Facebook parent Meta reports third-quarter earnings after the bell Wednesday - CNBC

Meta reports third-quarter net connected Wednesday aft the bell.

Here's what analysts are expecting:

• Earnings: $1.89 per share, according to Refinitiv
• Revenue: $27.38 billion, according to Refinitiv
• Daily Active Users (DAUs): 1.98 billion, according to StreetAccount
• Monthly Active Users (MAUs): 2.96 billion, according to StreetAccount
• Average Revenue per User (ARPU): $9.32, according to StreetAccount

Facebook's genitor is contending with a wide slowdown successful online advertisement spending, challenges from Apple's iOS privateness update and accrued contention from TikTok. Add it up, and Meta is expected to station its 2nd consecutive 4th of declining sales.

Although Meta is investing heavy successful its Reels short-video work to steer users distant from TikTok, the merchandise is successful the aboriginal days of generating gross and isn't arsenic lucrative arsenic Facebook's halfway features, similar Stories and the newsfeed.

Meta is trying to marque Reels much charismatic to advertisers and has announced caller advertisement formats intended to springiness businesses enhanced options for promoting their products done abbreviated videos. The institution besides precocious debuted caller ways for companies to advertise connected Instagram and Messenger, padding its wide advertisement inventory, which could perchance bolster wide sales.

Still, the banal is down astir 60% for the year, much than treble the driblet successful the Nasdaq, and analysts are skeptical of the company's prospects done this twelvemonth and into 2023.

Bank of America precocious downgraded Meta from bargain to neutral and said successful a probe note that "we expect advertiser fund cuts successful aboriginal 2023 to measurement connected sentiment and thrust added uncertainty" pursuing the Apple update and the "Reels transition." The steadfast said it expects 4% maturation successful 2023, beneath Wall Street estimates of 9%, and sees "some downside hazard to our estimates successful a recession."

Investors volition besides beryllium focused connected Meta's idiosyncratic numbers, which person stagnated. Most concerning are the idiosyncratic figures successful the U.S. and Canada, its biggest portion for revenue.  

In the 2nd 4th of 2022, Meta counted 197 cardinal regular progressive users successful those 2 North American countries, down from 198 cardinal successful the aforesaid 4th successful 2020.

Meanwhile, Meta is investing billions of dollars a twelvemonth into the metaverse, the yet-to-be developed integer beingness that radical tin entree with virtual world and augmented world headsets.

Earlier this week, Meta shareholder Brad Gerstner of Altimeter Capital wrote an unfastened letter to Meta, lambasting the institution for employing excessively galore workers and spending excessively overmuch wealth connected the metaverse.

The steadfast recommends that Meta trim its caput number by 20% and trim its metaverse concern to a maximum of $5 cardinal a year. Meta's Reality Labs portion lost much than $10 cardinal successful 2021.

"Meta needs to re-build assurance with investors, employees and the tech assemblage successful bid to attract, inspire, and clasp the champion radical successful the world," Gerstner wrote successful the letter. "In short, Meta needs to get acceptable and focused."

On Tuesday, Alphabet reported weaker-than-expected results and said YouTube advertizing revenue dropped 2% from a twelvemonth earlier to $7.07 cardinal successful the 3rd quarter. Ruth Porat, Alphabet's main fiscal officer, said the diminution "primarily reflects further pullbacks successful advertiser spends."

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