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Business News/ Companies / Company Results/  Meta Q1 Results: Facebook parent more than doubles profit to $12.37 billion, revenue up 27% to $36.46 billion
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Meta Q1 Results: Facebook parent more than doubles profit to $12.37 billion, revenue up 27% to $36.46 billion

Meta Q1 Results: Despite the increase in profit and revenue for the January-March 2024 period, Meta shares tanked 16 percent in after-hours trading after revenue guidance was lukewarm.

File image of Meta CEO Mark Zuckerberg delivering a speech at the company's headquarters in Menlo Park, California, last year. (Reuters / Carlos Barria)Premium
File image of Meta CEO Mark Zuckerberg delivering a speech at the company's headquarters in Menlo Park, California, last year. (Reuters / Carlos Barria)

Meta Q1 Results: Meta Platforms Inc., the parent company of social media majors Facebook and Instagram announced its first quarter results on April 24. The tech giant reported a significant surge — more than doubling numbers — in its Q1 profit, AP reported.

The profit increase was driven by increased advertising revenue and a 6 percent rise in average ad prices on its platforms, it added.

However, despite the positive earnings, the company saw a sharp decline in its shares, tanking 16 percent during after-hours trading, due to lukewarm revenue projections, as per the report.

Meta's Profit and Revenue Highlights

Meta more than doubled its profit for the January-March period, with earnings reaching $12.37 billion, or $4.71 per share, up from $5.71 billion, or $2.20 per share, in the same period last year.

Additionally, revenue saw a 27 percent rise to $36.46 billion, as compared to $28.65 billion the year ago.

According to a poll by FactSet, analysts had anticipated earnings of $4.32 per share on revenue of $36.14 billion, slightly lower than Meta's reported figures.

Looking ahead, the company provided revenue guidance for the current quarter, expecting it to range between $36.5-39 billion, surpassing analyst expectations of $38.25 billion for the second quarter.

Meta's Investments in Artificial Intelligence

Meta revealed plans for increased capital expenses this year (2024), primarily due to investments in artificial intelligence (AI).

The company forecasts expenses in the range of $35-40 billion, compared to its earlier guidance of $30-37 billion. CEO Mark Zuckerberg highlighted Meta's commitment to AI, unveiling new AI systems aimed at enhancing user experience.

Earlier in April, Meta unveiled a new set of AI systems that are powering what CEO Mark Zuckerberg calls “the most intelligent AI assistant that you can freely use."

Meta has been a leader in the AI space alongside Google and OpenAI. Besides these, start-ups Anthropic, Cohere and France’s Mistral, have been releasing new AI language models to attract customers.

User Growth and Workforce Changes

Meanwhile, Meta reported a continued increase of 7 percent year-on-year (YoY) in the number of users across its apps, with an average of 3.24 billion users in March across its "family of apps" — Facebook, Instagram, Messenger and WhatsApp. The company also said that it will no longer disclose user figures specifically for Facebook.

Additionally, Meta's workforce decreased by 10 percent YoY, with Zuckerberg referring to 2023 as a year focused on efficiency, resulting in thousands of layoffs. The Silicon Valley tech giant had 69,329 employees as of March 31, as per the report.

Market Response and Analyst Insights

Reacting to Meta's earnings report, Thomas Monteiro from Investing.com told AP this serves as a "stark warning for companies reporting this earnings season".

“Even though the company did beat estimates in all top- and bottom-line metrics, it didn’t matter as much as the reported lowering revenue expectations for Q2. This is the exact opposite of what Tesla did yesterday and goes to show that investors are currently looking at the near future with heavy mistrust," Monteiro said.

(With inputs from AP)

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Published: 25 Apr 2024, 06:31 AM IST
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