Meta joined Alphabet and Microsoft in releasing disappointing quarterly financials, following the company’s Q2 earnings call. The disappointment of mega-cap stocks has continued for a week, as all the three have failed to meet revenue or earnings targets, and Meta experienced its first ever quarterly decline in sales.
Economic Slowdown
Due to the current global economic slowdown, markets had anticipated that earnings of mega-cap stocks which account for 40% of the Nasdaq, and 30% of the S&P 500 could face a bloodbath.
However, earnings disappointed and were worse than expected, but analysts believe that it could have been even more serious.
Recently, the International Monetary Fund (IMF), announced it would revise its global 2022 GDP forecast from 3.6% at April’s start to 3.2% now.
This seems to have been reflected in the earnings report released by three of the world’s largest tech companies.
Alphabet
Alphabet (the parent company to Google) was among the first companies this week to publish earnings figures, with results falling short of expectations.
According to the company, revenue increased 13% to $69.7 Billion in the second quarter. That was less than expected at $70.8 Billion.
The Q2 earnings were $1.21 per Share, which is less than the consensus estimate of $1.27 per Share for the quarter.
Microsoft
Microsoft was also disappointed in Q2, with disappointing earnings as well as revenue figures.
Bill Gates founded the company and reported earnings of $2.23 per share compared to general expectations for $2.29 per shares.
Quarterly revenue reached $51.87 billion. This was lower than what the analyst predicted at $52.44 trillion.
Meta
Finally, Meta (formerly Facebook) also revealed disappointing financial results in the second quarter.
They confirmed that revenue totaled $28.82 billion for April – June, which was marginally lower than the anticipated $28.94 billion.
The earnings per share were reported at 2.46, against expectations of $2.56. This was despite 1.97 billion daily active Facebook users rising to 1.95 billion, as expected.
Following the earnings call, CEO Mark Zuckerburg stated that, “We seem to have entered an economic downturn that will have a broad impact on the digital advertising business”.
Are Amazon and Apple the next mega-cap stock to announce their earnings today? Do you think this trend will continue?
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