Meta Beats Expectations in First-Quarter Earnings Report but Stock Plunges on Growth Concerns

Meta, the company behind social media giants Facebook and Instagram, exceeded Wall Street‘s expectations in its first-quarter earnings report released on Wednesday. The tech giant reported a revenue of $36.46 billion and earnings per share of $4.71, both surpassing analyst estimates.

Despite the strong performance, Meta’s stock took a hit as the company projected slower growth for the upcoming quarter. The guidance of $36.5 billion to $39 billion in sales for the second quarter fell below average analyst estimates.

Additionally, Meta raised its full-year expense outlook, citing increased costs in its metaverse segment. This news further dampened investor sentiment, causing the stock to plummet by 10% in after-hours trading.

Meta’s robust growth in the first quarter is reflective of its focus on advertising, which accounts for the majority of its revenue. The company’s turnaround from a prolonged period of negative earnings growth to substantial profitability has been a key driver of its recent success.

On the other hand, Meta reported a $3.8 billion loss in its metaverse division, contributing to the unit’s total operating loss of approximately $37 billion over the past 2.5 years. CEO Mark Zuckerberg, who owns about 13% of Meta, is set to receive a significant dividend payment thanks to his shares in the company.

Overall, Meta’s performance in the first quarter has been a mix of impressive financial results and cautious outlooks, signaling a challenging road ahead for the tech giant as it grapples with evolving market dynamics.