Meta predicts upbeat first-quarter revenue as shares rise
1 min read . Updated: 02 Feb 2023, 03:03 AM IST
PremiumMeta shares, which lost almost two-thirds of their value in 2022, were up about 10% in extended trading
Meta Platforms Inc on Wednesday forecast first-quarter revenue above Wall Street estimates, signaling a rebound in demand for digital ads after months of weak sales.
The parent of Instagram and Facebook forecast revenue between $26 billion and $28.5 billion, compared with analysts' average estimates of $27.14 billion, according to IBES data from Refinitiv.
Meta shares, which lost almost two-thirds of their value in 2022, were up about 10% in extended trading.
The digital ad giant faced a brutal 2022 as companies cut back on marketing spend due to economic worries, while rivals like TikTok captured younger users and Apple's privacy updates continued to challenge the business of placing targeted ads.
Meta's forecast is an indication that the ad market may be recovering as companies increase their marketing budgets, after a long pause due to macroeconomic uncertainties.
Net income for the fourth quarter ended Dec 31, however, fell to $4.65 billion, or $1.76 per share, in the quarter ended Dec. 31, compared with $10.29 billion, or $3.67 per share, a year earlier, largely due to a $4.2 billion charge related to cost-cutting moves such as layoffs.
Profits fall in Q4
Meta Platforms Inc on Wednesday reported a 55% fall in quarterly profit, hurt by a hefty charge related to cost-cutting moves like layoffs, office closures and an overhaul of its data center strategy.
Meta posted lower fourth-quarter profit and revenue on Wednesday, hurt by a downturn in the online advertising market and competition from rivals such as TikTok.
But the company's stock soared in extended trading, as its revenue beat Wall Street's muted expectations and the Menlo Park, California-based company announced a $40 billion stock buyback.
Meta Platforms Inc. said it earned $4.65 billion, or $1.76 per share, in the final three months of 2022. That's down 55% from $10.29 billion, or $3.67 per share, a year earlier.
Analysts were expecting earnings of $2.26 per share, according to a poll by FactSet.
Revenue fell 4% to $32.17 billion from $33.67 billion. Analysts were expecting $31.55 billion.
Meta's shares jumped almost 18% in after-hours trading.
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