Facebook reports revenue miss, plans to break out AR

After the bell, U.S. social media giant Facebook released its Q3 financial results. The company reported total revenue of $29.0 billion and earnings per share at $3.22. These figures were calculated on a diluted basis. According to Yahoo Finance data, investors expected the company would report revenues of $29.58 trillion and earnings per share at $3.19.
After-hours trading has seen Facebook shares rise modestly, suggesting that people are not surprised that they came in slightly below the top-line.

This may be because Snaps digest dropped last week and Facebook's report is not surprising. Snap shares dropped after the company said it expected a much smaller Q4 than the market, and blamed Apple and its supply-chain problems for its revenue growth woes.

Facebook sent investors guidance in its fourth quarter 2021 letter. It included revenue estimates that range between $31.5 billion to $34 billion. The market anticipates $34.89 trillion, which is higher than what Facebook indicated.

Expected sources seem to be responsible for the gap between market expectations and Facebook's forecasts. In its earnings note, the social media giant stated that its Q4 guidance was as follows:

We are aware of the uncertainty that we face in the fourth-quarter due to continued headwinds from Apple's iOS 14 changes and macroeconomic and COVID related factors. We expect that non-ads revenue will be lower year-over-year for the fourth quarter, as we continue to celebrate the launch of Quest 2 last holiday season.

It was expected that Apple's mobile operating system would make changes to protect privacy and address the downstream effects.

Facebook also announced in its investor digest that FRL will be a separate revenue segment.

Facebook will now have two segments starting next quarter. Facebook will have two segments starting next quarter. The first, the Family of Apps grouping will display results from Facebook and Messenger. FRL will contain augmented and virtual reality-related consumer hardware, software, and content.

It's fine. Perhaps even good. Facebook, my God, why not separate your reporting from social media apps into smaller buckets? That would have been shareholder-friendly.

We are still reading.


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