The stock has lost half its value in a year over growth and revenue concerns.
California, on October 23, 2019.Under pressure lately by twin concerns over user-growth and revenue, Meta eased some of those worries Wednesday with a quarterly earnings report showing better-than-expected results, giving its battered stock a lift.
Meta, the parent of Facebook, Instagram and WhatsApp, brought in $27.9 billion in sales during the first quarter. Profit was $7.4 billion. The sales figure represents a 7% increase from last year but falls short of the estimated $28.2 billion. As for the earnings, they’re a 21% drop from a year ago but not as bad as Wall Street expected. Analysts had predicted $7.2 billion, which would’ve meant a 25% decrease.
Perhaps the most-watched numbers in this report, though, are the ones about user growth. Facebook recorded its first-ever decline in the fourth quarter, sparking worries about the app’s path forward. In the latest three-month period, Facebook’s daily users rose to 1.96 billion, a 4% increase that came out a little ahead of Wall Street’s forecast for 1.95 billion.
Facebook shares had lost more than half their value over the last 12 months, the result of concerns not only about user growth but also about Meta’s ability to contend with changes to Apple’s iOS software that have dented the mobile-ads market. A week ago, Meta investors likely looked at Snap’s quarterly results for clues about what Meta would report a week later. Snap also pleased investors—sending its stock up—but did comment on an overall malaise in the ad market over macroeconomic problems . Meta shares slid almost 10% since Snap’s earnings release on April 20, losses now made up in Wednesday’s rally.
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