Social media giant Meta Platforms (META) has posted fourth-quarter earnings that exceed analyst predictions both in terms of revenue and profits. The company has also presented a bullish outlook for the ongoing quarter and announced new measures to benefit shareholders. For the fourth quarter, Meta reported adjusted earnings per share (EPS) of $5.33 on revenue of $40.11 billion, surpassing Bloomberg consensus data estimates of $4.94 EPS on revenue of $39.01 billion. This is a significant increase from the $32.2 billion in revenue reported in the same quarter last year. Meta has also increased its stock buyback authorization by $50 billion and introduced a quarterly dividend of $0.50 per share. In the current quarter, the company anticipates revenue between $34.6 billion and $37 billion, exceeding analysts’ forecasts of $33.6 billion. As a result, shares of Meta surged by as much as 17% in premarket trading on Friday. Meta’s advertising revenue amounted to $38.7 billion in the fourth quarter, beating expectations of $37.8 billion. Additionally, the company reported that it had 2.11 billion daily active users on Facebook, whereas Wall Street had anticipated 2.07 billion. The company’s ad impressions rose by 21% over the previous year, but the average price per ad decreased by 2%. However, Meta’s Reality Labs is still a financial burden for the company. This division, responsible for materializing Zuckerberg’s metaverse vision, incurred a loss of $4.65 billion, up from $4.3 billion in the same period last year. Nonetheless, the division surpassed revenue expectations, generating over $1.07 billion, as opposed to the anticipated $812 million. The launch of Apple’s Vision Pro headset could potentially boost consumer interest in AR/VR headsets, consequently benefiting Meta’s Quest line of headsets. However, amidst increased investments in generative AI, Meta’s Reality Labs initiatives are not a top priority for investors. In January, Zuckerberg disclosed on Instagram Reels that the company’s long-term objective is to develop general artificial intelligence and make it open source. There is no single definition of generative AI, but generally, it refers to AI that can learn and think like a human, capable of understanding various concepts rather than specializing in a specific field. In 2024, Meta projects its expenses to amount to $94 billion-$99 billion, citing an anticipated increase in payroll costs due to the expansion of its workforce in high-cost, technical roles in line with its AI push. The company also revealed restructuring charges of $3.45 billion in 2023, inclusive of severance and facilities consolidation. As of December 31, 2023, Meta’s headcount stood at 67,317, representing a 22% decrease from the previous year. Over the past year, Meta’s stock has surged by 121%, outperforming major tech giants and reaching a market capitalization exceeding $1 trillion in January.
