Social Media Giant, Facebook, Gains On Earnings And Buyback

In extended trading on Monday, Facebook shares rose more than 3% after the company posted better-than-expected earnings even as revenue fell short of analysts’ expectations.

Also announced was an increase of $50 billion for Facebook’s share buyback program.

Starting in the fourth quarter, Facebook will separate Reality Labs into a separate reporting segment.

In this segment, Facebook will offer hardware, augmented reality, and VR products. The company’s family of apps, including Facebook, Instagram, Messenger, WhatsApp, and others, will contribute to the other revenue segment.

As a result of its investments in hardware and virtual reality, Facebook expects operating profit to decline by about $10 billion in 2021.

The company announced in July that there would be a new team devoted to the metaverse, a 3D environment in which multiple people can interact.

In 2022, Facebook announced that Bosworth, who is presently the head of its hardware division, would become the company’s chief technology officer.

According to Facebook, revenue increased 35% year over year, while profit rose 17% to $9.2 billion from $7.8 billion.

In the fourth quarter, the company expects revenues to be in the range of $31.5 billion and $34 billion.

Analysts were anticipating $34.8 billion in sales. In its forecast, Facebook noted, “We face significant uncertainty in the fourth quarter as a result of Apple’s iOS 14 updates, macroeconomic conditions, and COVID-related factors.”

It was announced earlier this year that Apple was adding prompts to its apps that allow users to avoid being targeted with ads. After the company blamed the iOS changes for disrupting its business in its earnings report last week, Snap’s shares plunged 27%.

Facebook’s “other” segment, which includes consumer hardware like Oculus virtual reality headsets, generated $734 million in revenue, up 195% and more than the consensus estimate of $477 million

The number of monthly users across the Facebook family of apps reached 3,58 billion in the third quarter, up from 3,51 billion in Q2. Facebook uses this metric to measure the total number of users across its main app, Instagram, Messenger, and WhatsApp.

196 million daily active users were reported in the United States and Canada, where Facebook generates higher revenue per user than in other regions. By the end of the second quarter, there were 308 million people in Europe.