After its most difficult year, Bloomberg Meta Platforms Inc. posted quarterly sales that topped estimates, gave a rosy revenue forecast and indicated that Facebook and Instagram still have room to grow, signalling it is on course for a turnaround.
The company's shares went up more than 18% in extended trading after a fourth-quarter sales beat that was fueled by stronger advertising demand and more users for its major social networks. According to Mark Zuckerberg, Meta is working to become more efficient, more profitable and nimbler at developing new products to make a more resilient company.
He said on an earnings call with investors that he was working on flattening our org structure and removing some layers of middle management to make decisions faster, as well as deploying AI tools to help our engineers be more productive. There are going to be some more things we can do to improve our productivity, speed and cost structure. The company has recovered from the worst year for its stock in history. Meta faced a decline in advertiser demand due to weaker in the broader economy and a change in iPhone privacy rules that made it harder for Meta to offer targeted ads. In November, Meta cut 11,000 jobs, or 13% of the workforce, in its first major layoff.
The company's performance was improved during the quarter when the cuts came during a quarter that was otherwise an improvement. Revenue was $32.2 billion, compared to the average Wall Street estimate of $31.6 billion, according to a Bloomberg survey. Meta is working on improving the videos it shows users on Facebook and Instagram, and is improving its investments in artificial intelligence.
More than 2 billion daily users are now on Facebook, Meta's flagship social network, up more than 70 million from a year ago.
Meta projected revenue of $26 billion to $28.5 billion for the first quarter, which is in line with estimates of $27.25 billion. The company increased its stock-buyback authorization by $40 billion, adding to the $10.9 billion remaining from previous repurchase programs.
The Menlo Park, California-based company said 2023 expenses will be less than previously forecast. The company said that costs for the year will be $89 billion to $95 billion. It could help lessen investor concerns that the company is over-spending on its virtual reality ambitions.
Zuckerberg has spent tens of billions of dollars in an effort to build the metaverse, a digital world where people can work and play. Much of the investment is not leading to immediate returns because of the efforts that are still in their early stages.
In the last quarter, capital expenditures went up to $32 billion. Capital spending was $5.54 billion in the fourth quarter of 2021, compared to $5.54 billion in the fourth quarter of 2021.