Meta Revenue beats as company announces $40 billion buyout
Facebook owner Metaplatforms (META) announced fourth-quarter results on Wednesday evening that beat its revenue as the company faces its toughest time since its inception 19 years ago. Meta stock soared as the company announced a $40 billion share buyback.
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Additionally, Meta provided revenue forecasts that exceeded estimates. For its first quarter, the company expects revenue of between $26 billion and $28.5 billion. The midpoint of $27.4 billion is above estimates of $27.1 billion.
The company reported adjusted earnings of $1.76 per share on revenue of $32.16 billion. Analysts had expected revenue of $31.55 billion, according to FactSet.
Meta shares climbed 17.9% to 180.85, during after-hours trading on the stock market today.
Difficult year for Meta
The earnings report comes amid a very difficult year for Meta, which in November announced plans to cut 11,000 jobs. The job cuts concern 13% of Meta’s workforce. Meta also said it announced a $40 billion increase in its stock clearance on Wednesday.
Like other social media companies, including Break (BREAK), Etsy (ETSY) and pinterest (PINS), Meta is facing not only macroeconomic weakness, but also a painful drop in digital advertising, which accounts for almost all of its revenue.
Further evidence of these challenges became evident in the fourth quarter earnings report from Snap, owner of Snapchat, which was hammered after disappointing results. Snap stock plunged around 10.3% to close at 10.37 on Wednesday.
Privacy Changes
Meta lost about $10 billion in ad revenue last year after Apple (AAPL) changed the privacy policies of the iPhone. This change made it more difficult to accurately target users with ads.
But the company has made technological improvements through its advertising strategy approach. In a note to clients, Credit Suisse analyst Stephen Ju said he expects to see “gradual improvements in Meta revenue dollar growth” as a result.
Meta also plans to pay billions for its development of the so-called Metaverse.
Meta stock has a relative strength rating of 72 out of 100.
Please follow Brian Deagon on Twitter at @IBD_BDeagon to learn more about tech stocks, analysis and financial markets.
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Meta Revenue beats as company announces $40 billion buyout
