Meta shares surge as ad sales, outlook show strength
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Meta Platforms (NASDAQ:META) shares rocketed up by almost 14% Thursday in the wake of the Facebook parent company blowing past first-quarter expectations and raising its second-quarter forecasts.
Late Wednesday, Meta (META) said that it now estimates its second-quarter revenue to be in a range of $29.5B to $32B, compared to prior estimates of $29.48B in sales. The company said its forecast is based, in part, on a belief that headwinds from foreign currency exchange rates will come in at less than 1% to its year-over-year revenue growth.
Along with its better-than-expected outlook, Meta (META) also reported first-quarter earnings of $2.20 a share, on revenue of $28.65B, compared to analysts' forecasts of $2.01 a share on $27.67B in sales. Advertising revenue totaled $28.1B, and topped estimates of $26.88B in ad sales.
The upbeat advertising revenue results helped Meta (META) investors breathe a sigh of relief as for months, many of the leading social-media companies had either reported, or at least suggested slowing growth or decline in their ad revenue would be a persistent issue this year. By the time the closing bell rang, Meta (META) shares had risen to finish the day at $238.56, the stock's highest close since February 2022.
"We had a good quarter and our community continues to grow," Meta Chief Executive Mark Zuckerberg said, in describing the company's recent business performance.
Zuckerberg also said artificial intelligence continues to be a major area of focus for the company. According to Zuckerberg, Meta's (META) AI work "is driving good results" across its apps and overall business.
"We're also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision," Zuckerberg said.
Zuckerberg has called 2023 to be a "year of efficiency" at Meta (META) and the company has taken several moves to reduce its expenses, including the cutting of approximately 11,000 jobs this year.
On Wednesday, Meta (META) said its results were impacted by $523M in expenses related to layoffs and restructuring. The company has said it expects to take a $1B hit due to layoff this year.
As part of its layoffs and cost-cutting efforts, Meta (META) now estimates that its total expenses for 2023 will be between $86B and $90B, while last October it had forecast expenses for the year to be in a range of $96B to $101B.
More on Meta/Facebook:
Meta earnings call: Never mind the ad beat, here's the AI future (and present)
Meta's year of efficiency is working
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