Facebook-parent Meta forecasts revenue below estimates

Meta Platforms Inc on Wednesday forecast current quarter revenue below estimates after the Facebook-parent recorded its first ever quarterly drop in revenue, amid a general weakness in the digital ad market.

Shares of the Menlo Park, California-based company were down about 5% in extended trading.

The company said it expects third-quarter revenue of between $26 billion and $28.5 billion. Analysts were expecting $30.52 billion, according to IBES data from Refinitiv.

Meta's earnings further underscored an inflation-induced slowdown in the digital ad industry, which has been booming for decades as companies tapped the power of the internet to reach consumers.

Meta has been trying to fend off a string of challenges to its business, including stiff competition from TikTok and Amazon.com Inc for ads and a revenue hit from Apple's privacy changes to mobile operating system iOS.

For the second quarter ended June 30, Meta said total revenue, the bulk of which comes from ads, fell to $28.82 billion from $29.08 billion a year earlier.

Net income fell to $6.69 billion, or $2.46 per share, from $10.39 billion, $3.61 per share, a year earlier.