Meta's Earnings Miss and Guidance Spark Market Reaction
Shares of Meta Platforms fell more than 11% in extended trading after reporting an earnings miss and weaker-than-expected guidance. While revenue exceeded analyst estimates, adjusted EPS came in below expectations due to one-time legal and severance charges totaling $3.58 billion. These non-recurring expenses skewed the GAAP results but did not reflect operational issues. Meta's reported operating income was $18.775 billion; excluding the charges, it would have been over $22 billion—beating expectations with a 9% year-over-year increase and an adjusted margin of nearly 36.8%. The company also raised its capital expenditure guidance for the full year to between $130 billion and $145 billion, which is seen as concerning in light of investor worries about AI infrastructure spending. Despite the short-term volatility, some analysts remain optimistic due to Meta's strong digital advertising position, user engagement, and long-term growth potential. However, market sentiment has soured on big tech companies amid rising capital outlays for AI development.
Tickers: $META
Topics: earnings miss guidance Meta Platforms stock price reaction