The Facebook parent company, Meta Platforms Inc. (FB) posted mixed earnings on April 27, after the bell. The company’s Q1 fiscal 2022 earnings gave a sigh of relief to the fearful investors despite a revenue miss. Thus, the stock jumped up in the after-hours to add 18.34% at a heavy volume. 15.46 million shares had the stock trading at a price of $207.04 in the session. This surge came after a decline of 3.32% in the prior session which had the stock valued at $174.95 a share. Moreover, the regular session’s downfall registered a new 52-week low as well.
What Does the Earnings Report Say?
The company’s earnings while a miss on some was a beat on other items. The company’s revenue rose by just 7% YOY to $27.9 billion in the quarter. Analysts were expecting the company to report revenue of $28.3 billion which thus missed the expectations.
On the other hand, giving a positive surprise was FB’s earnings. Despite the 21% decline in net income on the heels of a massive increase in total costs and expenses, the earnings were better than expected. The net income decreased from $9.49 billion in Q1 2021 to $7.46 billion in 2022’s first quarter. However, earnings of $2.72 per share beat the analysts’ expectations of $2.56 a share for the quarter.
Additionally, the YOY user growth slowed down as key metrics rose by just 3%-6% against the first quarter of 2021. But another surprising factor that showed signs of life for the giant was growth in the number of daily active Facebook users. Marking a turnaround from the first-ever decline in users last year, the daily active users grew to $1.96 billion in Q1 2022. While the increase was just 4% YOY it was still much better than a decrease.
FB’s Future Outlook
Given the major shift the company is undergoing as it moves towards metaverse on top of the multiple challenges (competition, antitrust from Congress, etc), FB’s outlook also remained shy of expectations. The company’s Q2 guidance has the revenue pegged at $29 billion at the midpoint, which is below estimates of $30.7 billion.
A Quick Overview of the Market
On Tuesday, Nasdaq closed at its worst level in over a year on tech earnings fear amid implications of inflation and China lockdowns on Covid-19. But Wednesday brought a sigh of relief as the tech giants helped the composite inch higher amid mixed earnings. While Alphabet was disappointed, Microsoft and Meta rallied.
Despite mixed results, investors celebrated FB over signs of life as the company’s earnings surpassed estimates while daily users recovered.