Meta Stock Surges 14% After Announcing First-Ever Dividend and Strong Quarterly Earnings
Tech giant Meta experienced a substantial stock surge of over 14% in after-hours trading on Thursday following its robust quarterly earnings report, surpassing Wall Street expectations and marking a remarkable turnaround from its self-declared “year of efficiency.” The company reported profits exceeding $14 billion for the three months ending in December, reflecting a remarkable 200% year-over-year growth. Quarterly sales also rose by 25% to exceed $40 billion.
In a significant move for investors, Meta declared its inaugural cash dividend of $0.50 per share, scheduled for payment on March 26 to shareholders of record as of February 22. Additionally, the company announced a $50 billion share buyback, aiming to enhance stock prices and reward investors.
The positive financial results underscore Meta’s successful implementation of cost-cutting measures, including layoffs, as part of its efficiency-focused strategy initiated by CEO Mark Zuckerberg in 2023. The full-year profits for 2023 reached $39 billion, showcasing a 69% year-over-year growth.
CEO Mark Zuckerberg expressed gratitude to employees, partners, shareholders, and the community, stating, “Our communities are growing, and our businesses are back on track. A big thank you to all of our employees, partners, shareholders, and everyone in our community for sticking with us and making 2023 such a success.”
The earnings report follows Zuckerberg’s recent appearance on Capitol Hill, where he apologized to parents for the impact of Meta’s platforms on young users. Despite this, Meta reported a 6% year-over-year growth in Facebook daily active users, surpassing 2.1 billion.
In a strategic shift, Meta CFO Susan Li announced that the company will no longer report Facebook user numbers but will focus on daily active people across its family of apps, totaling an average of 3.19 billion in December.
Meta’s commitment to artificial intelligence (AI) investment was highlighted in the report, with Zuckerberg previously stating that AI would be the company’s primary investment area in 2024. Meta expects full-year capital expenditures between $30 billion and $37 billion, with a significant portion allocated to AI and non-AI servers and data centers.
The company anticipates increasing infrastructure investments beyond 2024 to support its ambitious long-term AI research and product development efforts. Despite posting over $16 billion in losses for its Reality Labs unit in 2023, Meta continues to heavily invest in building the metaverse, showcasing its commitment to virtual and augmented reality technologies.
