Updated at 5:32 pm EST
Meta Platforms (META) posted weaker-than-expected second quarter earnings late Wednesday, and cautioned that its metaverse division would post deeper net losses over the coming year, as the social media group continues to struggle with its ongoing transition from its Facebook roots.
The Facebook parent said profits for the three months ending in September were pegged at $1.64 per share, down 49% from the same period last year and well shy of the Street consensus forecast of $1.89 per share.
Group revenues, Meta said, fell 4% to $27.71 billion, nearly all of it coming from the new ‘Family of Apps’ division the company created last year, just ahead of analysts’ estimates of a $27.41 billion tally. Ad impressions rose 17%, Meta said, although the average price per ad was down 18%.
Monthly active users across Meta’s ‘Family of Apps’ was tabbed at 2.96 million, up 2% from last year, while daily active users hit a modestly better-than-expected 1.98 billion.
Looking into the final three months of the year, Meta said it sees revenues in the region of $30.0 billion to $32.5 billion, a range that fall under the Street forecast of $32.3 billion.
“Our community continues to grow and I’m pleased with the strong engagement we’re seeing driven by progress on our discovery engine and products like Reels,” said CEO Mark Zuckerberg. “While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth. 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 shares, which have lost nearly two thirds of their value so far this year, were marked 15.6% lower in after-hours trading immediately following the earnings release to indicate an opening bell price of $109.59 each.
Reality Labs, the division that will house the company’s metaverse plans, will see growing operating losses in the coming year, the company said.
Zuckerberg has faced pointed criticism from shareholders linked to his ambitions for Reality Labs and the so-called ‘metaverse’, which has lost more than $16 billion over the past 18 months.
Earlier this month, however, Meta unveiled its signature piece of metaverse hardware, a $1,500 virtual and mixed reality headset called Quest Pro, that he hopes will ultimately help fuse the gap between his lofty ambitions and actual consumer participation.
