Despite reporting stronger-than-expected sales and earnings for the first quarter, Meta’s share price dropped by 15%. Analysts had predicted lower sales and income figures, but Meta surpassed these estimates.
Despite this, Meta’s investors showed disappointment when the company lowered its sales forecast for the upcoming quarter.
The company’s revenue expanded by approximately 27%, reaching around $29.0 billion. This significant growth nearly quadrupled their net income, amounting to $12.37 billion. By decreasing sales and marketing costs, the firm managed to lower expenses and boost operating margins, consequently leading to a profit increase of roughly 16%.
Meta estimates that its sales for the second quarter of this year will fall between $36.5 billion and $41 billion. Additionally, the company intends to spend between $35 billion and $40 billion on capital expenditures in 2024, with a large chunk going towards AI advancements.
Investors’ worries reached the Reality Labs sector of the company, which consistently reported daily losses. In the first quarter, Reality Labs generated sales of $440 million but incurred losses totaling $3.85 billion.
Despite this, there are lingering disadvantages for Meta. It remains to be seen if Mark Zuckerberg, Meta’s CEO, can successfully persuade the public that the Metaverse is the future of interaction.
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2024-04-25 04:52