Meta Platforms Inc. provided a gloomy outlook after disclosing its first-ever quarterly sales decrease on Wednesday, citing pressure from the competition and worries about an imminent recession as causes influencing sales of digital ads.
In extended trading, shares of the Menlo Park, California-based business were down roughly 4.6%. The business predicted that third-quarter revenue will decline to between $26 billion and $28.5 billion, marking the second consecutive decline from the same period last year. Analysts anticipated $30.52 billion.
The total revenue, which is nearly entirely made up of ad sales, decreased by 1% to $28.8 billion for the second quarter that ended on June 30 from $29.1 billion in the prior year. The amount fell just short of Wall Street’s $28.9 billion forecast. Facebook’s core social network reported 2.93 billion monthly active users in the second quarter, a little decrease from expert projections but a rise of 1% year over year, while 1.97 billion daily active users easily outperformed forecasts.
The high dollar is putting some revenue pressure on many multinational corporations, including Meta, as sales in other currencies are less in dollar terms. Based on current exchange rates, Meta stated that it anticipated a headwind to revenue growth of 6% in the third quarter.