Meta announced its first dividends

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Key points:

  • Meta shares soared more than 14% after the earnings report.
  • The company’s stock market value increased by more than $140 billion.
  • Meta continues to invest billions of dollars in “metaverse” technologies and building artificial intelligence infrastructure.

Meta Platforms declared its inaugural dividend just a few days ahead of the 20th anniversary of Facebook, its flagship social network. The company also revealed revenue and profit figures that exceeded expectations, driven by robust advertising sales during the holiday shopping season.

The company’s shares surged by over 14%, propelling Meta’s market value up by more than $140 billion. In recent weeks, Meta achieved record highs for the first time in over two years.

The declared dividend amounts to 50 cents per share, and in addition to this, Meta disclosed the authorization of an extra $50 billion for share repurchases.

This move marks a significant milestone for the tech sector, as Meta Platforms becomes the first among its generation of internet giants to initiate dividend payments.

The company’s results exceeded traders’ expectations

The company, alongside other major tech players, unveiled its quarterly results this week. Meta’s shares have experienced a steady ascent over the past year, rebounding from a 2022 crash that erased more than three-quarters of its initial value. This resurgence has been propelled by investor enthusiasm surrounding artificial intelligence.

The recovery was also influenced by upticks in user numbers, digital advertising sales, and cost-cutting measures that led to a reduction of over 21,000 staff since the conclusion of 2022.

In the fourth quarter, revenue witnessed a 25% increase, reaching $40.1 billion, surpassing analysts’ expectations of $39.2 billion, as per LSEG. Net income showed a remarkable surge of over 200%, amounting to $14 billion, or $5.33 per share, surpassing the anticipated $4.97 per share.

Looking ahead, Meta anticipates first-quarter revenue to fall within the range of $34.5 billion to $37 billion, surpassing Wall Street’s projections of $33.8 billion. Additionally, the company disclosed its forecast for total expenses in 2024, ranging from $94 billion to $99 billion.

More investment in AI and virtual reality

Enhancements in the social media sector have heightened investor acceptance of Meta’s unchanging expenses, as the company channels substantial funds into “metaverse” technologies and the expansion of artificial intelligence infrastructure.

Meta’s dedicated metaverse unit, Reality Labs, exceeded fourth-quarter earnings projections with ease. The unit disclosed unprecedented sales amounting to $1.1 billion, propelled by robust demand for its Quest device during the holiday season, as highlighted by Zuckerberg in discussions with analysts following the report.

Despite these achievements, Meta emphasized that it anticipates a substantial rise in operating losses for Reality Labs as it intensifies investments in augmented and virtual reality throughout 2024.


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