Meta Stock Soars 14% as Profits Triple and Company Introduces First-Ever Dividend

Meta had a strong showing in its fourth-quarter earnings report released on Thursday, marking a significant milestone with its inaugural dividend payment. Investors reacted positively, driving the stock up by 14% during after-hours trading.

Meta Stock Soars 14% as Profits Triple
Meta Stock Soars 14% as Profits Triple

Here’s a breakdown of the key figures:

  • Earnings per share came in at $5.33, surpassing the $4.96 expected by LSEG (formerly Refinitiv).
  • Revenue totaled $40.1 billion, exceeding the anticipated $39.18 billion by LSEG.
  • Daily active users (DAUs) reached 2.11 billion, slightly higher than the expected 2.08 billion.
  • Monthly active users (MAUs) stood at 3.07 billion, surpassing the anticipated 3.06 billion.
  • Average revenue per user (ARPU) was $13.12, topping the expected $12.81.

Revenue surged by 25% from the previous year to $32.2 billion, marking the fastest growth rate since mid-2021, driven by a rebound in the online advertising market. Meanwhile, the company managed to decrease expenses by 8% year-over-year to $23.73 billion, resulting in an operating margin that more than doubled to 41%, indicating effective cost-cutting measures that bolstered profitability.

Net income more than tripled to $14 billion, translating to $5.33 per share, compared to $4.65 billion, or $1.76 per share, in the same period last year.

Meta announced its intention to distribute a dividend of 50 cents per share on March 26, following a significant increase in cash and equivalents from $40.7 billion to $65.4 billion year-over-year by the end of 2023. Additionally, the company unveiled a $50 billion share buyback program.

The post-market surge continues a trend from 2023, during which Meta’s stock nearly tripled in value. With the late-trading price, Meta’s market capitalization has now reached nearly $1.2 trillion.

Sales in Meta’s Reality Labs unit surpassed $1 billion in the quarter, although the virtual reality division recorded losses of $4.65 billion.

Meta’s CEO, Mark Zuckerberg, commented, “We had a good quarter as our community and business continue to grow. We’ve made a lot of progress on our vision for advancing AI and the metaverse.”

Looking ahead, Meta anticipates first-quarter sales to range between $34.5 billion to $37 billion, surpassing analysts’ expectations of $33.8 billion. Expenses for 2024 are projected to be in the range of $94 billion to $99 billion.

As of December 31, Meta reported a headcount of 67,317, reflecting a 22% decrease year-over-year following layoffs.

Susan Li, Meta’s finance chief, highlighted that the primary drivers of revenue growth came from companies in sectors such as e-commerce, entertainment, and gaming.

Meta’s financial recovery was partly driven by increased spending from Chinese retailers targeting global users. Notably, revenue from Chinese advertisers contributed 10% to Meta’s annual sales and accounted for 5 percentage points of growth.

Zuckerberg emphasized Meta’s commitment to investing in AI and expanding computing infrastructure to handle larger workloads, with minimal expansion in headcount to maintain efficiency.

Meta’s recent earnings report coincides with announcements from other tech giants such as Amazon and Apple, signaling the end of earnings season for mega-cap companies in the tech sector.

Zuckerberg, alongside executives from other social media platforms, faced tough questions from lawmakers regarding child exploitation issues on their platforms during a recent hearing. He expressed empathy and apologized to affected families, acknowledging the severity of the challenges they’ve faced.

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