META: Meta Stock Faces Massive Sell-Off After Q3 Earnings Miss

This article first appeared on GuruFocus.

Meta (NASDAQ:META) shares fell about 7% on early Thursday after the social media company reported weaker earnings due to a one-time, tax-related charge, even as quarterly revenue exceeded expectations.

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The company booked a $16 billion charge tied to a recently enacted U.S. tax bill, which weighed on the bottom line. Net income for the three months ended Sept. 30 dropped to $2.71 billion, or $1.05 per share, from $15.69 billion, or $6.03 per share, a year earlier. Meta said earnings would have been stronger without the charge.

Revenue climbed 26% to $51.56 billion, above Wall Street forecasts, helped by continued gains in advertising demand. Ad impressions rose 14%, while the average price per ad increased 10%. Daily Active People across Meta's apps reached 3.54 billion in September, up 8%.

Costs surged 32% to $30.71 billion as the company expanded spending on artificial intelligence systems and data centers.

Looking ahead, Meta expects capital expenditures of $70 billion to $72 billion next year, raising the lower end of its prior outlook. Fourth-quarter revenue is projected to range from $56 billion to $59 billion as the company continues building AI infrastructure to support future growth.

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