Meta Beats Wall Street’s High Expectations, But Stock Falls On Weak Advertising Worries

Facebook parent company Meta Platforms (META) saw its revenue rise 23% in the third quarter, according to earnings results published late Wednesday. Meta stock rose following the report which beat Wall Street estimates. But the shares turned lower in late trades after the company warned of weakening advertising demand.

For the quarter ending September 30, Meta said it earned an adjusted $4.39 per share on revenue of $34.1 billion. Analysts polled by FactSet expected Meta to report adjusted earnings of $3.64 per share from revenue of $33.6 billion.

Meta’s results represent a 168% year-over-year earnings increase and 23% sales increase.

“We had a good quarter for our community and business,” said Mark Zuckerberg, Meta founder and CEO, in the news release. “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.”

On the stock market today, Meta stock rallied 3% after the report. But the shares slipped into the red in late trades. On the company’s earnings call, Chief Financial Officer Susan Li said the tech giant was “seeing continued strong advertiser demand in key segments, including online commerce and gaming.”

Echoing Snap’s earlier warning about the potential impact of the Israel-Hamas War, Li also said, “While we don’t have material direct revenue exposure to Israel in the Middle East, we have observed softer ad spend in the beginning of the fourth quarter, correlating with the start of the conflict, which is captured in our q4 revenue outlook.”

Shares jumped as much as 5% following the report. But Meta stock was down around 3% in late trades.

Prior to earnings, shares closed trading Wednesday down 4.2% at 299.53. Meta stock has gained 150% this year, making it one of top performers in the S&P 500.