Facebook's Meta faces bleak holiday quarter, shares dive - Reuters

Oct 26 (Reuters) - Facebook genitor Meta Platforms Inc (META.O) connected Wednesday forecast a anemic vacation 4th and importantly much losses from Metaverse investments adjacent year, sending shares down 14%.

The forecast knocked astir $40 cardinal disconnected its banal marketplace worth successful extended trade. On apical of the disappointing outlook, Meta is contending with slowing planetary economical growth, contention from TikTok, concerns astir monolithic spending connected the Metaverse and the ever-present menace of regulation.

Meta expects successful 2023 to employment astir the aforesaid fig of employees arsenic it did astatine the extremity of September.

The genitor institution of Facebook and Instagram bushed estimates for quarterly revenue, which fell 4% to $27.7 cardinal successful the 3rd 4th ended Sept. 30, from $29 cardinal past year.

That deepened a gross diminution begun the erstwhile quarter, erstwhile the institution posted a first-ever gross driblet of 0.9%, but was little steep than the 5.6% diminution Wall Street had expected, according to IBES information from Refinitiv.

It besides posted idiosyncratic maturation figures astir successful enactment with expectations, including a year-over-year summation of monthly progressive users connected flagship app Facebook.

CEO Mark Zuckerberg said its TikTok-like short-video merchandise called Reels present numbers much than 140 cardinal plays crossed Facebook and Instagram, up 50% from six months ago.

Reels' gross tally rates crossed Facebook and Instagram are present $3 billion. He believes Reels is gaining against rival TikTok with Reels being reshared much than 1 cardinal times a day.

More troubling was the company's estimation that fourth-quarter gross would beryllium successful the scope of $30 cardinal to $32.5 billion, nether analysts' estimates of $32.2 billion, according to the Refinitiv data.

Meta besides forecast that its full-year 2023 full expenses would beryllium successful the scope of $96 cardinal to $101 billion, up from a revised estimation for 2022 full expenses of $85 cardinal to $87 billion.

That includes an estimated $2.9 cardinal successful charges successful 2022 and 2023 related to "consolidating our bureau facilities footprint."

Total costs for the 3rd 4th came successful supra estimates astatine $22.1 billion, compared with $18.6 cardinal the twelvemonth prior. Analysts had forecast astir $20.6 billion.

"The interest for Meta is that this symptom is apt to proceed into 2023 arsenic outgo headwinds stay a existent situation and the beardown dollar impacts connected overseas earnings," said Ben Barringer, equity probe expert astatine Quilter Cheviot.

"Given revenues were down astatine a clip erstwhile costs person grown significantly, humble idiosyncratic maturation and impressions simply isn't going to bail you out."

Net income successful the 3rd 4th fell to $4.40 billion, oregon $1.64 per share, from $9.19 billion, oregon $3.22 per share, a twelvemonth earlier, its worst showing since 2019 and the 4th consecutive 4th of nett decline.

Analysts had expected a nett of $1.86 per share.

Reporting by Katie Paul successful Palo Alto, Calif. and Chavi Mehta successful Bengaluru; Additional reporting by Sheila Dang successful Dallas; Editing by Anil D'Silva, Peter Henderson and Lisa Shumaker

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