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Shares of Meta Platforms (META) soared Friday, rising more than 20% after the company reported better-than-expected earnings and guidance and announced new shareholder return plans.
Friday’s gains added nearly $200 billion to the company’s market capitalization, a stock market record, according to Bloomberg data. Meta stock was trading around $475 on Friday. At the low point in 2022, the stock fell to $90.
Meta’s market capitalization currently exceeds $1.2 trillion.
For the fourth quarter, Meta reported adjusted earnings per share (EPS) of $5.33 and revenue of $40.11 billion. Analysts had expected adjusted EPS of $4.94 and revenue of $39.01 billion, according to Bloomberg consensus data. The company reported revenue of $32.2 billion in the same period last year.
The company also increased its share buyback authorization by $50 billion and began paying a quarterly dividend of $0.50 per share. Meta said it expects revenue for the current quarter to be between $34.6 billion and $37 billion, beating analysts’ revenue expectations of $33.6 billion.
Meta’s ad revenue for the fourth quarter was $38.7 billion, exceeding expectations of $37.8 billion. The company also reported that Facebook has 2.11 billion daily active users. Wall Street had expected 2.07 billion.
The company reported that the number of ad impressions increased 21% year-over-year during the same period, while the average price per ad decreased 2%.
But Meta’s Reality Labs remains a burden to the company. The unit tasked with making Mr. Zuckerberg’s Metaverse vision a reality suffered an additional $4.65 billion in losses, up from $4.3 billion in losses for the same business in the same period a year earlier. Still, the division’s sales exceeded expectations, coming in at more than $1.07 billion, compared to expectations of $812 million.
The launch of Apple’s rival Vision Pro headset could jump-start consumer interest in AR/VR headsets and create a ripple effect for Meta’s Quest series of headsets.
But as investment in generative AI increases, Meta’s Reality Labs efforts have taken a backseat in investor consciousness. Zuckerberg announced in a January post on Instagram Reels that the company’s long-term strategy is to develop and open source artificial general intelligence.
Generative AI has no single definition, but broadly speaking it is a type of AI that can think and learn like humans. In other words, you can understand many concepts rather than specializing in one area.
Meta expects total expenses to be between $94 billion and $99 billion in 2024, especially this year as the company adds headcount to high-cost technical roles as it works toward AI capabilities. pointed out that labor costs will rise.
Meta also disclosed that restructuring costs, including severance and facility consolidation, totaled $3.45 billion in 2023. As of December 31, 2023, the number of employees of the company was 67,317, a decrease of 22% from the previous year.
Meta has been on a meteoric rise over the past 12 months, with the stock surging 121% over that period, outperforming the likes of Apple (AAPL), Google (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN).
In January, the company’s market capitalization again exceeded the $1 trillion mark.
daniel howley I’m the technology editor at Yahoo Finance. He has been covering the technology industry since his 2011. You can follow him on Twitter. @Daniel Howley.
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