(Bloomberg) -- Facebook Inc., the world’s largest social media company, reported strong third-quarter revenue growth but gave a tepid forecast for sales in the current period, citing persistent headwinds from Apple Inc.’s restrictions on consumer data collection and uncertainty related to the post-pandemic economic recovery.Revenue for the recent period climbed 35% to $29 billion. That compared with the $29.5 billion average analysts’ estimate, according to data compiled by Bloomberg. Monthly active users for the flagship Facebook app rose to 2.91 billion, Facebook said Monday in a statement, while analysts had predicted 2.92 billion. Fourth-quarter sales will be $31.5 billion to $34 billion, less than the average estimate for $34.8 billion.
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Facebook has benefited over the past year from Covid-19-related lockdowns, which meant people were using the company’s many networks to keep up with loved ones and enjoy digital entertainment. With people spending more time online, advertisers shifted more of their budgets to Facebook and other social-media apps to reach customers. To help sustain that momentum, Facebook has been investing in new ways for businesses to communicate with and sell goods directly to customers.
Still, after warning for several quarters that business would be affected by Apple’s software update, the social network now may be feeling the brunt of that change, which gives users more control over how their online activity is tracked -- a critical tool Facebook uses for serving ads to precise groups.
It’s also grappling with the repercussions of a global slowdown in shipments of parts and consumer goods that is causing advertisers to pause some spending ahead of the holiday season, to avoid promoting wares they may not be able to deliver. Social media rival Snap Inc. last week warned investors about supply-chain issues hampering its own business during the December quarter, leading to concerns about other companies that rely on digital advertising for the bulk of their revenue.
Net income in the third quarter rose to $9.19 billion, or $3.22 a share, Menlo Park, California-based Facebook said, compared with the $3.17 a share analysts had projected. In the year-earlier period, earnings were $7.85 billion, or $2.71 per share.
Facebook said it bought back $14.4 billion worth of stock in the third quarter, and increased its repurchase authorization by $50 billion. The company’s shares, which rose 1.3% to $328.69 at the close in New York, rose about 3.8% in extended trading. The stock is up 20% for the year.
The company on Monday also said it will start breaking out financial results for Facebook Reality Labs, which includes the Oculus hardware division, next quarter. The move will enable Facebook to separate its main digital advertising business from its major investments in creating virtual worlds and let investors see the costs and revenue associated those efforts. The company will see a $10 billion reduction in operating profit this year for investments in Facebook Reality Labs, according to the statement.
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