Facebook’s shares lost nearly a quarter of their value on Wednesday after the company’s earnings for the April-June period missed market estimates, Bloomberg reported. The decline, just 7% after the earnings report was released, swell to 23% at one point as the company said it expects slow sales growth to continue for the rest of the year.
The April-June quarter saw new data laws being implemented in Europe and Facebook facing allegations of data breach. Profit margins will be hit for several years due to the costs of improving privacy safeguards and slowing use in the biggest advertising markets, the company said, according to Reuters.
The social media giant’s revenue rose 42% to $13.2 billion in April-June, against projections of $13.3 billion. This was the first time Facebook missed analysts’ revenue projections since 2015.
“We expect our revenue growth rates to decline by high single-digit percentages from prior quarters sequentially in both Q3 [July-September] and Q4 [October-December],” Chief Financial Officer David Wehner said.
Operating profit margin fell to 44% from 47% a year ago, and may sink to the “mid-30s” for more than two years, Wehner said. Operating profit margin is a measure of a company’s profitability.
The drop in share prices erased all gains made by Facebook’s stock since April.