Earnings Preview | Meta Platforms Expected to Report Flat Q1 Revenue, Significant Decline in Net Profit
According to Visible Alpha, analysts expect Meta Platforms to generate revenue of $27.7 billion in the first quarter, with an estimated net profit of $5.3 billion. This is a 28% decrease compared to the same period last year, when the net profit was $7.4 billion.
Meta Platforms, the parent company of Facebook and WhatsApp, will release its first-quarter financial report after the US stock market closes on Wednesday.
Analysts predict that Meta Platforms may see a 28% drop in earnings per share in the first quarter and face a third round of layoffs, with advertising revenue dragging down profits.
Meta Platforms' stock price has risen more than 73% this year to $213, outperforming the S&P 500's 20% gain in the communication services sector.
Analyst Expectations
According to Visible Alpha data, Meta Platforms' Family of Apps and Reality Labs divisions are expected to generate flat revenue of $27.7 billion in the first quarter, with diluted earnings per share of $2.01.
Net profit is expected to be $5.3 billion, down 28% from the same period last year when it was $7.4 billion.
Further Layoffs
Analysts believe that large-scale layoffs by technology companies are a sign of slowing advertising revenue.
Due to the imminent need for layoffs, analysts are not optimistic about the financial reports of large technology companies this quarter. In November last year, Meta Platforms cut 11,000 jobs, and last week it cut another 10,000.
It is reported that Meta Platforms is preparing for a new round of layoffs in May.
In November 2021, Meta Platforms changed its name from Facebook. Shifting the focus to the virtual world of the virtual world.
This is a slowly developing business. The Wall Street Journal reported last year that the company lowered its target from 500,000 active users per month to 280,000.
"Expectations are low," said Tom Forte, an analyst at D.A. Davidson.
Key Indicators
Meta Platforms Platforms Platforms Platforms Platforms Platforms Platforms Platforms's key indicator is Facebook's monthly active user (MAU) data.
In the first quarter of 2022, Facebook had 2.34 billion monthly active users, and analysts expect this quarter's users to be 2.99 billion.
The massive user base is Facebook's main source of revenue - key to advertiser spending.
