In after-hours trading Wednesday, shares of Facebook parent Meta rose more than 9% as the internet company exceeded Wall Street estimates for sales, profitability, and user growth in the first quarter of the year.
- Why it is significant: After three straight quarters of year-over-year sales reductions, Meta’s year-over-year revenue increased in the first quarter.
- This expansion shows that the advertising market, which slowed dramatically in the second half of 2022 owing to economic uncertainties, is beginning to rebound.
Alphabet, Alphabet’s parent company, also exceeded sales projections last quarter, despite revenue declining from the same period the previous year.
Details: Meta had earlier predicted that revenue for the first quarter would either decrease or grow by no more than 2%. Rather, its sales climbed by around 3% year on year.
- “We had a good quarter, and our community continues to grow,” stated Mark Zuckerberg, CEO and creator of Meta.
- “Our AI efforts are yielding positive results across our apps and business.” We’re also getting more efficient so that we can produce better goods faster and be better positioned to execute on our long-term ambition.”
Between the lines: As its long-term efforts in constructing a metaverse continue to cut into the company’s earnings, Meta continues to promote its AI spending.
Last quarter, Meta’s Reality Labs unit lost $3.99 billion. According to the corporation, “Reality Labs operating losses are expected to increase year over year in 2023.”
According to CNBC, the following statistics:
- Earnings per share: $2.20.
- According to Refinitiv, revenue is $28.65 billion vs $27.65 billion.
- According to StreetAccount, daily active users (DAUs) were 2.04 billion compared to 2.01 billion projected.
- Monthly Active Users (MAUs): 2.99 billion vs the predicted 2.99 billion, according to StreetAccount.
