Apple’s ad-tracking ‘headwinds,’ according to Facebook, will slow growth

Apple’s ad-tracking ‘headwinds,’ according to Facebook, will slow growth

The social media giant said it faces “ad targeting headwinds in 2021 from regulatory and platform changes,” sending the shares down as much as 5.2% in extended trading.

(Bloomberg) — Facebook Inc. reported higher second-quarter sales and profit but struck a cautious tone looking ahead, saying growth could stall as Apple Inc.’s new rules pinch data collection on mobile devices and as pandemic-fueled advertising gains subside.

The warning came as the company reported quarterly sales climbed 56% to $29.1 billion, compared with the $27.9 billion average estimate of analysts, according to data compiled by Bloomberg. In a statement Wednesday, Facebook reported 1.91 billion daily active users for its flagship social network, just matching projections. The company’s user numbers in the U.S. and Canada were unchanged from the prior quarter.

The stock’s tumble reflects investor concern that Facebook’s robust sales growth and user additions during the pandemic may ease up as people spend less time on their phones and laptops. Facebook has been telling investors that Apple’s new restrictions on data collection on iPhones, which require users to explicitly allow app makers to track their activity, could curb future growth by hampering its ability to sell targeted advertising — a crucial Facebook tool that has given it an edge with large brands and small businesses looking to reach precise groups.

In the third quarter, “we will have a much better sense of how well Facebook has been able to adjust its core ad targeting products to manage the reduced amount of information it can tap into,” EMarketer analyst Debra Aho Williamson said.

The stock fell as low as $354 in extended trading following the report, after closing at $373.28 in New York. The shares have jumped more than 36% this year.

Net income in the second quarter more than doubled to $10.4 billion, or $3.61 a share, Facebook said. Analysts on average estimated profit would be $3.02 a share. In the same period last year, earnings were $5.18 billion, or $1.80 per share.

Story continues

Quote Lookup Symbol Last Price Change % Change
AAPLApple Inc. 144.98 -1.79 -1.22%
FBFacebook, Inc. 373.28 +5.47 +1.49%
GOOGAlphabet Inc. 2,727.63 -8.30 -0.30%
GOOGLAlphabet Inc. 2,721.88 +83.88 +3.18%
LYFTLyft, Inc. 55.77 +2.45 +4.59%
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