How is it going to big techs?

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Starting from Meta, Mark Zuckerberg’s company reported mixed results for the first quarter of 2022. On the one hand, Meta (FB) managed to meet market expectations for revenue. On the other hand, earnings per share were below consensus forecasts. As for the impact of Apple’s implementation of App Tracking Transparency (ATT), which requires apps to ask users for permission to use their mobile device data for advertising or other purposes, the loss would be $10 billion in 2022. The deciding factor for investors, however, was the increase in daily active users (DAU) to 1.96 billion, up 4% from last year. As a result, the tech giant’s stock is up more than 17% in the postmarket.

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Expectations vs Reality:

  1. Revenue: $27.9 billion versus expected $28.24 billion.
  2. Adjusted earnings per share: $2.72 versus expected $2.56.
  3. Advertising revenue: $27 billion versus expected $27.48 billion.
  4. Expenses: expected to cost between $87 and $92 billion in 2022, instead of the previously projected $90-95 billion.
  5. Prospects: the company said that revenue in the second quarter will be $28 to $30 billion, instead of the market forecast of $30.7 billion.

 

Talking about risks, the company faces competition from TikTok and Snap (SNAP). On top of that, Meta is still facing an antitrust lawsuit from the U.S. Federal Trade Commission (FTC). Recall that the regulator had previously asked to force the technology company to sell Instagram and WhatsApp, which it owns.

The second company on the list would be Twitter. First thing first, it should be noted that the IT giant has admitted that it overestimated its audience in 2019. According to the social network, this was due to an error that went unnoticed for almost three years. The difference after recalculation ranges from 1.4 million to 1.9 million users – just under 1 percent of the total. The only problem is that it happened before. In 2017, Twitter also reported that it had inflated its user data by 2 million visitors per quarter since 2014 because the scoring system mistakenly counted third-party app activity as unique users.

In terms of results, the company’s net income, surged to $513 million, thanks to a one-time gain from the $1 billion sales of its mobile advertising division, MoPub, to AppLovin. The company’s first-quarter revenue was $1.2 billion, well below Wall Street forecasts.

Finally, let’s talk about Apple.  According to some reports, the EU is preparing to charge Apple in an antitrust case that threatens the company with a hefty fine. The claims relate to technology that allows iPhone owners to pay at cash registers with their smartphones. Apple could face fines of up to 10% of worldwide turnover under such charges.

Presumably, Apple could be accused of unfairly blocking competitors’ access to its mobile payment system, which is used on hundreds of millions of iPhones. The claims are related to NFC technology, which allows users to pay for something by touching an iPhone to a payment terminal. The popularity of such payments has soared in recent years, in part because of the COVID-19 pandemic.

 

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