Meta shares jump more than 16% thanks to strong earnings, stock buybacks and a dividend plan

Meta Platforms (META) shares skyrocketed in early trading on Friday, rising more than 16% after the company reported better-than-expected earnings and guidance and announced new shareholder return initiatives.

For the fourth quarter, Meta reported adjusted earnings per share (EPS) of $5.33 on revenue of $40.11 billion. Analysts were expecting adjusted EPS of $4.94 on revenue of $39.01 billion, according to Bloomberg consensus data. The company reported revenues of $32.2 billion In the same quarter of last year.

The company also enhanced its stock repurchase authorization by $50 billion and began paying a quarterly dividend of $0.50 per share. In the current quarter, Meta said it expects revenues ranging from $34.6 billion to $37 billion, exceeding analysts' expectations that revenues would reach $33.6 billion.

Meta advertising revenue was $38.7 billion in the fourth quarter, beating expectations of $37.8 billion. The company also reported 2.11 billion daily active users on Facebook. Wall Street was expecting $2.07 billion.

The company reported that ad impressions increased by 21% compared to last year during this period, while the average ad price decreased by 2%.

However, Meta's Reality Labs are still a drag on the company. The division, tasked with turning Zuckerberg's vision for the business into reality, lost another $4.65 billion, up from the $4.3 billion the company lost in the same period last year. However, the division exceeded expectations in terms of revenue, exceeding $1.07 billion versus $812 million expected.

The launch of Apple's competing Vision Pro headset could spark a jump in consumer interest in AR/VR headsets and create a knock-on effect on the Meta's Quest headset lineup.

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But Meta's Reality Labs efforts have faded in investors' minds amid increased investments in generative artificial intelligence. In January, Zuckerberg announced in a post on Instagram Reels that the company's long-term strategy was to develop artificial general intelligence and make it open source.

There is no single definition of generative AI, but it is generally a type of AI that can think and learn like a human. In other words, he is able to understand many concepts rather than specializing in a specific field.

Meta founder and CEO Mark Zuckerberg speaks during a Meta Connect event at Meta headquarters in Menlo Park, California, on September 27, 2023. (Photo by Josh Edelson/AFP) (Photo by Josh Edelson/AFP via Getty Images)

Meta founder and CEO Mark Zuckerberg speaks during a Meta Connect event at Meta headquarters in Menlo Park, California, on September 27, 2023. (JOSH EDELSON/AFP via Getty Images) (Josh Edelson via Getty Images)

In 2024, Meta expects its total expenses to reach $94 billion-$99 billion, with the company noting, among other things, that payroll costs will rise this year as it adds more employees in high-cost technical roles amid its push toward AI features. .

Meta also revealed that in 2023, restructuring charges, including severance and facility consolidation, amounted to $3.45 billion. The company's headcount as of December 31, 2023, was 67,317, a decrease of 22% from the previous year.

Meta has been on a hot streak over the past 12 months, with shares up 121% over that period and outperforming the likes of Apple (AAPL), Google (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN).

In January, the company's market value once again exceeded $1 trillion.

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Daniel Holley He is the technology editor at Yahoo Finance. He's been covering the tech industry since 2011. You can follow him on Twitter @Daniel Holly.

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