Facebook owner Meta Platforms (META) reported fourth-quarter results late Wednesday that beat on revenue as the company struggles through the most difficult period since its founding 19 years ago. Meta stock soared as the company announced a $40 billion stock buyback.
Also, Meta provided revenue guidance that beat estimates. For its first quarter, the company expects revenue in the range of $26 billion to $28.5 billion. The midpoint of $27.4 billion is above estimates of $27.1 billion.
The company reported adjusted earnings of $1.76 a share on revenue of $32.16 billion. Analysts expected revenue of $31.55 billion, according to FactSet.
Meta stock soared 17.9% to 180.85, during after-hours trading on the stock market today.
Difficult Year For Meta
The earnings report comes amid a highly difficult year for Meta, which announced plans in November to cut 11,000 jobs. The job cuts involve 13% of Meta’s workforce. Meta also said it announced Wednesday a $40 billion increase in its share authorization.
Like other social media companies, including Snap (SNAP), Etsy (ETSY) and Pinterest (PINS), Meta is challenged not only by macroeconomic weakness but also by a painful drop in digital advertising, which accounts for almost all of its revenue.
Further evidence of these challenges became evident in the fourth-quarter earnings report of Snap, owner of Snapchat, which was hammered after disappointing results. Snap stock plunged about 10.3% to close at 10.37 Wednesday.
Privacy Changes Tackle Meta Stock
Meta lost roughly $10 billion in ad revenue last year after Apple (AAPL) changed privacy policies for the iPhone. That change made it more difficult to accurately target users with ads.
But the company made technology improvements with its ad strategy approach. In a note to clients, Credit Suisse analyst Stephen Ju said he expects to see “gradual improvements to Meta’s revenue dollar growth” as a result.
Meta also plans to pour billions toward its development of the so-called metaverse.
Meta stock has a Relative Strength Rating of 72 out of 100.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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