Meta Drops 10% After Q2 EPS Misses by 14% on $3.6 Billion in Charges
Updated
Updated · Yahoo Finance · Aug 12
Meta Drops 10% After Q2 EPS Misses by 14% on $3.6 Billion in Charges
1 articles · Updated · Yahoo Finance · Aug 12
Summary
Meta shares fell 10.47% over the past month after Q2 EPS came in at $6.18, missing the $7.22 consensus and ending a six-quarter beat streak.
A $2.4 billion youth-related legal charge and $1.18 billion in severance from roughly 8,000 job cuts drove the miss, cutting operating margin to 31% from 43%.
Free cash flow plunged 91.31% to $784 million as quarterly capital spending reached $30.12 billion, while Meta also raised the low end of its FY2026 expense outlook to $165 billion-$169 billion.
Revenue still rose 27.96% year over year to $60.8 billion and slightly beat estimates, but investors focused on heavier AI spending and weaker profitability.
Wall Street remains broadly bullish despite the selloff: 55 of 62 analysts rate Meta a Buy, with the average price target at $756.95 versus a recent $599.12 share price.