Meta Platforms Shares Soar on Earnings Beat

Meta Platforms (META) is the best-performing stock in the S&P 500 as the social media giant beat quarterly estimates in almost every key financial metric and gave strong guidance.

The parent company of Facebook, Instagram, and WhatsApp reported first quarter revenue rose 2.6% to $28.6 billion. Analysts had been anticipating a decline. Earnings per share (EPS) of $2.20 also beat forecasts. Daily Active Users (DAU) and Average Revenue Per User (ARPU) were also better than expected.

CEO Mark Zuckerberg said the company is "becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long-term vision." In January, Zuckerberg called 2023 the "Year of Efficiency," and Meta moved to cut costs, including slashing 21,000 jobs since November.

Zuckerberg joined Microsoft earlier this week in promoting the success of its reach into artificial intelligence (AI). He cited "the progress we’re making on our AI discovery engine" and Reels, Meta's social media video service, as major drivers of the company’s growth.

Metaverse Losses

However, Meta’s investment in the metaverse continued to hemorrhage cash, with the company’s Reality Labs unit posting an operating loss of $3.99 billion in the period. The company expects Reality Labs’ losses to increase this year.  

Meta noted it sees current quarter sales of between $29.5 billion and $32 billion, exceeding estimates.

Shares of Meta Platforms are soaring 14% as of 1 p.m. New York time. They’ve almost doubled so far this year, far outpacing a 20% gain in the broader S&P 500 information technology sector over the same period.