After 2023's "year of efficiency" that saw Meta Platform Inc. shed more than a fifth of its staff, the social-media giant on Thursday started off 2024 with a big reward for investors - in the form of its first-ever dividend, as well as quarterly results that beat expectations, thanks to a surge in digital-ad sales.
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As the social-media giant prepares to deliver a quarterly dividend of 50 cents a share, its CEO said last year's belt-tightening will help it navigate an uncertain future. In the process, Meta shares (META) soared 15.2% to $454.82 after hours on Thursday, toward what would be an all- time record high. The stock rose 1.2% in the day's regular trading.
The advance came as Meta - the parent of Facebook, Instagram and WhatsApp - prepares to spend billions of additional dollars on tech infrastructure to support greater AI capabilities for users and businesses. The company said it expects to spend between $30 billion and $37 billion this year, a $2 billion increase from the high point of its prior range, as it invests in servers and data centers.
Chief Executive Mark Zuckerberg said during an earnings call Thursday that becoming a leaner company last year helped Meta run better and gave it flexibility to make longer-term investments in AI and the metaverse. New hires, he said, would be slim compared to historical levels - a trend he said could continue beyond this year.
"A big part of why I wanted to improve our profitability is to give ourselves the ability to go through what is a somewhat unpredictable and volatile period over the next five or ten years," Zuckerberg said.
"There are different risk factors that are geopolitical or regulatory or different things," he continued. "But also the technology landscape is somewhat unknown, and we want the ability to be able to surge investments on things like building our larger training clusters, or in just making different investments where that's necessary."
The tech conglomerate slashed headcount by 22% to 67,317 in 2023, which it called a "year of efficiency." During the earnings call, Zuckerberg said that Meta would be pushing forward on building out an AI assistant and making digital advertising more sophisticated.
Chief Financial Officer Susan Li said that the company expected to maintain an active stock-buyback program - historically, its primary means of investor payouts. But she said the company was "modestly evolving" its approach via a regular dividend.
Meta reported fourth-quarter net income of $14.02 billion, or $5.33 a share, compared with net income of $4.65 billion, or $1.76 a share, in the year-earlier period. Revenue expanded 25% to $40.11 billion, from $32.2 billion in the year-ago quarter.
Analysts surveyed by FactSet had, on average, expected net income of $4.82 a share on revenue of $39.1 billion.
Shares of Meta have catapulted 109.1% over the past 12 months as of Thursday's close, while the broader S&P 500 index SPX has increased 17.4%.
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