Investing.com -- Meta Platforms Inc (NASDAQ:META) reported third-quarter results that topped Wall Street expectations and stronger guidance for the current quarter as cost cuts boosted margins.
While Meta Platforms shares rose more than 4% in after-hours trading following the report, the stock turned negative after the management said on the earnings call that brand advertising demand softened at the beginning of Q4.
"While we don't have material direct revenue exposure to Israel and the Middle East, we have observed softer ad spend in the beginning of the fourth quarter, correlating with the start of the conflict, which is captured in our Q4 revenue outlook," CFO Susan Li said on the call.
At 05:20 EDT (10:20 GMT), Meta stock was down 2.5%.
Meta reported adjusted EPS of $4.39 on revenue of $34.15 billion. Analysts polled by Investing.com anticipated EPS of $3.64 on revenue of $33.57B.
Total costs and expenses were $20.40 billion, a decrease of 7% year-over-year, boosting operating margin to 40% in Q3 from 20% a year earlier.
Advertising revenue jumped 24% to $33.64B from $27.24B.
Facebook daily active users, or DAUs, rose 7% to 3.14B, while monthly active people, or MAUs, rose 3% to 3.05B.
Looking ahead, the company said it expects third-quarter revenue to be in the range of $36.5B to $40B, beating estimates for $38.84B.
Oppenheimer analysts reiterated their bullish view on Meta on "3Q's continued revenue outperformance and cost control, despite conservative low end of 4Q guide on Middle East."
Goldman Sachs analysts continue to "see META as well-positioned against several long-term secular growth themes and are encouraged by the positive momentum across key product initiatives incl. Reels, click-to-messaging Ads and AI including Advantage+ adoption."
"We reiterate our view that management’s ”year of efficiency” theme continues to drive a sustained mentality shift inside the company while long-term investments behind key objectives remain a focus area (incl. AI, infrastructure & talent)," they wrote in a note.
Additional reporting by Senad Karaahmetovic