Despite a tough start to 2022, Facebook parent company Meta exceeded estimates for revenue in its fourth-quarter earnings report, surpassing Wall Street Prediction.
The social media giant ended the year with $US 32.1 billion in revenue, surpassing Wall Street predictions of $US 31.6 billion.
Meta’s shares soared by 23 percent which saw the company’s founder Mark Zuckerberg amass a whopping $10 billion in 24 hours, with the tech giant announcing a $40 billion stock buyback.
Meanwhile, revenue in the fourth quarter fell 4% from a year earlier, marking a third straight quarter of declining sales. It’s cost and expenses ballooned 22% year-over-year to $25.8 billion.
Its profit more than halved to US $4.4 billion in the third quarter (Q3) from $9.2 billion a year earlier, while it announced significant changes to bolster efficiency in a tougher economic environment.
The social media giant in the third quarter faced stagnating user numbers and cuts in advertising budgets, also its revenue slipped to U.S. $27.7 billion from U.S. $29 billion a year earlier.
Its shares plummeted by over 60% last year, as Zuckerberg struggled to sell Wall Street on his plan to pivot the company towards the yet-to-be-developed world of the metaverse.
This frustrated investors who expressed concerns that the company was focused on a bleak futuristic endeavor, the met averse, while its ads business struggled.
Following the turnaround in the company’s recent revenue, Meta attributed the adjustment to slower anticipated growth in payroll expenses and cost of revenue. The company also said it was lowering the capital expenditure estimates for the year 2023 to be in the range of $30 billion to $33 billion, down from $34 billion to $37 billion.
It, therefore, expects its total expenses in 2023 to be in the range of $89 billion to $95 billion, lower than its prior outlook of $94 billion to $100 billion for the year.
Few analysts disclosed that the company had made all the right moves by posting better-than-expected earnings with impressive advertising revenue results, slashing expenses, and then announcing a massive share buyback plan.
Meta’s CEO Mark Zuckerberg who had earlier stated that the company was going into 2023 with a focus on prioritization and efficiency, revealed that the company’s management theme for 2023, is the “year of efficiency”.
