Facebook Stock Slides After CFO Warns Of Slowing Growth

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Updated July 28, 2021 7:08 p.m. ET / Original July 28, 2021 5:20 p.m. ET

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Facebook shares turned sharply little successful precocious trading Wednesday aft the institution warned of slowing maturation for the remainder of the year. The cautious outlook comes adjacent arsenic integer advertisement rivals person offered a bullish forecast for online advertizing successful the coming months.

Facebook (ticker: FB) shares were down 3.9% successful the aft hours session. The banal roseate 1.5% successful regular trading Wednesday, closing astatine $373.28.

The societal media level reported second-quarter nett net of $10.4 billion, which amounts to $3.61 a share, compared with a nett income of $5.2 billion, oregon $1.80 a stock a twelvemonth ago. Revenue roseate 56% to $29.1 billion.

Analysts had expected net of $3.02 a stock connected gross of $27.9 billion.

This was a bully 4th for our merchandise and business,” CEO Mark Zuckerberg said successful the net league telephone Wednesday. “There are present much than 3.5 cardinal radical who actively usage 1 oregon much of our services, and I’m excited astir our merchandise roadmaps ahead.”

CFO David Wehner said successful the net merchandise that the institution expects year-over-year gross maturation to dilatory “significantly” done the extremity of the twelvemonth since the company’s 2nd fractional of 2020 grew rapidly arsenic the integer advertisement manufacture recovered from Covid-19-related slowdowns. Using a examination to 2019, the institution said maturation would dilatory “modestly” successful the 2nd half.

Typically the 2nd fractional of the year, particularly the 4th quarter, are beardown for online advertisement companies due to the fact that they see the vacation buying season. For the 3rd quarter, analysts expect Facebook to gain $2.95 a stock connected gross $28.2 billion.

Wehner reiterated that changes Apple has made to user tracking successful iOS apps volition person a greater effect successful the 3rd 4th than they did successful the play ending successful June. In the league telephone Wehner said that adjacent though Facebook has benefitted from a beardown integer advertisement market, advertisers person had trouble adapting to the changes. Facebook is introducing caller tools to assistance them bash so, helium said.

Facebook’s second-quarter advertizing gross grew 56% to $28.6 cardinal compared with a twelvemonth ago, boosted by astir a 50% summation successful the mean terms per ad, and a 6% summation successful the fig of ads Facebook displayed, according to Wehner. Ad maturation for the remainder of the twelvemonth volition besides beryllium powered by much costly ads, the CFO said.

During the net call, Chief Operating Officer Sheryl Sandberg said that the champion performing advertizing sectors were besides those that did good passim the Covid-19 pandemic, specified arsenic e-commerce, retail, and user goods. She added that question was recovering.

“Our show continues to beryllium driven by the ongoing integer translation which accelerated during the pandemic and our semipermanent investments successful tools and products to assistance businesses marque the displacement online,” Sandberg said.

Facebook reported its monthly progressive idiosyncratic number roseate 7% from a twelvemonth ago, to 2.9 billion, which astir met investors expectations. Daily progressive users besides roseate 7% compared with the year-ago period, to 1.91 billion. Overall, crossed its assorted platforms, Facebook said 3.51 cardinal usage 1 of its services a month, specified arsenic WhatsApp, Instagram, and Facebook itself.

Facebook’s Other conception gross roseate 36% to $497 cardinal compared with a twelvemonth ago. The “other” bucket includes the fast-selling virtual world headset Quest 2, that executives person touted arsenic the archetypal mainstream VR device. Analysts had forecast gross of $690.5 cardinal for the segment. In the league telephone Wehner said that the 2nd 4th included a gross accommodation for returns related to a Quest 2 recall.

Facebook maintained its guidance for full 2021 expenses of $70 cardinal to $73 cardinal and superior spending of betwixt $19 cardinal and $21 billion. Facebook said its caput number was up 21% from a twelvemonth ago, to 63,404 astatine the extremity of the June quarter.

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