Shares of <a href="https://www.thenationalnews.com/business/technology/2023/03/15/meta-layoffs-10000-facebook/" target="_blank">Facebook’s parent firm Meta </a>soared 12 per cent in after hours trading on Wednesday even as the company reported a 24 per cent annual decline in first-quarter profit, which still beat analysts' estimates as the company reduced expenses and <a href="https://www.thenationalnews.com/business/technology/2022/11/09/meta-to-cut-11000-jobs-as-revenue-decline-bites/" target="_blank">cut jobs</a>. The <a href="https://www.thenationalnews.com/business/technology/2023/04/20/facebook-users-can-apply-for-part-of-a-725m-settlement/" target="_blank">California-based company</a> earned a net profit of more than $5.7 billion in the quarter that ended on March 31, it said in a <a href="https://investor.fb.com/investor-news/press-release-details/2023/Meta-Reports-First-Quarter-2023-Results/default.aspx" target="_blank">statement </a>on Wednesday. This was 22.7 per cent higher compared to the last three months of 2022. The social media company’s revenue surged 3 per cent annually to $28.6 billion in the first quarter of 2023 from the same period a year earlier, after three consecutive quarters in which it had declined. The results beat analysts’ estimates of $27.6 billion. The company’s earnings per share dropped 19 per cent annually to $2.20. Shares of Meta jumped about 12 per cent to $233.75 a share in after hours trading on Wednesday. The company's stock is up 68 per cent since the start of the year, closing at $209.40, giving it a market value of $537.19 billion at the end of trading. Meta, which employs 77,114 people, expects its June quarter total sales to be in the range of $29.5 billion to $32 billion, which represents an annual growth of about 3.8 per cent, exceeding analysts' expectations of $29.5 billion, according to Refinitiv. “We had a good quarter, and our community continues to grow,” Meta founder and chief executive Mark Zuckerberg said. The number of Facebook’s daily active users, which declined for the first time in the company’s 19-year history in the fourth quarter of 2021, jumped 4 per cent yearly in the last quarter. It reached 2.04 billion, exceeding StreetAccount’s estimates of 2.01 billion. Meanwhile, Facebook’s monthly active users rose 2 per cent on an annual basis to 2.99 billion as of March 31. “Our AI work is driving good results across our apps and business,” Mr Zuckerberg said. “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.” The company incurred an expense of $21.42 billion, up 10 per cent on an annual basis, in the January-March period. This also included charges related to the company’s restructuring efforts of $1.14 billion in the last quarter. As part of its restructuring efforts in March, Meta announced it would lay off 10,000 employees and said it would also close about 5,000 open roles. In November, the company laid off 11,000 employees — equal to 13 per cent of its workforce. In the last quarter, advertisement impressions delivered across Meta’s family of apps increased by 26 per cent a year and the average price per advertisement dropped by 17 per cent annually. Meta’s family of apps includes Facebook, Instagram, Messenger, WhatsApp and other services. The company's advertising sales contributed more than 98 per cent to overall sales in the first quarter, growing by about 4 per cent on an annual basis to almost $28.1 billion in the March quarter. Revenue from other streams — including reality labs — dropped more than 40 per cent on an annual basis to nearly $544 million. The company’s reality labs, which include augmented and virtual reality-related consumer hardware, software and content for the metaverse, also reported an operating loss of almost $4 billion. Meta’s chief financial officer Susan Li said operating losses in the reality labs division is expected to increase this year. The company said it expects 2023's total expenses to be in the range of $86 billion to $90 billion, updated from its prior outlook provided in March. This included $3 billion to $5 billion of “restructuring costs related to facilities consolidation charges and severance and other personnel costs”, Ms Li said. The platform's capital expenditures, including principal payments on finance leases, were $7.09 billion for the first quarter, the company said. They are expected to be in the range of $30 billion to $33 billion for the 2023 full financial year, compared to $32.04 billion for the last fiscal year. “[The capex] outlook reflects our ongoing build out of AI capacity to support ads, feed and reels, along with an increased investment in capacity for our generative AI initiatives,” Ms Li said. The company repurchased $9.22 billion of its common stock in the last quarter. As of March 31, it had $41.73 billion available and authorised for repurchases, Meta said. Facebook’s cash, cash equivalents and marketable securities stood at $37.44 billion at the end of the last quarter.
