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].

Trade the News: View our Economic Calendar

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 Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 04 Feb 2022 https://investor.fb.com/investor-news/press-release-details/2022/Meta-Reports-Fourth-Quarter-and-Full-Year-2021-Results/default.aspx

2

Retrieved 04 Feb 2022 https://s21.q4cdn.com/399680738/files/doc_financials/2021/q4/Meta-Q4-2021-Earnings-Call-Transcript.pdf

3

Retrieved 04 Feb 2022 https://www.gov.uk/government/news/cma-fines-meta-a-second-time-for-breaching-enforcement-order

4

Retrieved 04 Feb 2022 https://ir.aboutamazon.com/news-release/news-release-details/2022/Amazon.com-Announces-Fourth-Quarter-Results/

5

Retrieved 04 Feb 2022 https://s25.q4cdn.com/442043304/files/doc_financials/2021/q4/Q4'21-Earnings-Release.pdf

6

Retrieved 04 Feb 2022 https://s25.q4cdn.com/442043304/files/doc_financials/2021/q4/Snap-Inc.-Q4-2021-Earnings-Prepared-Remarks.pdf

7

Retrieved 04 Feb 2022 https://s23.q4cdn.com/799033206/files/doc_financials/2021/q4/Strategic-Progress-of-Ford-Growth-Plan,-Solid-Financials-in-%e2%80%9921-Position-Company-for-Connected-EV-Leadership-in-2022,-Beyond.pdf

8

Retrieved 04 Feb 2022 https://s23.q4cdn.com/799033206/files/doc_financials/2021/q4/December-2021-Sales-Release-Final.pdf

9

Retrieved 04 Feb 2022 https://www.sony.com/en/SonyInfo/IR/news/20220131_E.pdf

10

Retrieved 27 Jun 2022 https://www.sony.com/en/SonyInfo/IR/library/presen/er/pdf/21q3_supplement.pdf

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