Meta continued big tech’s earnings hot streak with its strong quarterly report released Wednesday afternoon (local time), sending its shares rallying as its billionaire CEO Mark Zuckerberg’s commitment to trimming costs proves popular among investors.
Meta reported $28.6 billion in quarterly revenue and $2.20 earnings per share, smashing consensus analyst estimates of $27.7 billion and $2.02, respectively.
Shares of the Facebook parent company skyrocketed 10% in after-hours trading following the report to what would be its highest price since February 2022, building on its 1% gain in regular trading Wednesday.
Zuckerberg accordingly tacked on $8.4 billion to his net worth thanks to the stock surge, according to Forbes calculations.
The company still posted a staggering $1 billion loss in its augmented and virtual reality, or metaverse, division, worse than analyst expectations and a more than 30% larger loss in the segment than the first quarter of last year.
Meta also slashed its estimate for 2023 costs by another $3 billion after cutting its forecast by $5 billion in its February earnings release, evidence of the early results of the company’s bottom line-focused restructuring, highlighted by thousands of layoffs.
Key Background
Meta’s earnings come a day after Microsoft and Google parent Alphabet each beat expectations for profit and sales in their own reports. Those three companies along with fellow tech giants Amazon, Apple, Nvidia and Tesla have added a combined $2 trillion in market capitalization thus far in 2023, accounting for most of the S&P 500’s gains. Though Meta’s nearly 70% rally year-to-date places it among the top performers on the S&P, it is still down about 45% from its 2021 all-time high. Meta’s rapid stock decline largely came as Wall Street soured on the company’s decision to invest heavily in the metaverse. Meta has reported more than $20 billion in losses in its metaverse segment since changing its name from Facebook to Meta during the fourth quarter of 2021.
Big Number
21,000. That’s how many employees Meta has let go over the last six months, cutting its headcount by more than 20%.
Surprising Fact
Meta stock had its best day since July 2013 following the release of its earnings report in February, rallying 23%. The surge came as Meta rolled out $40 billion in stock buybacks and beat expectations for sales.
Tangent
A TikTok ban in the U.S. could cause Meta’s stock to spike as much as 30%, Bernstein analyst Mark Shmulik estimated in a note to clients last month, noting Meta’s Reels is by far the best-positioned American short-form video service to capitalize on the possible vacuum left by TikTok.
Forbes Valuation
Zuckerberg was worth $75 billion at market close Wednesday, per Forbes’ calculations, making him the 15th-richest person in the world. That’s a more than 100% increase from last fall but still nearly 50% lower than September 2021, when Zuckerberg’s fortune peaked at $136.4 billion.
This article was first published on forbes.com and all figures are in USD.
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