The social network company Snapchat
SNAP INC
+3.47%
closure:0
opening:11.26
High:11.5
low:11.18
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(NYSE: SNAP) will report after the close of trading in the US its results for the last quarter of the year. The company’s investors hope to see some improvement in the reports, after the disappointing reports of the last quarter.
In fact, 2022 as a whole was not a good year for the company and the stock. Since Apple announced the privacy policy changes of its operating system theIOS, in 2021. The change in Apple’s policy included, among other things, an obligation to require users of the application on Apple’s devices to approve tracking of advertisements by affiliate networks and various factors that the public uses. As you know, many applications use tracking of the advertisements they distribute in the application itself in order to understand if those advertisements encourage an increase in product sales or registration for their application. Against the background of this demand, many users blocked-removed the tracking option and this hurt revenues.
In addition to this, many companies cut their advertising expenses in the past year due to fears of an imminent recession as well as due to the increase in interest rates that has afflicted most countries of the world in recent months. These interest rates are felt on the financing side and reduce profits. At a time like this, companies cut back on expenses, and it’s easiest to cut down on marketing and advertising expenses.
Yesterday, the stock rose about 1.7% to a closing price of about $11.09. The company fell by about 66% during the last 12 months, but corrected in January by 24%.
Wall Street now expects a loss GAAP of about 11 cents per share but what is important is the adjusted profit (Non Gap) where the anarchists expect a profit of 11 cents per share. Wall Street also expects a very modest increase in revenue of about 1% over the previous year to $1.31 billion. The company’s sales increased by about 5.7% in the third quarter compared to the corresponding quarter last year.
Also, the market estimates that these Snapchat reports will also give direction to the reports of Meta, Facebook’s parent company, and Pinterest, which are expected to publish their reports this Wednesday and next Monday respectively. Regardless, these companies also have challenges that may only affect them.
In August, Snapchat announced that it would lay off close to 20% of its employees in order to save costs following slower than expected growth in profits. The company also announced that it is now mainly concentrating on increasing the number of users, increasing revenues and using augmented reality – Augmented Reality.
Many analysts in the market maintain their buy recommendation for the stock despite the weak reports in the past, as they believe in the company’s chances of generating better profits from the services the company offers in the future. Snapchat is, after all, one of the most significant social networks out there.
The same analysts claim that they are indeed disappointed by the decrease in American consumer spending in December, but do not believe that the changes in Snapchat’s report will be as violent as they were in the past.
In the third quarter report, Snapchat reported that it missed the revenue forecast for the quarter when it brought in $1.13 billion in the quarter, below analysts’ expectations of $1.14 billion. In the bottom line, the company recorded profits based on NON-GAAP of about 8 cents per share, above the market’s expectations of a loss of about 1 cent per share. On the other hand, the company reported an 11% decrease in revenue per user, which was about $3.11. the company did not deliver forecasts for the fourth quarter, as it did not in the second quarter.
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