Meta Platforms surprised Wall Street with higher than expected profits and a return of Facebook to user growth, but the company's revenue forecasts for the current quarter came in cautiously. Its stock rose 19% in after-hours trading on Wednesday. Meta's earnings exceeded Wall Street's targets significantly, reaching $2.72 per share compared to the analysts' average estimate of $2.56, according to data from IBES by Refinitiv. However, the company's slowest revenue growth in 10 years overshadowed the better-than-expected profits.
Facebook's daily active users, a key metric for advertisers reflecting platform activity, reached 1.96 billion, slightly above the expected 1.95 billion, according to IBES. The number of monthly active users was 2.94 billion, which is 30 million lower than Wall Street's estimates. Meta has lost nearly half its value since the beginning of the year after a bleak earnings report in February when Facebook's daily active users declined for the first time. The company attributed this decline to factors including privacy changes by Apple and increased competition from platforms like the TikTok app owned by ByteDance.
According to IBES data from Refinitiv, total revenues, mostly coming from advertising sales, rose 7% to $27.91 billion in the first quarter, falling short of analysts' estimates of $28.20 billion. Meta projected revenue for the second quarter to range between $28 billion and $30 billion, while analysts expect average revenues for the current quarter to be $30.63 billion. The company stated that its forecasts reflect factors including the war in Ukraine, noting that it is monitoring the potential impact of regulatory moves in Europe.
