meta platforms (FB) late Wednesday reported first-quarter results that fell short of revenue, as did its second-quarter revenue guidance. But the company surprised investors as earnings came in better than expected. FB stock jumped after the close of business.
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The company reported adjusted earnings per share of $2.72 on sales of $27.9 billion. According to FactSet, analysts expected Meta to report earnings of $2.56 per share on sales of $28.3 billion.
FB shares are up 15.4% to 202.30 during after-hours trading on the stock exchange today.
Revenue increased 7% from the prior-year period. Daily active users rose 4% year-over-year to 1.96 billion, in line with estimates. And monthly active users grew 3% to 2.94 billion.
Meta expects revenue of between $28 billion and $30 billion for the second quarter. The median of $29 billion is below estimates of $30.7 billion.
Switching from the social network to the metaverse
Meta is undergoing a major and costly shift from social networks to the metaverse. It faces some other challenges.
For example, it continues to see sales declines because Apple changed its iPhone operating system to reduce ad tracking. It’s also facing increasing competition from TikTok and remains under pressure from antitrust allegations by Congress.
At the same time, digital advertising spending decisions remain in flux as many small and medium-sized businesses consider new channels away from meta for the first time.
In mid-April, two analysts lowered their target price on FB shares, raising concerns about the Russia-Ukraine conflict and its impact on European economies, as well as shifts in digital advertising.
FB stock is down about 46% this year.
FB Stock: Confidence in Long-Term Opportunities
“We made progress on a number of key company priorities this quarter, and we remain confident that our product roadmap will unlock long-term opportunity and growth,” Chief Executive Mark Zuckerberg said in a written statement accompanying the meta earnings release.
“Today, more people are using our services than ever before, and I’m proud of how our products are serving people around the world,” he said.
Meta expects spending of $87 billion to $92 billion in 2022. That’s below the previous guidance of $90 billion to $95 billion.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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