Zuckerberg Wins On Wall Street After Washington Hit

Mark Zuckerberg’s Meta had a horrible day in Washington this week. On Wall Street, however, it celebrated its victory.

The social media company provided investors with a flood of positive news, including quarterly profits that tripled yearly to more than $14 billion (£11 billion), increased users, cheaper costs, and increased ad revenue.

Even its much-maligned, money-losing virtual reality unit achieved a milestone by generating $1 billion in revenue.

To reassure investors, the firm declared its first dividend.

Zuckerberg Wins On Wall Street After Washington Hit

In this case, that is a dividend to shareholders at 50 cents per share.

The corporation, which owns Facebook, Instagram, and WhatsApp, also committed to keeping the money flowing, stating that it was in a strong financial position and could invest in the business while continuing to pay quarterly payments “going forward”.

The company’s shares, already at record highs, rose by more than 12% in after-hours trading.

Analysts said Facebook’s decision to pay a dividend showed maturity as it approaches its twentieth birthday.

It confirmed the shift in investor sentiment from 2022 when shares in the company had swooned, and a high-profile investor wrote a public letter to Mr Zuckerberg saying the company had “drifted into the land of excess — too many people, too many ideas, too little urgency” and “needed to get its “mojo back.”

Business was also booming in other areas of big tech.

Zuckerberg Wins On Wall Street After Washington Hit

Amazon sales increased 14% year on year from September to December. It outperformed analysts’ profit projections after experiencing a robust increase in seasonal online shopping, supported by steady expansion in its cloud computing sector.

Amazon shares rose more than 8% in after-hours trading.

Apple’s revenue increased for the first time in a year, while its earnings were above estimates due to increased iPhone sales. However, Apple shares fell 3% in after-hours trading as it predicted a drop in iPhone sales due to intense competition in China.

Meta’s performance was the most surprising, coming just a day after it received harsh criticism in Washington, where senators warned Mr Zuckerberg that his product was “killing people” and pressed him to apologise to families of victims of child sexual abuse.

Speaking to analysts on Thursday, Meta admitted facing regulatory issues that might “significantly” impact its company.

But it spent little time on the subject.

Zuckerberg Wins On Wall Street After Washington Hit

And, for now, whatever the product does, there is little question that users and advertisers will continue with it.

Meta reported that approximately 3.2 billion individuals used one of its platforms daily in December, an 8% increase year on year.

From September to December, revenue increased by 25% yearly to more than $40 billion.

Meanwhile, Mr Zuckerberg’s cost-cutting drive last year, which included thousands of job cuts, helped reduce spending by 8%. The headcount was 22% lower.

According to Jasmine Engberg, chief analyst at Insider Intelligence, the corporation outperformed expectations after investing in AI to improve advertising.

“It was a stellar Q4,” she remarked. “”As Facebook’s 20th anniversary approaches, Meta’s 2023 earnings provide even more reason to celebrate.”

SOURCE – (BBC)