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<\/a><\/p>\nMeta said revenue in the current period will be $27 billion to $29 billion, compared with the $30.3 billion analysts estimated on average. Changes to Apple\u2019s mobile software that require user permission to gather data for ad tracking are significantly crimping revenue by limited targeted advertising, Meta said.<\/p>\n
Sales are also taking a hit because Meta doesn\u2019t make as much money from Reels video clips as it does from other products, like News Feed and Stories. Still, executives painted an optimistic picture, saying Reels will one day make as much money as those other products.<\/p>\n
Net income in the fourth quarter was $10.3 billion, or $3.67 a share, Meta said, falling short of the $3.84 per share analysts projected. Revenue was $33.67 billion, compared with the $33.43 billion average estimate.<\/p>\n
Wednesday\u2019s earnings report was the company\u2019s first since changing its corporate name from Facebook late last year. When Meta announced the change, the move was criticized for being a distraction from the many problems Facebook has been asked by regulators to fix with its existing networks.<\/p>\n
But it\u2019s not just branding — resources and talent within Facebook have shifted to the new focus. Meta had said in October that it would see a $10 billion reduction in operating profit for the year because of investments in Reality Labs.<\/p>\n
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What Bloomberg Intelligence Says:<\/strong><\/p>\n \u201cThe new disclosure of the Reality Labs segment\u2019s operating loss of $10.2 billion for 2021 points to at least a 10 percentage-point drag on overall operating margin, which could get worse in the near to medium term.\u201d –Mandeep Singh, BI senior technology industry analyst<\/p>\n It was also the first financial report since Zuckerberg declared that attracting young people — 18- to 29-year-olds — was the company\u2019s new \u201cNorth Star.\u201d The company hasn\u2019t said how it plans to disclose its progress toward that goal, and there was little shared Wednesday to address this new push besides a heightened focus on Reels.<\/p>\n Young people, in particular, have been drawn to apps such as ByteDance Ltd\u2019s TikTok and Snap Inc\u2019s Snapchat, raising concerns within Meta. That was spotlighted by internal research and communications released by whistle-blower Frances Haugen last year, a trove of documents known as the Facebook Papers.<\/p>\n Meta doesn\u2019t regularly break down users by age. It also doesn\u2019t say how many people use Instagram or messaging service WhatsApp, or how much revenue those properties generate.<\/p>\n The company gets about 97% of its revenue from advertising on its social platforms. It warned again about the impact of recent changes to Apple\u2019s iOS software for iPhones, which requires that companies like Meta ask users for explicit permission to gather data about them. Early estimates show that most users decline this tracking, which makes targeted advertising – Facebook\u2019s main selling point to businesses – harder.<\/p>\n \u201cWe believe the impact of iOS overall is a headwind on our business in 2022, on the order of $10 billion,\u201d chief financial officer David Wehner said on the conference call.<\/p>\n Chief operating officer Sheryl Sandberg said the Menlo Park, California-based company is working on ways to help advertisers target people with messages that require less personal data.<\/p>\n \u201cThere are also a lot of things that small businesses and large businesses can do to take advantage of the many targeting and measurement tools we have,\u201d Sandberg said on the call.<\/p>\n
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