Meta joined Alphabet and Microsoft in posting disappointing quarterly financial results, following the company’s second-quarter earnings call. In a disappointing week for mega-caps, the trio all missed revenue and earnings expectations, with Meta posting its first-ever quarterly sales decline.
Economic downturn
Due to the current global economic downturn, markets had anticipated that earnings from ultra-large-cap stocks, which make up 40% of the Nasdaq and 30% of the S&P 500, could face a bloodbath.
However, although earnings disappointed and were worse than expected across the board, some analysts suggest the situation could have been worse.
The International Monetary Fund (IMF) recently announced that it is revising its global GDP forecast for 2022, from 3.6% in early April, to growth of 3.2% for the rest of the year.
This appears to have been reflected in the earnings report released by three of the world’s largest tech companies.
Alphabet
AlphabetGoogle’s parent company was one of the first companies to report results this week, with numbers falling short of expectations.
The company said second-quarter revenue rose 13% to $69.7 billion, which was lower than the $70.8 billion forecast.
Q2 earnings came in at $1.21 per share, which was below the consensus of $1.27 per share for the quarter.
Microsoft
Microsoft also below expectations, with disappointing profit and revenue figures for the second quarter.
The Bill Gates-founded company reported earnings of $2.23 per share, versus consensus expectations of $2.29 per share.
Quarterly revenue was reported at $51.87 billion, which was below the analyst’s forecast of $52.44 billion.
Meta
To finish Metaformerly Facebook, also announced disappointing financial results for the second quarter of the year.
They confirmed that revenue totaled $28.82 billion from April to June, which was slightly lower than the $28.94 billion forecast.
EPS, earnings per share were reported at $2.46, against expectations of $2.56 per share, despite the number of daily active users on Facebook climbing to 1.97 billion against 1.95 billion expected.
After the earnings call, the CEO Mark Zuckerburg stated that “we appear to have entered an economic downturn which will have a significant impact on the digital advertising industry”.
Amazon and Apple are the next two mega-caps to report earnings later today, do you think this trend will continue?
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