(FiveNation.com)- Amid a looming recession and other pressures weighing down companies at this time, Meta Platforms, Inc. reported its first ever quarterly drop last week, according to Newsmax. Shares of the company were down about 1.4% in extended trading. What the company expects of revenue falls short of what analysts were expecting.
Meta expects its third-quarter revenue between $26 billion to $28.5 billion, while analysts were expecting $30.52 billion, falling short on the low end of just over $4 billion. At the end of the second-quarter ending in June 30, total revenue dropped 1%, marking a $300 million drop compared to last year.
User growth figures reportedly show mixed results as monthly active users came in just under analysts’ expectation of 2.93 billion and daily active users crushed estimates at nearly 2 billion.
Based on current exchange rates, Meta said that they expect a 6% revenue growth; however, they are facing revenue pressure from the “strong dollar, as sales in foreign currencies amount to less in dollar terms.” Meta is experiencing some struggle as it tries to retain users’ time and attention while competing with TikTok. The struggle comes as an image went viral on Meta’s Instagram petitioning the social media giant to stop trying to make the platform like TikTok.
Meta’s second-quarter operating profit margin fell to 29% from 43% as revenue fell but costs increased. The company is also carrying over several expensive moves as it tries to retain user attention by pushing out the “metaverse” and other hardware and software needed for that.
Social media platforms are being more severely financially impacted compared to search platforms, like Alphabet Inc., as ad buyers are reeling in their expenditures. Alphabet, the world’s largest digital ad platform, diverged with social media platform Meta after it reported a rise in quarterly revenue last week as sales from Google Search topped investors’ expectations.
Other social media companies like Snap Inc. and Twitter missed sales expectations and “warned of an ad market slowdown in coming quarters, sparking a broad sell-off across the sector,” according to Newsmax.