Meta's profit slips as Facebook loses users

Facebook parent Meta announced results that disappointed the market

Facebook's parent firm Meta on Wednesday delivered a gloomy mix of a sharper-than-expected drop in profit, a decrease in users and threats to its ad business that plunged shares some 22 percent in after-hours trading. 

Already jittery markets have punished pandemic-era darlings including Netflix for disappointing results, with Meta getting a taste of that after its $10.3-billion quarterly profit and daily user-growth fell short of expectations.

CFO Dave Weiner told analysts that user growth was impacted by "headwinds" including disproportionate growth in the Asia-Pacific during the pandemic that has slowed and an increase in mobile data prices in India.

The company's executives have repeatedly referred to competition from TikTok but also from other networks, while they face numerous probes and complaints of abuse of dominance.

On the financial side, Meta achieved a turnover of $33.67 billion, in line with its forecasts, but it made $10.3 billion in net profit in the fourth quarter, eight percent less than last year.

Meta's share price was down about 22 percent to roughly $250 at 0010 GMT in after-hours trade.

In the update of iOS, its mobile operating system, Apple required application publishers to ask permission before collecting data, much to the regret of companies like Meta that rely on that information for ad targeting.

"It seems that many are re-evaluating in real-time," he added.

- Metaverse cost -

The Silicon Valley giant's whistleblower crisis last year highlighted accusations that executives prioritized growth over keeping their billions of users safe.

An activist group calling itself The Real Facebook Oversight Board seized on the results to warn of what may come next.

"This will no doubt make them more desperate to drive ad revenue by any means necessary," it added.

In this future that evokes science fiction, the public will use augmented reality glasses and virtual reality headsets to find their way around, work or play. 

"There's a lot of uncertainty about Meta's investments in the metaverse and if or when they will have a positive impact on the company's bottom line," said analyst Debra Aho Williamson.

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