Facebook parent Meta declares first dividend, shares jump 12% | World News - Hindustan Times
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Facebook parent Meta declares first dividend, shares jump 12%

Reuters |
Feb 02, 2024 03:23 AM IST

Shares soared 12% after the bell, extending a long recovery in which Meta hit record highs in recent weeks for the first time in over two years.

Meta Platforms issued its first ever dividend days ahead of flagship social network Facebook's 20th anniversary, while reporting revenue that beat expectations as a result of robust ad and device sales in the holiday shopping period.

The Meta logo is displayed at the Vivatech show in Paris,(AP)
The Meta logo is displayed at the Vivatech show in Paris,(AP)

Shares soared 12% after the bell, extending a long recovery in which Meta hit record highs in recent weeks for the first time in over two years.

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The surge added about $130 billion to the company's stock market value, equivalent to five times the value of smaller rival Snap Inc.

The company, one of the tech sector's original unicorns, said the dividend would be 50 cents per share. It also announced it had authorized an additional $50 billion in share repurchases.

"We've made a lot of progress on our vision for advancing AI and the metaverse," Meta CEO Mark Zuckerberg said in a prepared statement.

Revenue rose 25% to $40.1 billion for the quarter ended Dec. 31. Analysts were expecting revenue of $39.2 billion, according to LSEG data.

Meta forecast first quarter revenue of $34.5 billion to $37 billion, above Wall Street expectations of $33.8 billion. It said it expects full-year 2024 total expenses to be unchanged at $94 billion to $99 billion.

On Tuesday, fellow digital ads heavyweight Alphabet posted results that disappointed Wall Street, after its holiday season advertising sales came in below expectations.

Shares of Meta, which also owns Instagram and WhatsApp, have been steadily climbing back from a meltdown in 2022 that wiped out more than three-quarters of the company's one-time value.

Its recovery has been aided by a rebound in user growth and digital ad sales. It also has shed more than 21,000 employees since late 2022.

Improvements to the social media business have made investors more tolerant of Meta's undiminished spending, with investments in "metaverse" technologies and billions to build out its artificial intelligence infrastructure.

The company's metaverse-oriented Reality Labs division handily beat revenue expectations for the fourth quarter, posting record sales of $1.1 billion. Investors had been expecting $804 million, according to LSEG data.

Meta said it still expected operating losses for Reality Labs to "increase meaningfully" as it invests more in augmented and virtual reality in 2024.

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