valuations are two standard deviations below average. Given the potential for growth, it’s a very attractive stock. Going forward, Reels will be the catalyst for Meta and we see Reality Labs as quite a bit of catalyst in the future as well.
Meta names a new CFO
Also on Wednesday, Meta said Susan Li (VP of Finance) will replace David Wehner as the CFO as he transitions into a new position of Chief Strategy Officer.
Heading into Meta Q2 results, Wall Street had a consensus “overweight” rating on the stock that’s down over 50% year-to-date.