Facebook group Meta with a profit slump of more than 50 percent
The development of the Metaverse consumes a lot of money. At the same time, Facebook is breaking away from advertisers. With inflation and a bleak economic outlook, they are spending less money on online ads.
Facebook founder Mark Zuckerberg’s meta group has suffered a sharp drop in profits. (archive image)
The decline in sales at the Facebook group Meta accelerated in the past quarter. Revenue fell 4 percent year-on-year to $27.7 billion, Meta announced after the US market closed on Wednesday.
The bottom line is that profits fell by 52 percent to around 4.4 billion dollars. The sales forecast also disappointed investors. They temporarily dropped the stock by around 12 percent in after-hours trading.
Rising costs with falling revenue
Facebook is concerned that advertisers are spending less on online ads in the face of high inflation and economic concerns. The business of Google and the photo app Snapchat is also suffering.
In the second quarter, Meta reported the first decline in sales, at that time the minus was 1 percent. While less money is coming in, costs rose by around a fifth to a good $22 billion in the past quarter.
Metaverse will be even more expensive
Among other things, the development of virtual worlds, to which Facebook founder Mark Zuckerberg (38) wants to align the group, continues to consume a lot of money. In the past quarter alone, the Reality Labs division, which is working on the so-called Metaverse, posted an operating loss of almost $3.7 billion.
Since the beginning of the year, a deficit of 9.4 billion dollars has accumulated. And CFO Dave Wehner announced that Reality Labs’ losses would “grow significantly” in the coming year.
For the current quarter, Meta forecast sales of between $30 billion and $32.5 billion. In the same quarter of the previous year, there had been an increase of 20 percent to almost 33.7 billion dollars. (SDA/sfa)