Meta Platforms Stock Plunges After Former Facebook Misses Q4 Forecast
Shares in Meta Platforms, the tech giant formerly known as Facebook, plunged in after-hours trading after the company missed Wall Street forecasts for earnings in the fourth quarter.
The stock, which has already been under pressure in recent months, dropped 19% soon after the numbers hit. It gained more than 1% today to finish the regular session at $323 a share, on heavier-than-average trading volume.
The earnings figure of $3.67 on a diluted basis fell short of the consensus estimate of $3.85 and dropped 5% from the same period a year ago. Revenue of $33.67 billion matched the expectation of $33.7 billion.
The average number of people using one of the company’s apps — among them Facebook, Instagram, WhatsApp and Messenger — gained 8% over the year-ago frame to 2.82 billion. Facebook’s daily active user base on its own averaged 1.93 billion in December 2021, an increase of 5%.
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The company formally changed its name from Facebook to Meta late last year, signaling a strategic shift from social media to the metaverse. The change also provided a welcome distraction from intensifying government scrutiny and customer backlash in the wake of whistleblower revelations. In the quarterly report, the company said its ticker symbol on the Nasdaq will change to “META” from “FB” at some point during the first half of 2022.
From a financial standpoint, a structural change enacted with the name change could have an impact on earnings and the company’s value in the eyes of Wall Street. The company now reports results in two business units: Family of Apps, including Facebook, Instagram, Messenger and WhatsApp; and Facebook Reality Labs.
The Reality Labs segment brought in $877 million during the quarter, up from $717 million in the year-ago period. It was the first specific breakout of the company’s emerging business, which it hopes will become the new centerpiece of the company as the decade unfolds.
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