Business

Meta Stock Soars After Revenue Beat, Positive Outlook

Published

1 year ago

February 2, 2023

Meta Stock Soars After Revenue Beat, Positive Outlook

(CTN News) – After-hours trading for Meta shares jumped more than 17% Wednesday after the tech giant beat Wall Street’s revenue and user growth forecasts.

Moreover, Meta provided positive first quarter guidance and said expenses for the full year will be lower than expected.

Investors no longer expect Meta to grow at its old blockbuster pace.

In the same quarter the year prior, Brought in 4% less revenue, but it didn’t lose more than investors expected, so Wall Street responded positively.
Shareholders typically welcome a $40 billion stock buyback announced by Meta.

Facebook, Instagram, and WhatsApp reached 2 billion daily active users for the first time in December.

67 percent of users use the company’s apps every day.
Despite a historically tough year in 2022, Meta is still the world’s most popular social network.

For the full year, Meta expects to spend $1 billion more on restructuring costs.

Severance payments to laid-off employees and early termination fees contributed to those costs.

It’s still losing money on virtual and augmented reality.

It lost $4.27 billion last quarter, bringing its loss for the year to $13.71 billion. Last year, the unit made $2.15 billion, down from $2.27 billion in 2021.

Snapchat announced on Tuesday that its first-quarter revenue would fall 2%-10%. The company’s optimistic projections are an encouraging update.

Big picture: Wednesday’s earnings ended a year-long losing streak on Wall Street. In 2022, stock lost about 70% of its value.

Due to the slowdown in the ad market, investors were skeptical about how fast the company could build the metaverse.

Meta is focusing more heavily on artificial intelligence as a way to boost its advertising-based social media and messaging business.

CEO Mark Zuckerberg wants Meta to be a leader in generative AI and use it to generate images, videos, avatars, and 3D assets.
We were right to build these consumer products, focus on getting them to millions or billions of people, then focus on monetization beyond that,” he said.
As for future things that we do, including hopefully some of the new generative AI products or the next-generation metaverse stuff we’re doing, we’ll take the same approach.

Here’s what CNBC has to say:

Earnings: $1.76 a share
In its report, Refinitiv estimates that revenue will be $32.17 billion, compared to $31.53 billion expected
According to StreetAccount, there are 2 billion daily active users, compared to 1.99 billion expected
StreetAccount predicts 2.96 billion monthly active users, compared with 2.98 billion expected
ARPU (Average Revenue per User): $10.86 vs. $10.63 expected, based on StreetAccount