Mark Zuckerberg’s Meta, parent of Facebook and Instagram, posted upbeat financials today to Wall Street’s surprise and relief, beating on revenue and daily active users. Earnings fell but were hit by a $4,2 billion restrcuturing charge after laying off 11,000 people late last year.
first earnings report since the company announced last fall that it’s slashing jobs amid a retrenchment in the tech sector. Meta itself has been hampered by hefty investmetn in, and Wall Street skepticism at, its push into the Metaverse. Snap’s gloomy outlook yesterday wasn’t a great harbinger for ad-suppported internet services but Facebook blew by that.
Four-quarter sales of $32.2 billion were down 4% from the year before but beat expectations. Earnings fell to $4.6 billion from $10.2 billion. EPS of $1.76 vs $3.67 would have been signifinicantly higher excluded that $2.4 billion charge.
Facebook’s daily active users (DAU) of 2 billion at year end were up 4%. Monthy active users (MAU) of 2.96 billion were up 2%.
“Our community continues to grow and I’m pleased with the strong engagement across our apps. Facebook just reached the milestone of 2 billion daily actives,” said Zuckerberg. “The progress we’re making on our AI discovery engine and Reels are major drivers of this. Beyond this, our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization.”
Execs will hold a call with analysts at 5:30 pm ET to talk earnings and outlook.
Facebook stock jumped 15% in late trading on the report.
The company and broader markets had rallied this afternoon as Fed chair Jerome Powell indicated that the string of suffocating interest rate hikes than many fear may be pushing the country into recession, are starting to have an impact on inflation. Advertisers are fickle ahead of recession.
The job still isn’t done, Powel said after the Fed’s latest in a string of rate hikes, but the end may be in sight.