The parent company of Facebook, Meta, on Wednesday, published quarterly earnings report for the third quarter which ended on September 30th, 2022. The quarterly earnings report states that the multinational social media company suffered a fall in its revenue for the second consecutive quarter in the current financial year.
During the last three months, Meta earned 4.4 billion dollars which are 1.64 dollars per share. Market analysts were expecting 1.90 dollars per share. 4.4 billion dollars earned by the company during the third quarter is almost half of what it earned during the same period in the previous financial year. During the third quarter of the financial year 2021-22, Meta earned 9.19 billion dollars.
The revenue of Meta company fell from 29.01 billion dollars to 27.71 billion dollars during the third quarter. It was a 4 percent decrease in the revenue generation of the company. Analysts had predicted revenue of 27.4 billion dollars during the quarter.
Due to falling revenue and earnings of the company, the share price of Meta Platforms Inc lost 25% share value for stocks listed on NASDAQ. Investors and traders are highly conscious about investing in a social media company that considers itself one of the most successful social media ventures.
Competition from rival social media platforms such as TikTok and other local social media companies had drained advertisement revenue sources of Meta. Meta which owns Facebook, Instagram, and WhatsApp heavily depends upon advertisement and related revenue streams to earn money and expand its businesses. In 2021, more than 97 percent of the revenue of company the company was from advertisements.
Existing investors in the social media company are highly concerned about its recent business decisions of Meta. The company had for the past few months focussed too much on building Metaverse, a virtual, mixed, and augmented reality concept. The concept of Metaverse is very new to the social media world and is currently not creating much revenue for the company like other platforms. Investors have already pointed out issues in investing too many resources and manpower into newer concepts such as Metaverse.
The advertisement market is suffering downslides internationally as high inflation rates and reduced spending by corporations have resulted in a lesser focus on advertisement and promotion.
Along with the market, employees working as part of Meta also fear that the company will begin layoffs on a large scale to reduce spending and expenditure. Such a move by the company to lay off employees will create a crisis in the IT labor market which is already volatile.