Meta Platforms (NASDAQ: META) reported better-than-expected first-quarter results. However, a lukewarm second-quarter outlook dampened investor sentiment, resulting in a more than 10% drop in its stock during Thursday’s intraday trading.
Meta, the parent company of Facebook, recently reported its first-quarter financial results, beating analyst estimates for both revenue and earnings.
In the first quarter, Meta recorded revenue of $36.455 billion, surpassing analyst estimates of $36.156 billion. The tech giant also beat earnings estimates, with earnings per share (EPS) coming in at $4.71 compared to estimates of $4.33. Family daily active users reached 3.24 billion, marking a 7% year-over-year increase. Moreover, ad impressions rose by 20%, while the average price per ad saw a 6% year-over-year increase.
Mark Zuckerberg, founder and CEO of Meta, expressed satisfaction with the company’s performance, highlighting the progress made in advancing Meta AI. He stated,
“It’s been a good start to the year. The new version of Meta AI with Llama 3 is another step towards building the world’s leading AI. We’re seeing healthy growth across our apps and we continue making steady progress building the metaverse as well.”
Q2 2024 Outlook
Despite upbeat Q1 results, META stock encountered significant selling pressure, likely due to the company’s guidance. The tech giant forecasts second-quarter revenue to fall within the range of $36.5 billion to $39 billion, below analyst estimates of $38.3 billion.
Moreover, Meta lifted its 2024 expense outlook from $94 billion to $99 billion to a new range of $96 billion to $99 billion. The social media company also revised its capital expenditures forecast, now expecting it to range from $35 billion to $40 billion, up from the previous estimate of $30 billion to $37 billion. This revision reflects increased investments in infrastructure to support its AI roadmap.
Meta clarified its expectations for the future, noting that while it does not provide an outlook beyond 2024, it anticipates continued growth in capital expenditures as it aggressively invests in AI research and product development.
The company also cautioned that operating losses for its Reality Labs division are expected to “increase meaningfully” year-over-year.
Meta Platforms (NASDAQ: META) Stock Movement
At the time of this report, META stock stands at $441.38, indicating a 10.56% decrease from the previous trading session. This week, it has dropped in value by 12.04%. Trading activity has seen 82,527,122 (82.52 million) shares change hands, significantly higher than the average daily volume of 17.67 million.
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