Facebook Meta Sees Stock Rise Despite Slowest Revenue Growth in a Decade – Nationwide | The Canadian News

Facebook parent Meta’s first-quarter profit and daily user count beat Wall Street expectations despite the company’s slowest revenue growth since it went public a decade ago. Shares rose sharply in after-hours trading.

The company earned $7.47 billion, or $2.72 per share, in the January-March period. That’s down 21% from $9.5 billion, or $3.30 per share, in the same period a year earlier.

Revenue rose 7% to $27.91 billion from $26.17 billion _ the slowest growth rate in a decade for the online advertising powerhouse that typically reports double-digit sales growth.

Analysts, on average, had expected earnings of $2.56 per share on revenue of $28.28 billion, according to a survey by FactSet.

Meta marked a stark contrast to Google’s parent company Alphabet, which on Monday reported what analysts called disappointing earnings, with earnings falling short of Wall Street expectations. Google also reported a slowdown in revenue growth, but for Meta this appears to have been mitigated by an increase in daily active users that “was enough to cause shorts to cover and stocks to rise,” said Jesse Cohen, senior analyst. from Investing.com.

“That said, it was a mixed report overall, as the social media giant continues to struggle with slowing revenue growth amid reduced ad spending amid the current inflationary environment,” Cohen said.

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Apple’s recent privacy changes have made it harder for companies like Meta to track people for advertising purposes, also putting pressure on the company’s revenue. For months now, Meta has been warning investors that its revenues cannot continue to grow at the breakneck pace they are accustomed to, so single-digit revenue growth for the quarter is likely already within investor expectations. .

Meta said Facebook had 1.96 billion daily active users on average as of March 2022, a 4% year-over-year increase. The company’s earnings report in February showed a decline in daily users for the first time, so last quarter’s increase served to reassure investors that it may have been a problem, not a sign of things to come.

Shares of the Menlo Park, California-based company rose $27.12, or 15.5%, to $202.07 in after-hours trading.

The stock has taken a hit this month amid news of Elon Musk’s purchase of Twitter and closed regular trading at $174.95 _ down 48% from the start of the year.