Meta Set to Report Third-Quarter Earnings: What to Expect
Meta, the social media giant, is scheduled to report its third-quarter earnings on Wednesday after the close of regular trading. The company’s shares have been on a tear this year, up almost 70% and trading near a record high.
Strong Earnings Reports Boost Meta’s Stock
The company’s gains on Wall Street have benefited Meta CEO Mark Zuckerberg, who earlier in October surpassed Jeff Bezos as the world’s second-richest person for the first time. Zuckerberg has been pointing to Meta’s massive investments into artificial intelligence as a key factor in improving the company’s core online ad business.
Investors Remain Optimistic
With Meta reporting its fourth straight quarter of sales growth above 20%, investors remain optimistic about the company’s overall financial health. Bernstein analysts have even replaced Alphabet with Meta as their “set-it-and-forget-it blue chip holding” due to the company’s “healthy core business” and low-risk AI strategy.
Possible Concerns: Slowing Revenue Growth
One possible concern for Meta could be slowing revenue growth. If the company hits analysts’ expectations for third-quarter revenue, that would represent 18% year-over-year growth, down from 23% a year ago. This could be a “tough bar” for the company to beat, according to Angelo Zino, vice president and technology equity research analyst at CFRA.
Guidance Will Be Key
Investors will be eager to see guidance from Meta on its future growth prospects. With the company continuing to invest heavily in its Reality Labs hardware division, expenses are likely to remain high. However, the strong online advertising business and previous rounds of major layoffs have helped quell concerns from anxious investors.
Orion AR Glasses Generate Buzz
Meanwhile, Meta’s showcase of its Orion AR prototype glasses in September was viewed as a success by employees. The company plans to court software developers in 2025 as it works towards a consumer version of the headset. The excitement around Meta’s prototype glasses has eclipsed that of Apple’s competing Vision Pro VR headset.
Ray-Ban Meta Smart Glasses Gain Popularity
Meta also hopes to build off the excitement of its Ray-Ban Meta smart glasses, developed in partnership with EssilorLuxottica. Due to the positive reaction to the glasses, they “could be a popular gift this Christmas,” according to Barton Crockett, managing director and senior research analyst at Rosenblatt Securities.
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