The Facebook parent company Meta had to accept a significant slowdown in its sales growth in the first quarter and does not expect any recovery in the coming months.

However, the financial results presented on Wednesday after the close of trading also contained some good news.

After Facebook lost users for the first time in its history in the final quarter of 2021, this time there was an increase again.

Roland Lindner

Business correspondent in New York.

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The bar had been set low for the Internet giant, having warned three months ago that its business would slow down significantly.

In this respect, the financial markets were relieved, the share price rose in after-hours trading by more than 18 percent at times.

However, Meta stock had previously lost almost 50 percent of its value since the start of the year, and the stock market value has slipped below $500 billion.

Warning of a drop in sales in the second quarter

Overall, Meta reported a 7 percent increase in sales to $27.9 billion for the past three months.

Analysts had expected an average of $28.2 billion, and in the final quarter of 2021 growth was still 20 percent.

For the second quarter, the company even warns of a possible drop in sales and predicts 28 billion to 30 billion dollars, compared to 29.1 billion dollars in the previous year.

Chief Financial Officer David Wehner said in a conference call that the advertising business has continued to weaken just after Russia's invasion of Ukraine, and that this will probably have a negative impact in the second quarter.

Facebook has also been blocked in Russia, and the company no longer shows ads from Russian clients anywhere in the world.

But Meta also struggles with challenges beyond the war.

For example, Apple's new data rules, which came into force last year, are causing problems for the company.

This hampers the collection of user data on Apple devices, making it more difficult for Meta to tailor ads to individual users and measure the success of ad campaigns.

Three months ago, Wehner said it would cost Meta $10 billion this year.

He didn't put a specific number on the impact for the first quarter, but he did admit that it will continue to make itself felt.

Three months ago, in view of the declining number of users, Meta also spoke of increased competition from the smartphone app Tiktok, which is primarily known for short videos.

The group has developed a similar offer called "Reels", which is now available both on the regular service Facebook and for Instagram.

CEO Mark Zuckerberg said Reels now accounts for more than 20 percent of the time users spend on Instagram.

With a view to the current difficulties, the Meta boss said: "The issues we face will not be solved overnight." The group wants to continue investing, for example in activities related to the Metaverse, but in view of the weakened growth he cut his costs.

Meta now expects costs of $87 billion to $92 billion this year, up from $90 billion to $95 billion.

In the past quarter, higher costs still weighed heavily on profitability.

Net income fell 21 percent to $7.5 billion.

However, earnings per share of $2.72 were 16 cents higher than expected.

The number of daily Facebook users increased from 1.93 billion to 1.96 billion in the past three months.

Only in Europe was there a slight drop, which Facebook attributed to the war.