Meta shares rise on earnings beat
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Shares in Meta rose more than 4% in extended trading Wednesday after the tech giant said it beat Wall Street estimates on top and bottom lines and forecast strong growth in the fourth quarter.
Why it matters: The earnings beat underscores how well Meta's ad business has been able to recover from of a major slowdown in 2022.
- The period between July and September marked the third consecutive quarter in which Meta's quarterly revenue grew year-over-year.
- Meta's share price was up 174% year-to-date heading into earnings.
What they're saying: "We had a good quarter for our community and business," Meta founder and CEO Mark Zuckerberg said in a statement.
- "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."
Be smart: Meta has focused more of its investor messaging in the past year on its investments in artificial intelligence over virtual and augmented reality.
- But the company continues to spend heavily on its Reality Labs division.
- The firm said it expects operating losses from that division to increase year-over-year for the full year of 2023.
By the numbers, via CNBC:
- Earnings: $4.39 per share vs $3.63 per share expected by LSEG, formerly known as Refinitiv.
- Revenue: $34.15 billion vs $33.56 billion expected by LSEG.
- Daily active users (DAUs): 2.09 billion vs 2.07 billion expected, according to StreetAccount
- Monthly active users (MAUs): 3.05 billion vs 3.05 billion expected, according to StreetAccount
- Average revenue per user (ARPU): $11.23 vs $11.05 expected, according to StreetAccount
The big picture: The positive earnings report comes the day after dozens of state attorneys general filed a federal antitrust lawsuit against the company, alleging it knowingly issued products and features that pose psychological risks to children and teen users.
- The company warned Wednesday that regulatory pressure could "significantly impact our business and our financial results."
- In May, the Federal Trade Commission proposed new terms involving a 2019 settlement with Meta that would prohibit the company from profiting from data it collects from users under age 18.
- In a statement, Meta said it's contesting the matter, "but if we are unsuccessful it would have an adverse impact on our business."
What to watch: The company projected strong earnings for the fourth quarter, and noted current exchange rates are expected to add a 2% tailwind to the company's annual revenue.
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