Meta Stock Surges 18% As Q1 Earnings Beat Expectations
Meta shares jump in after-hours trading after the company reports first-quarter earnings that exceed profit estimates. However, the social media giant posts disappointing revenue growth and misses on several key user metrics.
Meta shares jump 18% in extended trading after the company reports first-quarter earnings per share of $2.72, beating analyst expectations of $2.56. This positive surprise provides a significant relief for investors following a brutal fourth-quarter report in February that sent the stock down 26%. Despite the after-hours rally, the stock remains down nearly 50% for the year.
While the company beats expectations for profit and average revenue per user, it misses estimates on several other key metrics. Monthly active users come in at 2.94 billion, falling short of the expected 2.97 billion, and revenue reaches $27.91 billion against a $28.2 billion target. Revenue growth rises just 7%, marking the first time in Facebook's 10-year history as a public company that growth lands in the single digits.
The company provides a second-quarter revenue forecast of $28 billion to $30 billion, trailing analyst estimates of $30.6 billion. Meta attributes the soft revenue growth to ongoing macroeconomic trends, specifically noting that the slowdown coincides with the war in Ukraine. Daily active users do show a slight rebound to 1.96 billion after declining in the previous quarter.