Facebook Parent Meta Platforms Reports First Ever Revenue Drop
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    HOUSE MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $1,471,287 (-0.47%)       Melbourne $953,578 (0%)       Brisbane $813,837 (+0.79%)       Adelaide $762,215 (+0.12%)       Perth $660,264 (+0.59%)       Hobart $715,003 (-0.87%)       Darwin $649,416 (+2.32%)       Canberra $938,596 (-3.12%)       National $942,992 (-0.51%)                UNIT MEDIAN ASKING PRICES AND WEEKLY CHANGE     Sydney $699,562 (+0.47%)       Melbourne $469,057 (-0.10%)       Brisbane $443,473 (-0.97%)       Adelaide $377,120 (+2.85%)       Perth $368,266 (+0.42%)       Hobart $549,709 (-0.61%)       Darwin $339,112 (+0.57%)       Canberra $492,401 (+2.61%)       National $493,098 (+0.45%)                HOUSES FOR SALE AND WEEKLY CHANGE     Sydney 8,253 (+355)       Melbourne 11,270 (+481)       Brisbane 8,990 (+21)       Adelaide 2,573 (+50)       Perth 8,017 (+44)       Hobart 886 (-7)       Darwin 252 (+5)       Canberra 876 (+38)       National 41,117 (+987)                UNITS FOR SALE AND WEEKLY CHANGE     Sydney 7,339 (+207)       Melbourne 6,852 (+127)       Brisbane 1,928 (+30)       Adelaide 437 (-33)       Perth 2,214 (+33)       Hobart 140 (+3)       Darwin 334 (-5)       Canberra 435 (+1)       National 19,679 (+363)                HOUSE MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $680 ($0)       Melbourne $500 ($0)       Brisbane $565 ($0)       Adelaide $530 (+$5)       Perth $570 (+$10)       Hobart $560 ($0)       Darwin $678 (-$3)       Canberra $700 ($0)       National $606 (+$1)                    UNIT MEDIAN ASKING RENTS AND WEEKLY CHANGE     Sydney $620 (+$3)       Melbourne $470 (+$10)       Brisbane $510 (+$10)       Adelaide $430 ($0)       Perth $500 (+$10)       Hobart $498 (+$13)       Darwin $560 (+$10)       Canberra $550 ($0)       National $523 (+$7)                HOUSES FOR RENT AND WEEKLY CHANGE     Sydney 6,511 (-206)       Melbourne 6,333 (-297)       Brisbane 4,007 (-126)       Adelaide 1,167 (-60)       Perth 1,654 (-51)       Hobart 274 (+2)       Darwin 144 (+2)       Canberra 710 (-5)       National 20,800 (-741)                UNITS FOR RENT AND WEEKLY CHANGE     Sydney 7,667 (-348)       Melbourne 5,301 (-243)       Brisbane 1,588 (-99)       Adelaide 402 (-13)       Perth 705 (-26)       Hobart 112 (+3)       Darwin 234 (-4)       Canberra 569 (-24)       National 16,578 (-754)                HOUSE ANNUAL GROSS YIELDS AND TREND       Sydney 2.40% (↑)      Melbourne 2.73% (↑)      Brisbane 3.61% (↑)      Adelaide 3.62% (↑)      Perth 4.49% (↑)      Hobart 4.07% (↑)        Darwin 5.42% (↓)     Canberra 3.88% (↑)      National 3.34% (↑)             UNIT ANNUAL GROSS YIELDS AND TREND       Sydney 4.61% (↑)      Melbourne 5.21% (↑)      Brisbane 5.98% (↑)        Adelaide 5.93% (↓)       Perth 7.06% (↓)     Hobart 4.71% (↑)      Darwin 8.59% (↑)        Canberra 5.81% (↓)     National 5.52% (↑)             HOUSE RENTAL VACANCY RATES AND TREND       Sydney 1.6% (↑)      Melbourne 1.8% (↑)      Brisbane 0.5% (↑)      Adelaide 0.5% (↑)      Perth 1.0% (↑)      Hobart 0.9% (↑)      Darwin 1.1% (↑)      Canberra 0.5% (↑)      National 1.2% (↑)             UNIT RENTAL VACANCY RATES AND TREND       Sydney 2.3% (↑)      Melbourne 2.8% (↑)      Brisbane 1.2% (↑)      Adelaide 0.7% (↑)      Perth 1.3% (↑)      Hobart 1.4% (↑)      Darwin 1.3% (↑)      Canberra 1.3% (↑)      National 2.1% (↑)             AVERAGE DAYS TO SELL HOUSES AND TREND       Sydney 42.5 (↑)      Melbourne 44.7 (↑)      Brisbane 46.7 (↑)      Adelaide 39.8 (↑)      Perth 45.7 (↑)      Hobart 43.3 (↑)        Darwin 40.7 (↓)     Canberra 47.9 (↑)      National 43.9 (↑)             AVERAGE DAYS TO SELL UNITS AND TREND       Sydney 43.8 (↑)      Melbourne 45.0 (↑)      Brisbane 45.7 (↑)      Adelaide 39.7 (↑)      Perth 47.4 (↑)      Hobart 51.1 (↑)      Darwin 61.3 (↑)      Canberra 44.6 (↑)      National 47.3 (↑)            
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Facebook Parent Meta Platforms Reports First Ever Revenue Drop

Social-media giant missed Wall Street’s sales expectation but added users—defying analysts’ projections.

By SALVADOR RODRIGUEZ
Thu, Jul 28, 2022 12:00pmGrey Clock 4 min

Facebook parent Meta Platforms Inc. posted its first decline in revenue and issued a muted outlook on digital advertising as it contends with growing competition from rival TikTok.

The company reported quarterly revenue of US$28.8 billion, down almost 1% from a year earlier and slightly below the US$28.9 billion Wall Street was expecting. It marks the first time that the company has posted a quarterly drop in revenue from the year earlier.

“We seem to have entered an economic downturn that will have a broad impact on the digital advertising business,” Chief Executive Mark Zuckerberg said Wednesday. “It’s always hard to predict how deep or how long these cycles will be, but I’d say that the situation seems worse than it did a quarter ago,” he said on an earnings call.

Meta is grappling with a digital advertising market in upheaval from surging inflation and other factors that are causing a slowdown in ad spending. Google parent Alphabet Inc. on Tuesday reported the slowest rate of growth since the second quarter of 2020, when the pandemic crimped demand for advertising in some areas. Rival Snap Inc. reported its weakest-ever quarterly sales growth last week while Twitter Inc. reported a decline in revenue.

Meta also disclosed that Facebook’s daily active user base rose to 1.97 billion users. The figure was 1.96 billion three months ago. The increase defied expectations of analysts surveyed by FactSet who thought user numbers would fall.

The company posted a net profit of US$6.7 billion for the second quarter, the third quarter in a row Meta’s bottom line has fallen. The company hasn’t experienced such a slump since the fourth quarter of 2012.

The weak advertising demand was reflected in Meta’s average price per ad, which fell 14% in the quarter. A year ago, the company reported an increase of 47%, year over year, for its average price per ad.

The company said it continued to face challenges in targeting ads as a result of changes made by Apple Inc. to the iPhone’s operating system. Chief Operating Officer Sheryl Sandberg, on her last earnings call before she departs Meta after 14 years, said the company is adapting its business to do better ad targeting—with less user data—with products such as click-to-message ads, which open a chat with a business whenever a user clicks on the ad.

Such ads are already a multibillion-dollar business growing at double digits, she said. “We are hugely optimistic about this area of our business, and I am very convinced it will work,” Ms. Sandberg said.

Chief Financial Officer David Wehner said the company, like others, is feeling the pinch from the strong dollar, which is weighing on the top line.

Meta’s shares have retreated since the company posted quarterly results in February that showed a sharper-than-expected decline in profit, gloomy revenue outlook and dip in daily users.

Meta’s stock closed more than 6% higher and fell more than 4% after hours following the results.

The company also said it expects its total expenses for 2022 to be between US$85 billion and US$88 billion, down from the company’s previous outlook of US$87 billion to US$92 billion. The company attributed the lowered forecast to a reduction in hiring and overall expense-growth plans for the year.

Mr. Zuckerberg repeated that the company plans to slow the pace of long-term investments and steadily reduce head-count growth over the next year.

“This is a period that demands more intensity,” Mr. Zuckerberg said. “And I expect us to get more done with fewer resources.”

Meta is going through a period of transition. Mr. Zuckerberg in April said the company would change how users would see content, in a bid to boost engagement. The company would use artificial intelligence to recommend content to Facebook and Instagram users from around those social networks, rather than solely showing users content from accounts they already follow. The effort mimics one of the signature features of rival TikTok, which Mr. Zuckerberg in February said posed stiff competition for Meta.

Nearly one in six posts shown on Facebook and Instagram feeds are now coming from accounts that users don’t follow and are based on artificial intelligence recommendations, according to stats shared by Mr. Zuckerberg. That could rise to nearly one in every three posts shown to users coming from accounts they don’t follow by the end of 2023.

During the quarter, Meta saw a 30% increase in the time that users are engaging with Reels, the company’s answer to TikTok short-form videos, Mr. Zuckerberg said Wednesday.

Meta, however, doesn’t yet monetize Reels at the levels of some of its other features.

“In the near term, the faster that Reels grows, the more revenue that actually displaces from higher monetizing surfaces,” Mr. Zuckerberg said. “In theory, we could mitigate the short-term headwind by pushing less hard on growing Reels. But that would be worse for our products and business longer term.”

Mr. Zuckerberg added that Reels ads are on pace to generate US$1 billion in annual revenue.

Earlier this year, Meta said it planned to slow the pace of some of its long-term investments and adjust hiring plans. In May, the company disclosed a sharp slowdown in hiring, and in June, the company’s head of engineering told his managers in an internal memo to identify and report low performers so they could force those employees out. Earlier this month, the company let go of 368 contractors, including several custodial staff, at its Menlo Park, Calif., headquarters.

The company on Tuesday also said it planned to raise the price of its Quest 2 virtual-reality headset by nearly 34% to US$399.99, citing a rise in the costs to make and ship the products.

The company’s Reality Labs division, which includes VR hardware, posted revenue of US$452 million. Analysts expected it to generate US$431 million in quarterly sales.

Separately, the Federal Trade Commission said Wednesday it is seeking to block Meta from acquiring Within Unlimited Inc. and its virtual-reality dedicated fitness app, Supernatural. The deal, the FTC alleges, would lessen competition in the market and violate antitrust laws. Meta rejected the FTC’s position and said the purchase would be good for the development of the virtual-reality market.

The company also announced that come November, Mr. Wehner will transition into chief strategy officer, a new role at the company. Succeeding him as CFO will be Susan Li, Meta’s current vice president of finance. Mr. Wehner has served as Meta’s CFO since June 2014.

Reprinted by permission of The Wall Street Journal, Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: July 28, 2022.

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In a decision that will surprise few economists – or borrowers –  the RBA announced a further 0.25 percent rise in interest rates when it met earlier this afternoon. This brings the current interest rate up to 3.35 percent, a 3.25 percent increase since May last year.

Prior to today’s announcement, when the interest rate was still 3.1 percent, research by Roy Morgan released at the end of last month revealed that 23.9 percent of Australian mortgage holders were ‘at risk’ of mortgage stress in the three months to December 2022. Mortgage stress is where one third or more of weekly household income is going towards mortgage repayments.

In a tight rental market, mortgage pressure has also lead more landlords to pass rate rises onto tenants.

Research director at CoreLogic, Tim Lawless, says the latest rate rise moves beyond the ‘serviceability assessments’ some borrowers passed when applying for their loans.

“Since October 2021, lenders have assessed new borrowers on their ability to service a mortgage under an interest rate scenario that is at least 300 basis points above their origination rate,” he said. “The latest lift in the cash rate will push these recent borrowers beyond their serviceability tests.  

“Considering most lenders were showing mortgage arrears to be around record lows last year, it’s likely some evidence of rising mortgage stress will start to emerge in 2023 under such substantially higher interest rate settings, with the potential for a more noticeable lift as further fixed rate borrowers migrate over to variable mortgage rates.”

Today’s decision signals the RBA’s continued efforts to use the cash rate to manage inflation, which sits at 7.8 percent annually. Time will tell whether it has been successful in curbing spending or whether, as many predict, there are more rate rises on the way. Mr Lawless said overseas economies could offer some hope to borrowers.

“Global inflationary pressures are easing, and domestically, a relatively weak December retail spending result could be the first clear sign that consumers are reigning in their spending,” he said.  “Additionally, the housing component of CPI, which has the largest weight of any sub-group, dropped sharply through the final quarter of 2022, albeit from the highest level since the mid-1990s (outside of the impact from the introduction of GST in 2000).

“Mainstream forecasts for the cash rate reflect the uncertainty around inflation outcomes, ranging from the RBA holding the cash rate at 3.35 percent, through to another 75 basis points of hikes.  However, a recent survey from Bloomberg puts the median forecast at 3.6 percent, implying one more hike of 25 basis points in the wings.”

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