April 15, 2024
Meta shares jump over 16% on solid earnings, stock buyback and dividend plan

Shares of Meta Platform (META) surged in early trading Friday, climbing more than 16% after the company posted better-than-expected earnings and guidance and announced a new shareholder returns initiative.

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 had reported revenue of $32.2 billion in the same quarter last year.

The company increased its stock buyback authorization to $50 billion and initiated a quarterly dividend of $0.50 per share. For the current quarter, Meta said it expects revenue of between $34.6 billion-$37 billion, above analysts’ expectations of revenue of $33.6 billion.

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

The company reported that ad impressions during the period increased 21% compared to the previous year, while the average cost per ad fell 2%.

However, Meta’s Reality Labs remains a burden on the company. The division, which is tasked with turning Zuckerberg’s vision of the metaverse into reality, lost another $4.65 billion, more than the $4.3 billion the company lost on the effort in the same period last year. Nevertheless, the division beat expectations in terms of revenue, reaching $1.07 billion, compared to the forecast of $812 million.

The launch of Apple’s rival Vision Pro headset could increase consumer interest in AR/VR headsets and create a knock-on effect for Meta’s Quest line of headsets.

But amid growing investment in generic AI, Meta’s Reality Labs’ efforts have taken center stage in the minds of investors. In January, Zuckerberg announced in an Instagram Reels post that the company’s long-term strategy is to develop general artificial intelligence and make it open source.

the story continues

There is no single definition of Generative AI, but broadly speaking, it is a type of AI that can think and learn like humans. In other words, it is being able to understand many concepts rather than specializing in a certain area.

Meta shares jump over 16% on solid earnings, stock buyback and dividend plan

Meta Founder and CEO Mark Zuckerberg speaks during the Meta Connect event at Meta headquarters in Menlo Park, California on September 27, 2023. (Josh Adelson/AFP via Getty Images) (Josh Adelson via Getty Images)

In 2024, Meta expects its spending to total $94 billion-$99 billion, with the company noting, among other things, that payroll costs will increase this year as it looks to hire higher-cost, technical roles amid an emphasis on AI features. Adds more employees.

Meta also revealed that restructuring charges in 2023, including severance and consolidation of facilities, totaled $3.45 billion. The company’s employee strength as of December 31, 2023, was 67,317, which is 22% less than the previous year.

Meta has been bullish over the past 12 months, with shares up 121% over that period and outperforming Apple (AAPL), Google (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN). The demonstration has taken place.

In January, the company’s market capitalization once again crossed the $1 trillion mark.

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Daniel Hawley is a technology editor at Yahoo Finance. He has been covering the tech industry since 2011. You can follow him on Twitter @DanielHawley,

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Source: finance.yahoo.com

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