Thursday, December 2, 2021

Facebook Q3 Earnings and Updates

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Ruey L.
Full time trader, part time poker player.

Facebook 

Facebook (NASDAQ: FB) released their Q3 2021 earnings report yesterday. 

Here are the important figures;

  • Revenue: $29.01 billion versus $29.45 billion expected
  • Earnings per share: $3.22 versus $3.17 expected
  • Family daily active users: 2.81 billion versus 2.76 billion expected
  • Family monthly active users: 3.58 billion versus 3.51 billion expected

Controversies

A whistleblower, who was also a former employee sent documents to multiple news outlets stating that Facebook does not address the harms its services have caused to young girls although they were aware of them.

Mark Zuckerberg responded by labeling the action as a “coordinated effort to selectively use leaker documents to paint a false picture of our company.”

Facebook Reality Labs

This unit focuses on augmented reality and VR products and hardware and is going to report in its own segment starting from next quarter. Although the investment in this unit is expected to reduce the operating profit of Facebook by $10 billion this year, the “others” segment of Facebook has brought in a handsome $734 million in revenue which is way more than $477 million consensuses.

iOS Ads

Just like Snap, the changes that Apple made in regards to consumers tracking have had a great impact on these technology companies’ businesses, including Facebook. Snap’s shares prices shaved off more than a quarter of its value on its earnings report last week as the company put the blame on iOS changes.

The conversion rate drops and Facebook will rebuild their algorithms to work with less data, although that will take years to complete.

Recovering from the Pandemic

E-commerce growth has slowed down as more businesses resume their physical stores’ operations as the pandemic eases and lockdowns lifted.

Technical side of things

NASDAQ:H4 Chart

Facebook had a convincing trendline break back in mid-September. The stock price has been falling since then and is currently trading in a tight range between $320 and $340. $320 support level is still holding after the earnings report came out and the price had a little bump. However, both the 50 and 200 SMA are in the way of the bulls.

Will Facebook continue its climb higher with all the adversities they are facing? 

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