Shares of Meta Platforms (META:US), the parent company of Facebook and Instagram, declined 4% on Thursday despite the internet giant reporting a very strong set of figures for the third quarter.
The company’s management delivered disappointing news to investors by stating that a long-term recovery in advertising is uncertain, as it is heavily influenced by the unpredictable economic environment.
CFO Susan Li noted that ad spending was weaker at the beginning of this quarter due to the rising Middle East tensions.
The company previously guided for Q4 revenue of $36.5 billion to 40 billion, which was roughly in line with analyst expectations.
Positively, Meta lowered its capex guidance by $500 million to $88 billion for the full year. On a negative note, the company said its metaverse business “Reality Labs” will likely see its operating losses increase this year.
Meta’s Q3 revenue surged 23% YoY to $34.15 billion, easily ahead of the consensus of $33.5 billion. The company also reported a profit per share of $4.39 and an operating margin of 40%, doubling from the 20% reported for the same period last year.
"We had a good quarter for our community and business," said Mark Zuckerberg, Meta founder and CEO. "I'm proud of the work our teams have done to advance AI and mixed reality with the launch of Quest 3, Ray-Ban Meta smart glasses, and our AI studio."