Meta Platforms (NASDAQ: META) shares soared over 20% on Friday following the release of earnings and guidance that beat expectations. The tech giant also announced its first-ever dividend.
Meta has just announced its financial results for the fourth quarter. The company reported adjusted earnings per share (EPS) of $5.33, beating analysts’ expectations, and revenue of $40.11 billion, surpassing the predicted $39.01 billion. This marks a significant increase from the $32.2 billion reported in the same quarter last year.
Meta Platforms (NASDAQ: META) has also increased its stock buyback authorization by $50 billion and introduced a quarterly dividend of $0.50 per share. The tech giant forecasts revenue for the current quarter to be between $34.6 billion and $37 billion, exceeding analysts’ estimates of $33.6 billion.
Meta’s fourth-quarter advertising revenue reached $38.7 billion, surpassing the expected $37.8 billion. The company also reported 2.11 billion daily active users on Facebook, beating Wall Street’s forecast of 2.07 billion. Ad impressions rose by 21%, although the average price per ad fell by 2%.
Meta’s Reality Labs Struggles
Despite these successes, Meta’s Reality Labs division, responsible for bringing Mark Zuckerberg’s metaverse vision to life, incurred a loss of $4.65 billion in the fourth quarter, up from $4.3 billion in the same period last year. However, the division beat revenue expectations, reaching $1.07 billion compared to the anticipated $812 million.
The launch of Apple’s rival Vision Pro headset is expected to impact consumer interest in AR/VR headsets, potentially affecting Meta’s Quest line. Nonetheless, Meta’s Reality Labs initiatives have taken a backseat as investor focus shifts towards increased investments in generative AI. Mark Zuckerberg recently announced the company’s long-term strategy to develop general artificial intelligence and make it open source.
Financial Outlook for 2024
Looking ahead to 2024, Meta forecasts total expenses between $94 billion and $99 billion, rising payroll costs as the company expands its staff in higher-cost, technical roles amid its push into AI features.
In 2023, restructuring charges, including severance and facilities consolidation, amounted to $3.45 billion. As of December 31, 2023, Meta’s total number of employees stood at 67,317, which marks a notable 22% decrease from the previous year.
Despite challenges, Meta has witnessed significant stock growth, with shares rising by 121% over the last 12 months, outperforming competitors like Apple, Google, Microsoft, and Amazon.
Meta (NASDAQ: META) Stock Reaction
META stock surged 20.32% to close at $474.99 on Friday. The traders had exchanged hands with 84,513,754 (84.51 million) shares compared to the average daily trading volume of 16.46 million.
Edward Cooke is a financial analyst, freelance writer, and editor. He has six years of experience in financial journalism. He has an in-depth understanding of equities markets, tracking major indices and providing real-time analysis on stock price movements, corporate earnings, and market sentiment.
