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Facebook parent Meta Platforms Inc. is raking in digital-advertising revenue, leading to upbeat earnings and a warm reception from Wall Street.
The company’s stock immediately shot up about 4.5% in after-hours trading Wednesday after Meta
META,
easily cleared profit and revenue expectations for the third-quarter.
Meta rang up quarterly net income of $11.6 billion, or $4.39 a share, compared with net income of $4.4 billion, or $1.64 a share, in the year-ago quarter.
Revenue climbed 23% to $34.2 billion from $27.7 billion in the year-ago quarter.
Analysts surveyed by FactSet had expected on average earnings of $3.64 a share on revenue of $33.6 billion.
A rebound in advertising, the monetization of Instagram and Reels, and AI-fueled ad targeting and measurement contributed to the quarter’s performance. Meta’s better-than-expected performance comes on the heels of a similarly strong quarter from Google parent
GOOGL,
GOOG,
Alphabet Inc.
“We had a good quarter for our community and business,” Meta Chief Executive Mark Zuckerberg said in a statement announcing the results. “I’m proud of the work our teams have done to advance AI and mixed reality with the launch of Quest 3, Ray-Ban Meta smart glasses, and our AI studio.”
Meta executives forecast fourth-quarter revenue of $36.5 billion to $40.0 billion, while analysts on average were expecting $38.8 billion, according to FactSet.
The company also cut its full-year outlook for total expenses and now expects $87 billion to $89 billion. The prior forecast was for $88 billion to $91 billion.
“We expect Reality Labs operating losses to increase year-over-year in 2023,” the company said in its release.
Meta said it reduced its worldwide workforce 24% on a year-over-year basis, as of Sept. 30, when headcount was 66,185.
Facebook had 3.14 billion daily active users, up 7% from a year ago, and the “family” of Meta apps—which includes Instagram—reported daily active users of 3.96 billion, also up 7%.
Meta’s stock dropped 4% to $299.53 in the regular session. The stock has sky-rocketed 149% so far this year, while the broader S&P 500 index
SPX
has increased 9%.
