Facebook Parent Meta Platforms Shares Tank 20% On Q4 Earnings Miss, Weak Outlook

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Shares of Meta Platforms, Inc. (FB), the parent company of Facebook, tanked over 20% in extended trading session on Wednesday after the company's fourth-quarter profit missed Wall Street view. The social networking company also issued a weak revenue outlook for the first quarter.

Menlo Park, California-based Meta's fourth-quarter profit dropped to $10.29 billion or $3.67 per share from $11.22 billion or $3.88 per share last year. On average, 39 analysts polled by Thomson Reuters estimated earnings of $3.84 per share for the quarter.

Revenues for the quarter jumped 20 percent to $33.67 billion from $28.07 billion last year. Analysts had a consensus revenue estimate of $33.41 billion for the quarter.

"We had a solid quarter as people turned to our products to stay connected and businesses continued to use our services to grow," said Mark Zuckerberg, Meta founder and CEO. "I'm encouraged by the progress we made this past year in a number of important growth areas like Reels, commerce, and virtual reality, and we'll continue investing in these and other key priorities in 2022 as we work towards building the metaverse."

Facebook daily active users were up 5 percent to 1.93 billion on average for December, while monthly active users increased 4 percent to 2.91 billion.

For the first quarter, Facebook expects revenues of $27.0 billion to $29.0 billion. Analysts currently estimate revenues of $30.14 billion for the quarter.

The company said it expects its year-over-year growth in the first quarter to be impacted by headwinds to both impression and price growth.

"On the impressions side, we expect continued headwinds from both increased competition for people's time and a shift of engagement within our apps towards video surfaces like Reels, which monetize at lower rates than Feed and Stories. On the pricing side, we expect growth to be negatively impacted by a few factors," the company said in a statement.

FB closed Wednesday's trading at $323.00, up $4.00 or 1.25%, on the Nasdaq. The stock, however, slipped $66.25 or 20.51% in the after-hours trading.

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