Published - February 2, 2023 @ 11:38 AM (EET)
On Wednesday, shares of Meta Platforms Inc. (NASDAQ:META) soared 20% amid fourth-quarter revenue that beat Wall Street estimates, while Chief Executive Officer Mark Zuckerberg called 2023 the "Year of Efficiency."
Striking a new tone with investors, Zuckerberg said the social media giant would be leaner, more efficient, and more decisive this year, with a big assist from artificial intelligence.
For the quarter, Meta reported a revenue decline of 4% year-over-year to $32.17 billion, showing relative resilience to current market conditions and better than the more than 6% decline analysts feared.
More significantly, the parent of Instagram and Facebook, which share price plunged 64% in 2022, vowed it would focus more on immediate problems, like sending users the most relevant videos at the right time and making significant revenue from messaging products.
Zuckerberg said the company is using AI to improve how it recommends content and help its engineers be more productive.
While Meta is still suffering from declining digital ads demand, the social media behemoth pointed to industries where businesses are spending more, such as health and travel.
EARNINGS
Meta posted a net profit of $4.7 billion for the fourth quarter compared with the average $6 billion analysts were expecting. Though the numbers represent a 55% decline from the year-ago period, it was still higher than the three months through September.
Elsewhere, Zuckerberg is committed to cost cuts and increasing profitability, with Meta lowering its estimates for total expenses in 2023 to be in the range of $89 billion to $95 billion, down from its previous outlook of $94 to $100 billion.
Meta further emphasized its devotion to cutting projects that aren't performing or may no longer be crucial and removing middle management layers for fast decision-making. In late 2021, Meta cut more than 11,000 jobs, the first time the company announced significant layoffs.
Looking ahead, Meta forecasted first-quarter revenue between $269 billion and $28.5 billion, in line with analysts average estimates of $27.14 billion.
Among the encouraging takeaways from Meta's earnings report and adding to the $10.9 billion remaining from previous repurchasing programs, the company also boosted its stock-buyback authorization by $40 billion.
If Wednesday's gains hold, it will set up Meta's shares for their most significant intraday surge in a decade, adding more than $75.5 billion to its existing $401 billion market capitalization.
