Facebook Inc (NASDAQ:FB) revenues came in lower than expected and it cut guidance for the fourth quarter as the social media giant battled a flood of negative news reports.
Third-quarter profits of US$9.19bn, equating to earnings per share of US$3.22 a share, were better than expected, however, and well up on EPS of US$2.71 reported a year earlier.
Sales rose to US$29.01bn from US$21.47bn a year ago, but Wall Street analysts expected them nearer US$29.5bn on average.
What’s more, boss Mark Zuckerberg’s revenue guidance for the final quarter of the year was cut to a range of US$31.5bn to US$34bn, having previously been pitched at US$34bn and with analyst estimates pointing to US$34.7bn.
The guidance reflects the “significant uncertainty we face in the fourth quarter in light of continued headwinds from Apple’s iOS 14 changes, and macroeconomic and COVID-related factors”, said financial chief David Wehner.
Zuckerberg has previously complained about Apple’s new system, which requires apps to get permission to track user behaviour, and is expected to affect the ability of advertisers to target effectively their advertisements at the right user base when advertising on Facebook.
Despite negative headlines in the past month, including former employee and whistleblower Frances Haugen saying the company chose profit over user safety; the group's Instagram app among those accused of breaching the UK's Children's Code, and the company being fined for ignoring the UK competition authority, Facebook reported 1.93bn daily active users on average in September, an increase of 6% compared to a year earlier, while there were 2.9bn monthly active users, an increase of 6% year-over-year
Zuckerberg told analysts the news stories in recent weeks painted a "false picture of our company."
He is more focused on the development of the 'metaverse', where some of the group's US$58.1bn of cash is being poured.
The company plans to up investment in its hardware-focused Facebook Reality Labs division, which will reduce full year operating profit by around US$10bn.
Facebook shares initially dipped after the after-hours earnings release but the mixed results were softened by the announcement of a US$50bn share buyback, on top of the US$8bn remaining in its last repurchase plan, with the shares rebounding and expected to open 1.8% higher at around US$334.5.