Oct. 27 (UPI) — Meta shares plummeted Wednesday after the Facebook parent company announced a second straight quarterly revenue loss, along with a weak outlook for the fourth quarter.
Meta shares dropped 19% in extended trading on Wednesday after the company released its earnings, which fell short of expectations.
Meta’s third quarter revenue of $27.1 billion was 4% lower compared to the same period last year. It is the second straight quarterly revenue decline for the company.
In after-hours trading, Meta stock hit its lowest level since March of 2016, losing 25.52 points to close at 104.30. Meta’s stock has lost two-thirds of its value so far this year.
Meta’s forecast for the fourth quarter also falls short of expectations. The company expects to see revenue between $30 billion and $32.5 billion to close out 2022. Analysts were expecting sales of $32.2 billion.
Meta’s latest revenue loss announcement comes two weeks after the company unveiled its newest virtual reality headset, the Quest Pro, with a high price point at $1,500. The Reality Labs division, responsible for the headsets, has lost more than $9 billion over the first three quarters of 2022.
“We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year,” Meta said in a statement. “Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run.”
Meta said the latest earnings report will change its hiring plans, as the company holds some teams flat and makes cuts to others.
“As a result, we expect headcount at the end of 2023 will be approximately in-line with third quarter 2022 levels,” the company said.
While Meta investor Altimeter Capital urged the company earlier this week to limit its investments in virtual reality, Meta is showing no signs of slowing its expansion into the metaverse.
“While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth,” Mark Zuckerberg, Meta founder and chief executive officer, said in a statement.
“We’re approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company.”
