Meta shares drop as Q2 profit declines due to legal expenses and severance costs
Meta Platforms said Wednesday its second-quarter profit declined even as revenue beat Wall Street's expectations, as legal expenses and severance costs for recent layoffs weighed on its results.
The Facebook and Instagram parent company earned $15.85 billion, or $6.18 per share, in the April-June period. That's down 14% from $18.34 billion, or $7.14 per share, in the same period a year earlier.
Revenue grew 28% to $60.8 billion from $47.52 billion.
Analysts, on average, were expecting earnings of $7.19 per share on revenue of $60.22 billion, according to a poll by FactSet.
“AI is accelerating our core business today, powering our next generation of products, and opening the door to entirely new enterprise opportunities,” said CEO Mark Zuckerberg in a statement. “The results are already showing, and I’m optimistic about the potential ahead.”
Meta said the number of daily active users on its “family of apps” — Facebook, Messenger, Instagram and WhatsApp — grew 3% from a year earlier to $3.6 billion.
The Menlo Park, California-based company had 75,472 employees as of June 30, a decrease of 1% year-over-year. This still includes the roughly 8,000 workers the company said it would lay off. Meta said its third-quarter earnings report will have the updated figure.
For the current quarter, Meta is forecasting revenue in the range of $61 billion to $64 billion, the midpoint of which is lower than the $63.14 billion that analysts are expecting.
Total expenses were $42.03 billion, an increase of 55% year-over-year. Meta said this includes $2.40 billion of charges related to legal proceedings and $1.18 billion of severance expenses in connection with the layoffs announced in May.
Meta's shares fell $24.76, or 4.2%, to $560.85 in after-hours trading after the results came out.
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