san francisco The crisis at the Facebook group Meta is coming to a head. Founder Mark Zuckerberg’s company announced a decline in sales for the past quarter, and profits even halved compared to the same period last year.
On the stock exchange, the company’s shares fell by more than 12 percent and in after-hours trading were at their lowest level since 2016. Since the beginning of the year, Meta has already lost more than two-thirds of its value on the stock exchange.
Meta’s third-quarter revenue fell four percent year over year to $27.7 billion. At the same time, the company’s costs and expenses increased 19 percent year-over-year to $22.1 billion. Operating income fell 46 percent year over year to $5.66 billion.
Metaverse causes $9 billion loss
With Ambitions for the Metaverse consolidated into the Reality Labs unit, sales halved to $285 billion. Losses rose to $2.76 billion in the past quarter. Since the beginning of this year, the unit has incurred a loss of $9.4 billion.
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For the final quarter of this year, Meta issued a guidance of $30 billion to $32.5 billion in revenue. Analysts had expected sales of around $32.2 billion.
The main source of income for Meta is advertising, which the company places on its products such as Facebook or Instagram. Advertisers are holding back on spending due to concerns about the economy. In addition, the iPhone group Apple has restricted targeted advertising on its devices, which costs companies like Facebook additional income.
Meta isn’t the only company hit by a tougher advertising environment. Last week, Snap’s stock plummeted 30 percent after the company reported weak revenue numbers.
Google’s parent company Alphabet had also disappointed with its quarterly figures presented on Tuesday. The video portal YouTube from Google had reported falling sales figures for the first time. As a result, Alphabet’s share price fell by more than nine percent on Wednesday.
More: Google mother Alphabet fails to meet expectations – YouTube sales are shrinking for the first time.