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The company expects total revenues between $32 billion and $34.5 billion for the third quarter of 2023. Favorable forex is expected to aid year-over-year top-line growth by roughly 3%.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $33.43 billion, indicating an increase of 20.62% from the year-ago quarter’s reported figure.
The consensus mark for earnings stands at $3.57 per share, up by 1.13% over the past 30 days, suggesting growth of 117.68% from the figure reported in the year-ago quarter.
Meta’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 18.99%.
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
Meta’s third-quarter top line is expected to have benefited from Facebook’s expanding user base (more than 3.03 billion daily active users) and growing adoption of reels. Higher engagement level is helping to steady its user growth across all regions, particularly Asia Pacific.
Our model estimate for Asia Pacific Daily Active Users (DAUs) in the third quarter is pegged at 894 million, indicating 5.8% year-over-year growth, the fastest among the regions followed by the Rest of World, which we expect to grow 4.1% to 664 million DAUs.
Regarding Monthly Active Users (MAUs), our estimate for Asia Pacific is pegged at 1.347 billion, suggesting 2.7% year-over-year growth. The Rest of World MAUs are expected to grow 3.4% to 1.004 billion MAUs.
Increased engagement for Meta’s offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver. Effective usage of artificial intelligence has been helping the company keep its users engaged.
Our model estimate for Meta’s worldwide DAU is pegged at 2.060 billion, indicating 3.8% growth year over year. MAU is pegged at 3.021 billion, indicating a 2.1% year-over-year increase.
Nevertheless, Meta’s top line is expected to reflect the negative impact of the challenging macroeconomic environment and high inflation that is anticipated to have kept ad spending budgets under pressure. This is likely to have weighed on ad revenues in the to-be-reported quarter.
The company’s ad revenue business is facing a decline in growth due to ad targeting-related headwinds created by Apple’s (AAPL - Free Report) iOS changes.
Apple’s iOS changes have made ad targeting difficult, which has increased the cost of driving outcomes. However, measuring these outcomes is tough.
In the second quarter of 2023, Meta’s ad revenues represented 99.3% of total revenues, which increased 11.9% year over year to $31.5 billion.
Our estimate for third-quarter 2023 ad revenues is pegged at $32.37 billion, indicating 18.8% year-over-year growth.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the exact case here.
Meta has an Earnings ESP of +3.98% and currently has a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are a few other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings in their upcoming releases:
Image: Bigstock
Meta Platforms (META) to Report Q3 Earnings: What to Expect
Meta Platforms (META - Free Report) is set to report its third-quarter 2023 results on Oct 25.
The company expects total revenues between $32 billion and $34.5 billion for the third quarter of 2023. Favorable forex is expected to aid year-over-year top-line growth by roughly 3%.
The Zacks Consensus Estimate for third-quarter revenues is pegged at $33.43 billion, indicating an increase of 20.62% from the year-ago quarter’s reported figure.
The consensus mark for earnings stands at $3.57 per share, up by 1.13% over the past 30 days, suggesting growth of 117.68% from the figure reported in the year-ago quarter.
Meta’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average surprise being 18.99%.
Meta Platforms, Inc. Price and EPS Surprise
Meta Platforms, Inc. price-eps-surprise | Meta Platforms, Inc. Quote
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
Meta’s third-quarter top line is expected to have benefited from Facebook’s expanding user base (more than 3.03 billion daily active users) and growing adoption of reels. Higher engagement level is helping to steady its user growth across all regions, particularly Asia Pacific.
Our model estimate for Asia Pacific Daily Active Users (DAUs) in the third quarter is pegged at 894 million, indicating 5.8% year-over-year growth, the fastest among the regions followed by the Rest of World, which we expect to grow 4.1% to 664 million DAUs.
Regarding Monthly Active Users (MAUs), our estimate for Asia Pacific is pegged at 1.347 billion, suggesting 2.7% year-over-year growth. The Rest of World MAUs are expected to grow 3.4% to 1.004 billion MAUs.
Increased engagement for Meta’s offerings like Instagram, WhatsApp, Messenger and Facebook has been a major growth driver. Effective usage of artificial intelligence has been helping the company keep its users engaged.
Our model estimate for Meta’s worldwide DAU is pegged at 2.060 billion, indicating 3.8% growth year over year. MAU is pegged at 3.021 billion, indicating a 2.1% year-over-year increase.
Nevertheless, Meta’s top line is expected to reflect the negative impact of the challenging macroeconomic environment and high inflation that is anticipated to have kept ad spending budgets under pressure. This is likely to have weighed on ad revenues in the to-be-reported quarter.
The company’s ad revenue business is facing a decline in growth due to ad targeting-related headwinds created by Apple’s (AAPL - Free Report) iOS changes.
Apple’s iOS changes have made ad targeting difficult, which has increased the cost of driving outcomes. However, measuring these outcomes is tough.
In the second quarter of 2023, Meta’s ad revenues represented 99.3% of total revenues, which increased 11.9% year over year to $31.5 billion.
Our estimate for third-quarter 2023 ad revenues is pegged at $32.37 billion, indicating 18.8% year-over-year growth.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the exact case here.
Meta has an Earnings ESP of +3.98% and currently has a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Other Stocks to Consider
Here are a few other companies worth considering, as our model shows that these, too, have the right combination of elements to beat on earnings in their upcoming releases:
GoDaddy (GDDY - Free Report) has an Earnings ESP of +14.09% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
GoDaddy shares have gained 0.2% year to date. GDDY is set to report its third-quarter 2023 results on Nov 2.
Pinterest (PINS - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank #1.
Pinterest shares have gained 16.8% year to date. PINS is set to report its third-quarter 2023 results on Oct 30.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.