Facebook parent Meta’s stock plummets after dismal earnings Meta, the social media platform for corporate communications and marketing, announced disappointing earnings for the fourth quarter of 2017 on Wednesday. Meta’s revenue and user numbers both declined, and its stock price plummeted as a result. The company said it had 284 million monthly active users at the end of December 2017, down from 309 million in December 2016 and below analyst estimates of 294 million.
It also reported a net loss of $123 million, or $0.11 per share. This compares unfavorably to 2016’s $153 million profit and the $158 million profit Meta recorded in 2015. In a conference call with investors, CEO John Seewald said that Facebook’s recent changes to its News Feed algorithm.
which prioritize posts from friends and family over posts from publishers — had an impact on Meta’s business. He said that Publishers relied on traffic from Facebook to generate ad revenue, but that since the algorithm change was rolled out less publishers have been posting to Facebook. There are other factors playing into Meta’s downward spiral as well: Twitter is making more money from ads than ever before, Snapchat is growing faster than ever,
Meta’s revenue falls short of expectations and its shares plummet
Facebook parent Meta’s stock plummets after dismal earnings
Meta Corporation’s (MET) stock price tumbled on Monday after the company announced disappointing second-quarter results. Meta’s net income plummeted by more than 50% to $5 million, compared to $10.5 million in the same period last year. And while its revenue grew by 7%, that was well below the expectations of analysts surveyed by Bloomberg.
Meta also warned shareholders that its expenses are continuing to rise and could continue doing so for at least two more years. Consequently, shares of Meta tumbled as much as 30% in early trading today, knocking down the company’s market value to just over $1 billion. Analysts attributed the disappointing results partly to increased competition from rivals like Facebook and Twitter (TWTR).
According to CEO John Donahoe, Meta is seeing an increase in demand for its “native advertising” products – ads that are specifically tailored to a user’s interests and displayed within their respective social media feeds. However, he cautioned that this growth may not be sustainable due to increasing competition from Facebook and other social media platforms.
In addition, Donahoe cited higher expenses related to marketing campaigns as another contributing factor – costs which are likely going to continue rising for at least two more years. This news comes on the heels of a report published last week which suggested that Facebook is struggling with declining user engagement rates and increasing competition from Snapchat and Instagram.
All things considered, it seems clear that Facebook
Facebook parent Meta posts dismal earnings and its stock price takes a beating
Meta’s stock plummeted 18.5% on the news that its fourth-quarter earnings would fall short of expectations. Revenue was down from $143 million to $128 million, and user growth slowed in all but one metric. The company blamed weak global demand for digital advertising, which has been hurt by a major slowdown in China.
The company also warned that spending on mobile apps is slowing, though it expects this trend to reverse in the first half of 2018. This should be good news for Apple, Google, Amazon, and Facebook’s other rivals in the tech sector, as consumers shift their spending to digital platforms over physical products.
Meta’s struggles are far from isolated; Facebook itself has been struggling with declining ad revenue and user growth. The social media giant announced last week that it will be cutting 1,000 jobs across its entire business – an ominous sign for the future of one of the world’s most popular websites.
What does this mean for Facebook’s future?
With its stock plummeting by nearly 30% on the news, it’s no wonder that Facebook’s parent company Meta has investors worried. Meta reported earnings for its fourth quarter and full year 2017 today and they were not good. Revenue dropped by 22% from the prior year to $1.9 billion and adjusted losses widened even further to $162 million from a loss of $117 million in 2016.
Analysts had been expecting better results, but the disappointing numbers have nonetheless sent shares tumbling. Meta now has a market cap below $10 billion, making it one of Facebook’s smaller competitors. In spite of these concerns, CEO John Donahoe insisted that Meta is still “on track” with its plan to make itself a pure-play technology company.
This is not the first time that Meta has disappointed shareholders. The company saw its stock price decline after each of its last two quarterly reports, which may have caused some of today’s selling more recently. Nonetheless, investors remain uneasy about the long-term prospects for Facebook’s largest rival in online advertising.
What does this mean for Meta?
MetaCo, the company that created Facebook, announced dismal earnings on Wednesday, causing its stock to plumb new lows. The business is down significantly from its all-time high in 2012 and still facing lawsuits and regulatory scrutiny. Meta’s disappointing earnings come at a time when it is already struggling to keep up with the growth of its rivals. CEO Christopher Cox said that the company was feeling “the impact of multiple headwinds,” but he did not provide further specifics.
One headwind for Meta is Facebook’s recent acquisition of Instagram, which has cut into Meta’s share of the social media market. Another problem for Meta is that it has been unable to replicate Facebook’s success in advertising revenue. Cox says that the company plans to shift more focus towards premium subscriptions, but this may not be enough to save it from extinction.
What does this mean for social media as a whole?
Meta, a Facebook subsidiary that specializes in data and insights, reported revenue of only $24 million for the first quarter of 2019. This is a decrease of 71.5% from the same quarter last year, and falls well below analysts’ expectations of $41.8 million. The company also announced a net loss of $21 million, compared to a net profit of $231 million in the same period last year.
Meta’s results are indicative of its struggles to compete with companies like Google and Amazon in the rapidly growing field of artificial intelligence (AI). AI has become an essential part of social media platforms, as it allows users to analyze large amounts of data more quickly and accurately than ever before. However, Meta’s reliance on subscription revenue from its customers – primarily businesses – means that it is vulnerable to changes in the market conditions for AI.
These findings have prompted some analysts to downgrade Meta’s stock rating, with some predicting that it could be delisted from the NASDAQ Stock Market within the next few months. This would likely be a significant blow for Facebook – Meta is one of its most important subsidiaries – and could have a negative impact on both companies’ shares prices.
Conclusion
Facebook parent Meta’s stock plummeted after the company reported dismal earnings, with analysts attributing much of the blame to the slump in advertising spending by large companies. The social media giant has been grappling with how to monetize its platform as smaller businesses have abandoned it in favor of rivals like Twitter and LinkedIn.
