Meta shares pop 12% after company reports first sales increase in four quarters, issues optimistic guidance
Mark Zuckerberg, chief executive officer of Meta Platforms Inc., center, departs from federal court in San Jose, Calif., on Dec. 20, 2022.
David Paul Morris | Bloomberg | Getty Images
Meta shares jumped 12% in extended trading on Wednesday after the company reported an unexpected increase in sales for the first quarter and issued better-than-expected guidance for the current period.
Here are the key numbers:
- Earnings: $2.20 per share.
- Revenue: $28.65 billion vs $27.65 billion expected by analysts, according to Refinitiv.
- Daily Active Users (DAUs): $2.04 billion vs $2.01 billion expected, according to StreetAccount.
- Monthly Active Users (MAUs): $2.99 billion vs $2.99 billion expected, according to StreetAccount.
- Average Revenue per User (ARPU): $9.62 vs $9.30 expected, according to StreetAccount.
Meta’s first-quarter sales rose 3% from $27.91 billion a year earlier, after three straight periods in which revenue declined. It wasn’t immediately clear if the company’s figure was comparable to analyst projections of $2.03.
For the second quarter, Meta expects revenue of between $29.5 billion and $32 billion, while analysts were expecting sales of $29.5 billion, according to Refinitiv.
“We had a good quarter and our community continues to grow,” Meta CEO Mark Zuckerberg said in a statement. The company is “becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision,” he said.
Meta’s Reality Labs unit, which is developing the virtual reality and augmented reality technologies for the metaverse, brought in $339 million in sales but logged an operating loss of $3.99 billion. The company added that operating losses in Reality Labs will increase this year.
Net income companywide fell 23% to $5.7 billion, or $2.20 per share, from $7.47 billion, or $2.72 per share, in the same quarter last year.
Meta said that total expenses for 2023 will be in the range of $86 billion to $90 billion. That figure includes restructuring costs that range between $3 billion to $5 billion.
Capital expenditures will remain in the range of $30 billion to 33 billion. That figure accounts for its increased artificial intelligence investments and its ad-supported products like the newsfeed and Reels, the company said.
The after-market rally further boosted a stock that’s been on an upward trend since Zuckerberg announced in February that 2023 would be the company’s “year of efficiency.”
The shares lost two-thirds of their value in 2022, but were up 74% this year, prior to the earnings report. Including the post-report surge on Wednesday to over $234, the shares are up about 164% from their November 2022 low of around $89.
Investors have rallied around Zuckerberg’s plans to slim down his company through a series of layoffs, resulting in some 21,000 expected job cuts. The revenue base had been shrinking from a battered online advertising market and the lingering effects of Apple’s 2021 iOS privacy update that dramatically limited ad targeting capabilities.
Google parent Alphabet, which dominates the online ad market along with Meta, reported first-quarter results on Tuesday that beat analysts’ expectations, though ad revenue fell from the prior year.
Executives will address analysts and investors on an earnings call beginning at 5 p.m. ET.
Cheng Xin | Getty Images
Applied Digital shares jumped 16% on Friday after the company posted strong first-quarter revenue that was boosted by artificial intelligence data center demand, putting the stock up more than 350% for the year.
Here’s how the company did compared to LSEG estimates:
- Loss per share: Loss of 7 cents vs. a loss of 13 cents expected
- Revenue: $64.2 million vs. $50 million expected
First quarter revenue of $64.2 million was up 84% from a year ago, when it reported $34.85 million in revenue.
The data center company reported earnings after the bell on Thursday.
During the quarter, Applied Digital built on its $7 billion lease agreement with CoreWeave that was announced in June for another 150 megawatts at the firm’s Polaris Forge 1 campus in North Dakota. The additional capacity brings the anticipated contracted lease revenue for the project up to $11 billion.
“With hyperscalers expected to invest approximately $350 billion into AI deployment this year, we believe we are in a prime position to serve as the modern-day picks and shovels of the intelligence era,” CEO Wes Cummins said in a release.
The new 150 MW building will join two other data cell blocks, each hosting 100 MW and 150 MW. The company noted that one building is nearly complete and construction will begin on the other.
Applied Digital also secured funding from Macquarie Equipment Capital for a second campus in North Dakota, dubbed Polaris Forge 2. The estimated $3 billion factory will hold two 150 MW buildings, bringing the total leased capacity to 600 MW across both campuses.
An initial 200 MW of power is expected to come online in 2026 and reach full capacity in 2027, the company said.
The company had a net loss of $18.5 million in the first quarter, a loss of 7 cents per share. A year ago, the company posted a net loss of $4.29 million, a loss of 3 cents per share.
Analysts polled by LSEG expect a loss of 15 cents per share for the second quarter on revenue of $76 million.
Applied Digital 5-year stock chart.
Cheng Xin | Getty Images
Rocket Lab shares have added more than a quarter in value this week as the aerospace company inked new launch deals in the burgeoning space tech industry.
The stock was flat on Friday, but has surged over 20% this week. Shares were up nearly 50% over the last two weeks and traded near fresh highs on Friday.
The stock has nearly tripled since the start of the year.
On Friday, the company said it secured two launches with the Japan Aerospace Exploration Agency, scheduled for December and in 2026.
Earlier in the week, Rocket Lab announced a multi-launch agreement with Japanese space start Q-shu Pioneers of Space. That’s on top of four contracted missions.
Late last month, the company also secured 10 additional launch missions for Synspective, bringing its total with the Japanese satellite company to 21. The first is scheduled for later this month.
Rocket Lab’s extreme stock movement could also be a result of some short covering, which occurs when short sellers buy a security to close a position and mitigate losses. Short interest accounted for nearly 14% of Rocket Lab’s float at the end of September.
Investors have poured more money into the space sector this year as the government greenlights more contracts and funding.
The space sector, currently dominated by billionaire-backed ventures like Elon Musk‘s SpaceX, has also seen a wave of initial public offerings this year from the likes of Firefly Aerospace, Voyager Technologies and Karman Holdings.
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