Meta's Metaverse Division Loses $3.7 bn. in Q3, Expecting Losses to Rise in 2023
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FB's Parent Company Misses Revenue Estimates
FRL's overall loss was $3.7 billion, up from $2.8 billion during the second quarter. Additionally, the business predicted in a press statement that FRL's operating losses would increase "substantially" year over year in 2023. The statement read, beyond 2023, the business plan is to manage Reality Labs investments to accomplish the goal of increasing overall company operating income over the long run.
Despite expressing reservations about Meta's direction during the company's conference on Wednesday, CEO Mark Zuckerberg remained upbeat about the metaverse. He continued that ignoring the metaverse would be a mistake and predicted that it would have a significant influence in the future. He expressed optimism about Meta's Quest Pro VR headset and added that he anticipates that more workers will eventually be able to complete their tasks using virtual and mixed reality.
Meta Shares Plummet 15%
In Wednesday's after-hours trade, Meta shares dropped by over 15%. Over 60% of shares decreased this year. According to FactSet, Meta's adjusted quarterly profits per share for the third quarter fell short of the analyst average forecast of $1.90. However, the company's actual income of $27.7 billion exceeded expectations of $27.4 billion. With a range of $30 billion to $32.5 billion for Q4 sales, it fell short of the average estimate of $32.3 billion at its median of $31.25 billion.
Meta to Make Virtual Environment
Brad Gerstner, the director of the technology investment company Altimeter Capital and a shareholder in Meta, wrote a letter to Zuckerberg and the board of directors pushing the company to reduce its investment in light of the enormous bet Meta is making on its virtual environment.
Gerstner stated that the company's investment in an uncertain future is super-sized and alarming and may take up to ten years before its Metaverse begins to turn a profit. He suggested that the company concentrate on an artificial intelligence service since it can improve the company's performance.