Facebook’s third quarter results had a ‘pretty thick silver lining,’ analyst says

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Shares of Facebook (FB) were hit on Tuesday after Monday’s announcement that recent changes made by Apple (AAPL) to iOS privacy and declining interest from younger consumers.

The news came after Facebook announced profits that exceeded profits but missed out on revenue. As the company’s shares were down nearly 5% just before 2:30 p.m. Wednesday, MKM Partners analyst Rohit Kulkarni told Yahoo Finance Live that the social media giant’s profits were actually better than expected. .

During the company conference callCEO Mark Zuckerberg announced that the company is digging deeper into the metaverse, or persistent online worlds, by making its Facebook Reality Labs a new reporting segment. He also highlighted efforts to improve his growth prospects with teens, a group whose presence has started to erode on Facebook.

“The tone of the management team, the outlook for 4Q and the new disclosures they are going to make with Facebook Reality Labs, as well as the buyouts … add to a pretty thick silver lining in my opinion,” said said Kulkarni.

“When you look past Apple’s headwinds in 2022, Facebook is going to give you more disclosure, is going to buy back more shares, and obviously they’re going to reveal that the core business generates a lot of money,” a- he added.

Facebook CEO Mark Zuckerberg. (AP Photo / Mark Lennihan)

Facebook reported revenue of $ 29.01 billion, just below expectations of $ 29.45 billion, but topped profits, which stood at $ 3.22 per share against expectations of $ 3.17. The company saw a 12% increase in the number of monthly active users in its family of apps to 3.58 billion, from 3.51 billion expected users.

Facebook’s earnings report came after Snap (SNAP) said on an earnings call that Apple’s new app tracking transparency, introduced in April, was hampering advertisers’ ability to track effectiveness of their campaigns.

Apple’s app tracking transparency allows users to choose whether they want their apps to track their web activity through their unique identifier for advertisers. Apple has introduced an alternative to this tracking, but Snap says advertisers are concerned about its limits.

Advertisers need to know how their ads are performing to know if they are spending their money in the right places. If the ads are underperforming on one platform, they can downgrade them and invest elsewhere.

Facebook, however, says its decision to develop its apps as e-commerce platforms will help offset Apple’s privacy changes in the long run. The company also announced that it will make more concerted efforts to attract young adults, a demographic that has become a handicap to the future of Facebook.

“We are reorganizing our teams to make service to young adults their north star, rather than optimizing for the greatest number of older people,” Zuckerberg said on Facebook’s earnings call.

Yet Facebook is under a number of outside pressures, including its fight against the Federal Trade Commission’s antitrust lawsuit and the potential for federal legislation to curb big tech. The way the business goes forward could have a bigger impact on the future of the business more than anything else.

And, of course, there are the whistleblower documents leaked by former Facebook employee Frances Haugen that show the company has taken little action on everything from the impact of its apps on the mental health of some teenage girls. the spread of hate speech and human trafficking on its platforms.

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Do you have any advice? Email Daniel Howley at dhowley@yahoofinance.com via encrypted mail to danielphowley@protonmail.com, and follow him on Twitter at @DanielHowley.



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