Facebook parent Meta misses Q4 Earning estimates

Meta Q4
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Revenue - Meta reported revenue of $33.67 billion in Q4 compared to analysts' expectation of $33.4 billion. The revenue was up by 19.9% year-on-year. Advertising revenue in the quarter was $32.6 billion. The ad impressions delivered in the fourth quarter were up 13% year over year. The company also saw ad prices up 6%.

Segment revenue - Meta’s s Family of Apps  including Instagram, Messenger and WhatsApp saw revenue of $32.79 billion with operating income of $15.89 billion in Q4. Reality Lab, which deals with augmented reality, virtual reality, etc. reported revenue of $877 million, up from $558 million last quarter, with an operating loss of $3.3 billion.

Net Income falls - The net income fell by 8.3% on year to $10.3 billion. The earnings per share (EPS) reported by the company was $3.67 missed the street estimate of $3.84 per share. The EPS was down 5.4% from the year-ago quarter.

User numbers - The Daily Active Users (DAUs) came at 1.93 billion below analysts' expectation of 1.95 billion. Daily Active Users (DAUs) on Facebook were slightly down in the fourth quarter compared to the previous quarter, marking its first quarterly decline in DAUs on record.

Monthly Active Users (MAUs) came at 2.91 billion below analysts' expectation of 2.95 billion. The Average Revenue per User (ARPU) was higher than analysts' expectation of $11.38 and stood at $11.57.

 

Share repurchases – Meta repurchased $19.18 billion and $44.81 billion of our Class A common stock in Q4 and full year 2021, respectively. As of Dec 31, 2021, they had $38.79 billion available and authorized for repurchases.

Future Guidance - Meta estimated revenue in the first quarter between $27 billion and $29 billion, below analysts' expectation of $30.15 billion and converts to 3% to 11% growth YoY. Meta also expects 2022 total expenses to be in the range of $90-95 billion, updated from their prior outlook of $91-97 billion. They expect 2022 capital expenditures, including principal payments on finance leases, to be in the range of $29-34 billion, unchanged from prior estimates. 

Target Price - The 47 analysts offering 12-month price forecasts for Meta Platforms Inc have a median target of $400, with a high estimate of $460 and a low estimate of $250.

Meta Q4 Results Review:

Facebook earnings came in below expectations for the fourth quarter. The projection for Q1 is also below the expectation. The company expects to face a number of headwinds, including increased competition for people's time, a shift in the user engagement to products that generate income at lower rates, various platform, and regulatory changes, the impact of cost inflation and supply chain disruptions on advertiser budgets.

Facebook said that Apple’s App Tracking Transparency feature would decrease the company’s 2022 sales by about $10 billion. The privacy feature disrupts the mechanics of many mobile ads, especially those that confirm whether a purchase or download was made. 

The meta share price is down 20% in the pre-market trading session.

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