Meta Platforms in Decline - Layoffs Begin

Meta Platforms (NASDAQ:META) shares jumped before falling in after-hours trading on Wednesday after the company released its third quarter results, missing analyst profit forecasts.

Meta Platforms shares initially surged as much as 5% before retreating immediately. At the time of writing, shares were down more than 11%. The social media and metaverse company reported earnings per share of $1.64, $0.29 worse than the analyst estimate of $1.93, while revenue for the quarter came in at $27.71 billion versus the consensus estimate of $27.57 billion. Revenue was down 4% year-on-year, with the company noting that unfavorable foreign currency exchange rates impacted the figure this quarter. Costs and expenses were $22.05 billion, up 19% year-over-year, including a $413 million impairment loss on certain operating leases as part of Meta's ongoing efforts to align its office facilities footprint. Family daily active contacts, classified as people who sign up and log in to Facebook, Instagram, Messenger and/or WhatsApp, averaged 2.93 billion in September 2022, up 4% year-over-year. Family monthly active contacts also increased by 4% to 3.71 billion. The headcount at the much-discussed Meta stood at 87,314 as of September 30, up 28% year-on-year. But the company has heeded recent calls to reduce spending and headcount, announcing significant changes across the board to operate more efficiently, including keeping some teams flat, downsizing others and "investing headcount growth only in our highest priorities." As a result, Meta expects headcount at the end of 2023 to be approximately the same as levels in the third quarter of 2022. "While we face short-term revenue challenges, the fundamentals are in place to return to stronger revenue growth. We are approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge as an even stronger company," said Mark Zuckerberg, founder and CEO of Meta. Meta forecasts fourth quarter total revenue to be in the range of $30-32.5 billion, assuming foreign exchange will be a drag on year-over-year revenue growth of approximately 7% in Q4. In addition, Meta said operating losses for the Reality Labs division will "increase significantly year-over-year" in 2023. "After 2023, we expect to accelerate Reality Labs investments such that we can achieve our goal of increasing overall company operating income over the long term," Meta said. Follow Global Economic Developments on Social Media! Click here to follow Ieconomy official Facebook account! Click here to follow Ieconomy official Instagram account! Click here to follow Ieconomy official Twitter account!