Meta reported strong first-quarter earnings of $36.46 billion in sales and $4.71 in earnings per share, beating Wall Street expectations. However, the company projected slower growth for the upcoming quarter, with sales expected to be between $36.5 billion and $39 billion, below analyst estimates. Meta also raised its full-year expense outlook due to increasing costs in its metaverse segment, leading to a 10% drop in its stock price in after-hours trading.
Despite its struggles in previous quarters, Meta has seen a significant recovery in profitability. The company, primarily an advertising firm, has continued to grow its top line after a period of negative year-over-year earnings growth. This growth has been positively received by investors, with Meta’s stock reaching a new all-time high of $531 earlier this month. The company faced criticism for its expansion into the metaverse, but has proven attractive for its ability to control costs while growing revenue.
In the first quarter, Meta reported a $3.8 billion loss in its metaverse division, adding to a total operating loss of $37 billion since its inception. Despite this, CEO Mark Zuckerberg stands to receive a massive dividend payment of $172.7 million, thanks to his ownership of 345.5 million shares in the company. This payment is a small portion of Zuckerberg’s overall fortune, which Forbes estimates at around $173 billion, making him the fourth-richest person in the world.
The news of Meta’s impressive earnings and projected slowdown in growth has caused the company’s stock to drop to around $440 per share in after-hours trading. This marks a significant decline from its recent peak and could potentially be the lowest price for Meta since February 1. Investors may be concerned about the impact of increased expenses on the company’s profitability and future growth potential in the metaverse segment.
As Meta faces challenges with slowing growth and rising expenses, Zuckerberg’s leadership will be crucial in navigating the company through these headwinds. Despite the setbacks, Meta remains a dominant player in the advertising industry, with its core focus on generating revenue through ads. How the company manages its costs and explores new opportunities, such as the metaverse, will determine its future success in the evolving digital landscape. Investors will be closely watching Meta’s performance in the coming quarters to assess its ability to adapt and thrive in a rapidly changing market.
