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Meta Inc (META) Revenue Report Expectations Rise

It’s that season when investors are eyes on major companies operating across the globe as they release their financial reports. 

With a looming recession, raging inflation, an energy crisis, and a Euro that has fallen to near parity with the dollar, investors are turning to fiscal year earnings for guidance.

As companies continue to report earnings this week, here’s what market analysts expect in the upcoming briefs.

Meta Inc.

For the second quarter of 2022, Meta anticipates overall revenues of between $28 billion and $30 billion.

According to research analysts’ estimate, the second-quarter revenues will be $28.82 billion, down 0.87 percent from the reported figures for a similar period last year.

The $2.51 per share average estimate for second-quarter earnings has not moved over the previous 30 days. 

This indicates a reduction of 30.47 percent from what was reported in the same quarter last year.

During the past four quarters, the company’s earnings exceeded the analysts estimate, while in the other, they fell short, with an average surprise of 5.99 percent.

Facebook, Instagram, Messenger, and WhatsApp, which are part of Meta’s Family of Apps, are facing stiff competition from the likes of TikTok and Snap SNAP for advertising dollars. In the NFT market, Meta and Twitter TWTR are becoming more and more competitive.

Additionally, the ban on Instagram and Facebook in Russia is expected to have hurt the user and advertising revenue growth in the upcoming quarter.

It’s worth noting that Russia accounted for 1.5 percent of Meta’s advertising budget.

Snapchat, a flagship platform, reaches 75% of the 13-34-year-old population in the United States, making it more popular than Meta’s Facebook and Instagram in this target audience.

These factors are likely to harm Meta’s year-over-year advertising revenue growth rate in the second quarter of 2022.

By launching a tool to showcase and sell NFTs on its platform, Twitter has surpassed Meta as the first social media giant to enter the NFT marketplace.

Due to the current global macroeconomic environment, geopolitical unrest, rising inflation, and U.S. Federal Reserve interest rate hikes, META is experiencing its worst decline ever.

Rising inflation is likely to have damaged businesses’ ad spending revenues, which could have affected Meta’s ad revenues in the upcoming quarter.

The company’s Reality Labs activities were funded by ad revenues, which in the first quarter of 2022 made up 99.2% of all revenues and may have suffered significantly in the to-be-reported quarter.

The capacity of Meta to monitor patterns in user activity has been hampered by changes made by Apple AAPL to its iOS.

Ad targeting has become more challenging due to Apple’s iOS modifications, raising the cost of driving results. 

The measurement of these results has likewise become challenging. In the second quarter and into 2022, Meta anticipates that these factors will impede advertising growth.

Ad Revenues

About 96.7 percent of Meta’s first-quarter revenues were from advertising, which climbed 6.1 percent year over year to $27 billion. 

Growth is expected to be muted in the following quarter, though.

Meta anticipates a 3 percent headwind in foreign exchange rates in the second quarter of 2022, which reflects volatility brought on by the ongoing conflict.

From an earlier expectation of $90-$95 billion, Meta has reduced its expenses for the to-be-reported quarter to $87 billion to $92 billion.

Meta slowed its investments in certain Reality Labs projects in the second quarter, costing the company a lot of money as revenues from its primary source decreased.

The company has been diversifying its investments in creating specific AI infrastructure that will eventually fuel revenue growth throughout the Metaverse and the ad industry. 

This is anticipated to have helped lower operational costs and may have encouraged the expansion of the bottom line in the second quarter.

Shopify Inc.

Shopify Inc. is expected to report earnings before the market opens on July 27, 2022. The report covers the fiscal quarter that ends in June 2022. 

The analysts EPS forecast is $-0.1 and is based on analysts’ forecasts. Last year, the reported EPS for the same quarter was $0.15.

McDonald’s Corporation

On July 26, 2022, before the market opens, McDonald’s Corporation reported its financial results. 

During second-quarter 2022, McDonald’s reported adjusted earnings per share (EPS) of $2.55, surpassing analysts’ estimate of $2.45 by 4.1%. In the prior-year quarter, McDonalds had reported an adjusted EPS of $2.37.

Quarterly net revenues of $5,718.4 million missed the analysts consensus mark of $5,860 million by 2.4%. The top line dropped 3% year over year.

PayPal Holdings, Inc.

On August 2, 2022, after the market close, PayPal Holdings, Inc. is anticipated to announce earnings. 

The report will cover the financial quarter ending in June 2022. According to investment research analysts, the consensus EPS expectation for the quarter is $0.54 and is based on 15 analysts’ predictions. 

For the same quarter the previous year, there was a reported EPS of $0.88.

Boeing Company

Boeing Company (The) is anticipated to release earnings on July 27, 2022, before the market opens, for the financial quarter ending in June 2022. 

The consensus EPS expectation for the quarter is $-0.08. For the same quarter a year ago, the reported  EPS was $0.4.

Boeing had predicted the need for 2.1 million new employees in the commercial aviation industry and improved training.

Barclays PLC

Barclays PLC is expected on July 27, 2022, to release earnings. The algorithm used to determine the forthcoming earnings date is based on the historical reporting dates for the company. 

After the business announces the results, the actual earnings date may be updated. 

If analysts’ forecast is anything to go by, the consensus EPS expectation for the quarter is $0.39.

For the same quarter the previous year, there was a reported EPS of $0.69.

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  • Zahari Rangelov

    Zahari Rangelov is an experienced professional Forex trader and trading mentor with knowledge in technical and fundamental analysis, medium-term trading strategies, risk management and diversification. He has been involved in the foreign exchange markets since 2005, when he opened his first live account in 2007. Currently, Zahari is the Head of Sales & Business Development at TraderFactor's London branch. He provides lectures during webinars and seminars for traders on topics such as; Psychology of market participants’ moods, Investments & speculation with different financial instruments and Automated Expert Advisors & signal providers. Zahari’s success lies in his application of research-backed techniques and practices that have helped him become a successful forex trader, a mentor to many traders, and a respected authority figure within the trading community.