Metaplatform actions (META) soared in early trading Friday, climbing 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 revenue of $32.2 billion same quarter last year.
The company also increased its stock repurchase authorization by $50 billion and initiated a quarterly dividend of $0.50 per share. For the current quarter, Meta said it expects revenue between $34.6 billion and $37 billion, beating analysts’ expectations of revenue of $33.6 billion.
Meta’s 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 expected 2.07 billion.
The company reported that ad impressions increased 21% from last year during the period, while the average price per ad fell 2%.
However, Meta’s Reality Labs continues to be a burden on the company. The division, charged with turning Zuckerberg’s metaverse vision into reality, lost another $4.65 billion, compared to the $4.3 billion the company lost during the same period last year. Nonetheless, the division beat revenue expectations, surpassing $1.07 billion versus the forecasted $812 million.
The launch of Apple’s rival Vision Pro headset could spark renewed consumer interest in AR/VR headsets and generate a ripple effect for Meta’s Quest headset line.
But Meta’s Reality Labs’ efforts have taken a back seat in investors’ minds amid growing investments in generative AI. In January, Zuckerberg announced in an Instagram Reels post 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 generally speaking, it is a kind of AI that can think and learn like a human. In other words, he is able to understand a multitude of concepts rather than specializing in a specific area.
In 2024, Meta expects its spending to total between $94 billion and $99 billion, with the company noting, among other things, that salary costs will increase this year as it hires more staff in more expensive technical positions as part of its push toward AI capabilities.
Meta also revealed that in 2023, restructuring charges, including severance and facility consolidation, amounted to $3.45 billion. The company’s workforce as of December 31, 2023 stood at 67,317 people, down 22% from the previous year.
Meta has been on a hot streak over the past 12 months, with stocks up 121% during that time and outperforming stocks like Apple (AAPL), Google (GOOG, GOOGLE), Microsoft (MSFT) and Amazon (AMZN).
In January, the company’s market capitalization once again eclipsed the $1 trillion mark.
Daniel Howley is the technical editor of Yahoo Finance. He has been covering the tech industry since 2011. You can follow him on Twitter @DanielHowley.
Read the latest financial and business news from Yahoo Finance
