Facebook parent Meta saw its stock plunge in after-hours trading on Wednesday following second-quarter earnings results that came in below expectations, as investors were particularly spooked by the company’s weak revenue forecast and struggling online advertising business.
Shares of Meta plunged over 3% immediately following the earnings announcement, paring back gains from earlier in the session, when the stock rose over 6% ahead of earnings.
Meta reported quarterly revenue of $28.8 billion and earnings of $2.46 per share, compared to the $28.9 billion and $2.59 per share expected by analysts, according to Refinitiv.
The Facebook parent company’s user growth, meanwhile, was largely in line with expectations, with the company reporting 1.97 billion daily active users and 2.93 billion monthly active users.
Several Wall Street analysts warned that the company faces an “uphill battle” for the rest of the year, as its online advertising business continues to struggle thanks to Apple’s iOS privacy update and a more challenging economic environment, which has hit ad budgets.
Meta slashed its revenue outlook for the third quarter, now forecasting between $26 billion and $28.5 billion—down from analyst expectations for around $30.5 billion, according to Refinitiv data.
Beyond its online ad business, Meta continues to face increased competition for users from the likes of rival social media platforms like TikTok, while the company has also continued to spend billions of dollars on its augmented reality project, the metaverse.