Meta's Ad Business Continues To Rebound, Its Metaverse Efforts Continue to Advance But Its Moral Integrity Remains Questionable

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Last week, earnings from Microsoft Corporation (NASDAQ: MSFT), Google-parent Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL), Apple Inc (NASDAQ: AAPL) and Meta Platforms (NASDAQ: META) closed out January.

  • Amazon stock rose more than 8% on Thursday in after-hours trading as the e-commerce and cloud titan reported better than expected fourth quarter figures that showed its earnings bounced back.
  • Although Apple also surpassed Wall Street's estimates and reported for the first time in a year its revenue grew, its stock fell after-hours.
  • Microsoft reported a thriving bottom line along with impressive growth of its cloud business. But even Microsoft isn't immune to corporate layoffs that are still plaguing the tech industry.
  • Google also reported strong top and bottom-line figures but missed analyst estimates. Therefore, Google shares went down more than 6% upon earnings on Tuesday. Moreover, Google remains focused on cost-management.
But Meta did more than greatly surpass analyst estimates with its fourth quarter figures along with announcing its first ever dividend as it continues to work on making the metaverse happen with its Reality Labs division that hit $1 billion for the first time in the latest reported quarter.

Meta Reported Its Profit Tripled In The Last Three Months Of 2023

For the quarter ended in December, Meta reported its revenue jumped 25% YoY to $40.1 billion, surpassing LSEG's estimate of $39.18 billion as the ad business continued to rebound after a brutal 2022. Meta also lowered its expenses 8% YoY to $23.73 billion and as a result of efficient cost-cutting initiatives, its operating margin more than doubled to 41%. Therefore, net income more than tripled to $14 billion, or $5.33 per share. Earnings per share amounted to $5.33, also topping LSEG's estimate of $4.96.

Although its virtual reality unit recorded a loss of $4.65 billion, Reality Labs passed $1 billion for the first time which shows Meta continues to advance on the metaverse and AI front.

CEO Mark Zuckerberg also revealed that AI advances helped boost the company's ad business which grew faster than of its rival Google that earlier reported YoY growth of 11% for its latest quarter. Along with other social media executives, Zuckerberg was questioned during a law hearing on Wednesday for being accused for insufficient safety and design measures that have caused mental health issues for their children and even deaths by suicide. Zuckerberg has been working on restoring his image by examining ways to curb harm made by social media platforms, but these 'products' have created a lot of harm to the most fragile generations.

Outlook

Meta announced it pay its investors a dividend of 50 cents a share on March 26th.

Facebook parent guided for first-quarter sales in the range between $34.5 billion and $37 billion, topping analyst estimates of $33.8 billion. Meta also guided for 2024 expenses to be between $94 billion and $99 billion.

Like Google, Meta remains focused on keeping things lean. Although its greatest goal is to make the metaverse happen, it has perhaps an even harder task of having to prove its products are not harming the mental health and lives of its users. Moral integrity and responsibility for its actions is something all Big Tech still needs to live up to.