Meta shares sink as Trump's Big Beautiful Bill charge wipes out earnings surge
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The news: Facebook parent Meta Platforms saw its shares plunge 7% in extended trading on Wall Street after reporting an 83% slide in third-quarter earnings.
The numbers: Meta reported Q3 diluted earnings per share (EPS) of USD1.05, down 83% from USD6.03 in the same period last year.
Third-quarter revenue came to USD51.24 billion, ahead of an estimated USD49.41 billion, according to LSEG data. Sales were up 26% year on year, marking the company's highest revenue growth since Q1 FY24.
The company expects fourth-quarter revenue to be in the range of USD56 billion to USD59 billion.
The context: Meta said that the implementation of US President Donald Trump’s One Big Beautiful Bill Act resulted in a one-time, non-cash income tax charge of USD15.93 billion. The company said it expects the act to result in “a significant reduction” in its US federal cash tax payments for the rest of 2025 and future years.
Excluding this one-off impact, diluted EPS would have increased by USD6.20 to USD7.25, compared to the recorded figure of USD1.05.
What they said: Meta said net income would have increased 19% to USD18.6 billion without the accounting impact.
"We had a strong quarter for our business and our community," said Meta founder and CEO Mark Zuckerberg.
"Meta Superintelligence Labs is off to a great start and we continue to lead the industry in AI glasses. If we deliver even a fraction of the opportunity ahead, then the next few years will be the most exciting period in our history."
The sources: Meta media release, Bloomberg
