Weekly Stockwatch: Meta Plunge, Amazon Advertising Revenue, Snap Profitability, & More
Meta (Facebook) Wipeout
FB.us wiped out around $90 on Thursday and collapsed to its lowest level late-July 2020, after Facebook parent company, Meta, reported quarterly financial results [1] to which markets reacted negatively.
Meta's Revenue rose 20% year-over-year, to a solid $33.671 in Q4 2021, but the firm projected Revenue of just $27-29 billion in Q1 2022, disappointing investors..
More to it, the new reporting segment "Reality Labs (RL)", which is tasked with delivering the Metaverse, lost $10.193 billion in 2021.
Advertising has been facing headwinds from Apple's iOS privacy changes, with CEO Mark Zuckerberg commenting that "With Apple's iOS changes and new regulation in Europe, there's a clear trend where less data is available to deliver personalized ads". CFO Dave Wehner said that the "the impact of iOS overall as a headwind on our business in 2022 is on the order of $10 billion" [2].
Facebook has been dealing with increasing competition from rivals such as TikTok and Snap, with its average Daily Active Users (DAUs), stagnant below 2 million over the last few quarters.
Regulatory headwinds persist, as today the UK Competition and Markets Authority (CMA), levied a new fine of £1.5m on the social media giant, over the Giphy acquisition [3]. CMA had instructed Meta, to sell Giphy in November, a ruling agents which the company has appealed.
Amazon Solid Results
Amazon does not seem to have any issues with its advertising inflows, as it disclosed Ad Revenue for the first time on Thursday. Advertising Services generated $9.716 billion in Q4 2021, up 33% year-over-year [4].
Revenue from its Cloud Service (AWS) surged 40% y/y, to $17.78 billion, while Total Revenue rose to $137.4 billion, in line with the firm's expectations, up 9% year-over-year.
Amazon's Profits surged to $14.32bn in a fourth quarter, boosted by $11.8 billion gains from its stake in Electric Vehicle (EV) maker Rivian.
On the other hand, the tech and retail giant offered low net sales guidance for Q1 2022, in the $112- $117 billion region.
Markets liked Amazon's results as its stock was up in premarket trading on Friday.
Snap Turned Profitable
The popular social media company, broke into profits in Q4 2021, for the first time since it went public, with the stock surging in today's premarket. [5].
Net Income was $23 million from an around 113 million Loss a year ago, while Revenue increased 42% from a year ago, to roughly $1.3 billion. Snapchat's Daily Active Users (DAUs) were 319 million in Q4 2021, an increase of 54 million, or 20%, year-over-year.
Snap could not escape from the headwinds of Apple's App Tracking (ATT) changes, but it is making "solid progress" on the Direct Response side, as per Chief Business Officer Jeremi Gorman. [6]
Ford Missed Estimates
The historic automaker missed estimates with Revenue of $37.7 billion and Earnings/share of $0.26, In the fourth quarter of 2021. Investors did not seem to be particularly happy with the full 2022 guidance $11.5 - $12.5 billion in earnings (adjusted EBIT), which would constitute though a rise over the $10.0 billion reported in 2021. [7]
Commenting on the firm's EV push, CEO Jim Farley said that "customers see Ford is taking EVs mainstream, and have already ordered or reserved more than 275,000 all-electric Mustang Mach-E SUVs, F-150 Lightning pickups and E-Transit commercial vehicles.
The F-series was the best-selling truck in America in the past year and its highly anticipated electric variant, the F-150 Lightning, is on track for Spring launch. [8]
Videogames
Tech giant and PlayStation manufacturer Sony, announced on Monday that Sony Interactive Entertainment LLC ("SIE") will acquire Bungie, Inc for $3.6 billion. Bungie is a US-based videogame developer, known for franchises such as Halo and Destiny. [9]
This move comes after console-rival Microsoft had announced a massive $68.7 billion acquisition of gaming publisher and developer Activision Blizzard, which is famous for games such as Call of Duty and Warcraft.
Sony also released its quarterly results (Q3 FY2021) on Wednesday showing that 3.9 million PS5 consoles were sold, up from 3.3 in the previous quarter. [10]
Next Week (February 7-11)
During the upcoming week we expect some more "heavy names" from the United States such Disney, Coca-Cola, Twitter and ride-hailing rivals Uber and Lyft.
We also expect energy giant BP, a series of French banks like BNP Paribas, Societe Generale and Credit Agricole and other firms.
Nikos Tzabouras
Senior Financial Editorial Writer
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. With extensive experience in market analysis and a strong foundation in international relations, he brings a unique perspective to financial markets. Nikos emphasizes not only technical analysis but also on fundamentals and the growing influence of geopolitics on financial trends.
As a Senior Financial Editorial Writer, he delivers comprehensive and forward-looking insights across a wide range of asset classes, including equities, commodities, and currencies. His work explores how macroeconomic events, political developments, and global policies impact market dynamics, providing readers with a deeper understanding of both short-term movements and long-term trends.
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