‘not much to like here’

Meta Platforms Inc (NASDAQ: FB) reported lower-than-expected earnings for the fiscal fourth quarter on Wednesday. The stock crashed over 20% after-hours as future guidance disappointed shareholders as well.

Key takeaways from Meta’s Q4 results

Meta recorded $10.29 billion in net income ($3.67 per share) versus the year-ago figure of $11.22 billion ($3.88 per share). At $33.67 billion, sales jumped 20% YoY. According to FactSet, experts had forecast $3.85 of EPS on $33.4 billion in sales.

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Formerly known as Facebook Inc, the American multinational had 1.93 billion DAUs and 2.91 billion MAUs in the recent quarter – both below expectations. Meta said inflation and supply constraints weighed on advertisers’ budgets this quarter resulting in weak results.

Advertising continues to be its largest segment, making up about 97% of the total revenue in Q4. Facebook Reality Labs brought in $877 million in quarterly revenue. Apple’s privacy changes also slammed its numbers for Q4, the company added in its earnings press release. Meta was also up against very tough comps this quarter.

MKM analyst reacts to the earnings report

For the current quarter, Meta forecasts $29 billion in sales at the top end of its range. This compares to $30.2 billion that analysts had expected. On CNBC’s “Closing Bell”, MKM Partners’ Rohit Kulkarni said:

Not many things to like here. A lot of negative surprises, in my opinion. The combination of lower monetization and lower engagement puts an air pocket in front of Facebook. So, probably, this remains under pressure for the next three to six months. They need to get out of iOS headwinds.

Earlier on Wednesday, Kevin O’Leary, a.k.a Mr Wonderful, bought shares of Meta Platforms to increase his exposure to the metaverse. The stock is now down more than 25% for the year.