February 27, 2024

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Higher estimates for descriptive earnings as expectations, buybacks and new dividends send stocks higher

Higher estimates for descriptive earnings as expectations, buybacks and new dividends send stocks higher

Social Media Giants (META) Fourth quarter earnings announced Which beat analyst estimates on the bottom line and bottom line, as the company presents strong forecasts for the current quarter and announces new shareholder return initiatives.

For the fourth quarter, Meta reported adjusted earnings per share (EPS) of $5.33 on revenue of $40.11 billion. Analysts were expecting adjusted EPS of $4.94 on revenue of $39.01 billion, according to Bloomberg consensus data. The company reported revenues of $32.2 billion In the same quarter of last year.

The company also enhanced its stock repurchase authorization by $50 billion and began paying a quarterly dividend of $0.50 per share.

In the current quarter, Meta said it expects revenues ranging from $34.6 billion to $37 billion, exceeding analysts' expectations that revenues would reach $33.6 billion.

Meta shares soared, rising as much as 17% in pre-market trading on Friday.

Meta advertising revenue was $38.7 billion in the fourth quarter, beating expectations of $37.8 billion. The company also reported 2.11 billion daily active users on Facebook. Wall Street was expecting $2.07 billion.

The company reported that ad impressions increased by 21% compared to last year during this period, while the average ad price decreased by 2%.

However, Meta's Reality Labs are still a drag on the company. The division, tasked with turning Zuckerberg's vision for the business into reality, lost another $4.65 billion, up from the $4.3 billion the company lost in the same period last year. However, the division exceeded expectations in terms of revenue, exceeding $1.07 billion versus $812 million expected.

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The launch of Apple's competing Vision Pro headset could spark a jump in consumer interest in AR/VR headsets and create a knock-on effect on the Meta's Quest headset lineup.

But Meta's Reality Labs efforts have faded in investors' minds amid increased investments in generative artificial intelligence. In January, Zuckerberg announced in a post on Instagram Reels that the company's long-term strategy was to develop artificial general intelligence and make it open source.

There is no single definition of generative AI, but it is generally a type of AI that can think and learn like a human. In other words, he is able to understand many concepts rather than specializing in a specific field.

Meta founder and CEO Mark Zuckerberg speaks during a Meta Connect event at Meta headquarters in Menlo Park, California, on September 27, 2023. (Photo by Josh Edelson/AFP) (Photo by Josh Edelson/AFP via Getty Images)

Meta founder and CEO Mark Zuckerberg speaks during a Meta Connect event at Meta headquarters in Menlo Park, California, on September 27, 2023. (Photo by Josh Edelson/AFP via Getty Images) (Josh Edelson via Getty Images)

In 2024, Meta expects its total expenses to reach $94 billion-$99 billion, with the company noting, among other things, that payroll costs will rise this year as it adds more employees in high-cost technical roles amid its push toward AI features. .

Meta also revealed that in 2023, restructuring charges, including severance and facility consolidation, amounted to $3.45 billion. The company's headcount as of December 31, 2023, was 67,317, a decrease of 22% from the previous year.

Meta has been on a hot streak over the past 12 months, with shares up 121% over that period and outperforming the likes of Apple (AAPL), Google (GOOG, GOOGL), Microsoft (MSFT), and Amazon (AMZN).

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In January, the company's market value once again exceeded $1 trillion.

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Daniel Holley He is the technology editor at Yahoo Finance. He's been covering the tech industry since 2011. You can follow him on Twitter @Daniel Holly.

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