Meta Platforms Stock Soars 20% After Initiates Dividend, Strong Engagement Trends

Social media beast Meta Platforms, owner of Facebook shares soared around 20% after earnings beats by $0.51, beats on revs and guiding Q1 revs above consensus. Meta Initiated a quarterly dividend of $0.50/share and also announced a $50 billion increase to share repurchase program. The company said it is experiencing strong engagement trends across apps and capex growth will be driven by investments in servers and data centers as it invests in AI.

All the bad was forgiven at the former Facebook, now rebranded Meta Platforms after its earnings report. The stock rose 20% Friday to close at an all-time high of $474.99 per share, adding $197 billion to its market capitalization. This was the biggest single-session market value addition, eclipsing the $190 billion gains made by Apple Inc. and Amazon.com Inc. in 2022.

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META has been a remarkable comeback from the third quarter a year ago where revenue and EPS missed as it posted a net profit of $4.39 billion, or $1.64 a share, down from $9.2 billion, or $3.22 a share last year. META also warning going forward then. This was the fourth quarter in a row Meta’s bottom line has fallen. The company hasn’t experienced such a slump since the fourth quarter of 2012. Spotify and Google-parent Alphabet then also revealed shrinking advertising demand also. Social media company SNAP was also dumped after its earnings.

Highlights Meta Q4 23 Earnings:

  • EPS $5.33 (est $4.91)
  • Rev $40.11B (est $39.01B)
  • Ad Rev $38.71B (est $37.81B)
  • Q1 Revenue Seen Between $34.5B – $37B (est $33.64B)
  • Facebook Daily Active Users 2.11B (est 2.07B)
  • Facebook Monthly Active Users 3.07B (est 3.06B)
  • To Pay Quarterly Cash Dividend Of $0.50/Share
  • Boost Buyback By $50 Bln

Facebook in 2022 announced new efforts to invest in areas outside of its core advertising business, including augmented and virtual reality.

  • Revenue and operating profit for the company’s family of apps, including Facebook, Instagram, Messenger, WhatsApp and other services, will be reported separately from FRL, which includes AR and VR-reality related hardware, software and content.
  • Investments outside of advertising are proving critical to Facebook’s long-term growth.

Stock Market Reaction

  • 474.99 ▲ +80.21 (+20.32%) Close Friday February 2 · Market Close
  • 474.99 ▲ +288.46 (+154.65%) past year
  • 474.99 ▲ +309.28 (+186.64%) past 5 years

Outlook

Meta CEO Zuckerberg:

  • Getting Ready To Roll Out Meta’s AI Services More Widely In ‘Coming Months’
  • Focus Of Metaverse This Year Is Will Be Growing Mobile Version Of Horizon
  • Threads Now Has More Daily Users Than During Initial Launch, Now Has More Than 130 Mln Monthly Active Users
  • Co. Plans To Make More Ray-Ban Smart Glasses Than Expected; Cites High Demand

Meta CFO Susan Li:

  • To Discontinue Reporting Of Facebook Monthly, Daily Active Users
  • Revenue From China Based Advertisers Represented 10% Of Overall Revenue In 2023
  • AI Infrastructure Capacity Expected To Be An Area In Which Meta Invests ‘Aggressively’ In Coming Years

Analyst Reaction

Source: Traderscommunity, Facebook,

From The Traders Community News Desk