Shares of Meta spiked more than 18% in after-hours trading after the company beat its fourth-quarter revenue estimate, delivering a jolt of good news after a dismal year for the company in 2022.
Meta Platforms shares spiked in late trading Wednesday after the company disclosed fourth quarter financial results and announced a new round of cuts to its 2023 spending plan.
In another shareholder friendly move, the Facebook parent is taking a more aggressive approach to buying back stock. The company said it bought back $6.91 billion of stock in the latest quarter, bringing the full year total to $27.93 billion. The company said its board approved a new $40 billion buyback authorization, in addition to $10.87 billion remaining on its previous repurchase program.
“We’re going to be more proactive about cutting projects that aren’t performing or may no longer be as crucial,” Zuckerberg said in the earnings call. “But my main focus is on increasing the efficiency of how we execute our top priorities.”
Meta has now reported declining revenue in three consecutive quarters, as the company grapples with drops in online advertising spending and increased competition from TikTok—issues that have taken tolls on other U.S. social media companies. Meta’s stock plummeted last year as CEO Mark Zuckerberg prioritized the company’s focus on the metaverse, which he has repeatedly billed as a revolutionary, immersive online experience. But his vision has largely failed to impress investors, as the company’s metaverse-centered Reality Labs unit lost more than $9 billion in the first three quarters of 2022 and Zuckerberg’s demonstrations of the metaverse were widely mocked. Meta cut around 11,000 jobs—13% of its workforce—in November and extended a hiring freeze through the start of 2023 as cost-cutting measures.
- The company reported 2 billion daily active users—an increase of 4% year-over-year and more than the 1.99 billion expected.
- Meta reported revenue of $32.2 billion in the fourth quarter, 4.5% less than the $33.7 billion reported in the same period last year but above the roughly $31.5 billion analysts were forecasting.
- Meta stock futures spiked 18% immediately after the announcement; shares have plunged 53% over the past year, far more than the tech-heavy Nasdaq’s 19% decline.
The company is projecting first-quarter revenue of between $26 billion and $28.5 billion, about in line with the Wall Street consensus of $27.1 billion, and down about 2.4% from a year at the mid-point of the range.
Meta posted strong growth in user metrics. Daily active people, a measure of users across the company’s social networks, which include Facebook, Instagram, and WhatsApp, were 2.96 billion in December, up 5% from a year ago. Monthly actives were 3.74 billion, up 4%. The company also said Facebook daily active users hit 2 billion for the first time, up 4% from a year ago.
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