Top Line
Meta again beat Wall Street’s expectations in its first-quarter earnings report Wednesday afternoon, but said it expected the pace of growth to slow significantly, sending its stock soaring.
Meta CEO Mark Zuckerberg cheering at a UFC event in February
Zuffa LLC via Getty Images
important facts
Meta posted sales of $36.46 billion during the period, handily beating estimates of $36.14 billion and up 27% from the same period last year.
Its $4.71 earnings per share beat forecasts for $4.32 earnings per share, and its $12.4 billion net income compared favorably with estimates of $11.4 billion.
First-quarter results are impressive, but investors reacted sourly as Meta said it expects second-quarter sales of $36.5 billion to $39 billion, according to FactSet’s midpoint guidance of $37.8 billion versus the average analyst estimate of $38.3 billion. It is quite less.
The company also raised its full-year expense outlook, citing rising costs in its unfavorable Metaverse segment, cutting into the efficient growth story that has boosted Meta’s stock over the past year and a half.
Meta shares fell 10% in limited afternoon trading, hovering around $440 a share, which would be its lowest price since Feb. 1, should losses continue in Thursday’s regular session.
main background
As a reminder, Meta is an advertising company, not social media or the metaverse, at its core; Advertisements account for about 99% of Meta’s total revenue. Meta’s strong growth during the first quarter reflects the social media giant’s dramatic recovery in recent years. After recording five consecutive quarters of negative year-on-year earnings growth from Q4 2021 to Q4 2022, Meta has returned to attractive profitability. After falling from a then-record $380 per share in September 2021 to below $90 by November 2022, Meta’s stock remarkably rose to a new all-time high of $531 earlier this month. For those keeping score at home, that’s a drop of nearly 80% over the course of 14 months, followed by an increase of more than 500% over the next 17 months. Meta, which was rebranded from Facebook in 2021, experienced its initial selloff amid a broader selloff in the stock market and as investors shrugged off the company’s cash-burning expansion into augmented and virtual reality, or the metaverse. Its recovery came as ad spending proved resilient as the US avoided entering the brutal economic recession that many had predicted and the market benefited, but Meta continued its commitment to keeping costs down while significantly growing its top line. Has proven particularly attractive for.
amazing facts
Meta reported another $3.8 billion loss at its Metaverse division last quarter, pushing the unit’s operating losses to nearly $37 billion during its 2.5-year existence.
big number
$172.7 million. Zuckerberg, who holds about a 13% stake in Meta, will receive the same amount in the next dividend payment thanks to his 345.5 million shares in the company. This is a major coup for Zuckerberg, who took just a $1 salary and $24.4 million in additional compensation in 2023, largely attributed to the safety of him and his family.
forbes rating
Zuckerberg’s nine-figure dividend payout is a drop in the bucket compared to his extensive fortune, which Forbes valued at about $173 billion as of Wednesday’s market close, making him the fourth-richest person on the planet. He is $125 billion richer than at the end of 2022, when he was only the 26th richest human, an increase driven by Meta stock’s rapid recovery.
