Meta Platforms Inc. achieved record-breaking Q1 profits, surpassing $12 billion, largely owing to the increased ad revenue
Meta Platforms Inc., the parent of social media heavyweights Instagram and Facebook, reported robust figures for the quarter ending March 2024. The company witnessed a sharp rise in its profits, largely owing to the increase in advertisement revenue. It reported a 6 per cent rise in average ad cost on its platform.
Meta's profit for January-March more than doubled, reaching $12.37 billion or $4.71 per share, up from $5.71 billion or $2.20 per share in the same period last year.
Meanwhile, revenue surged by 27 per cent to $36.46 billion as compared to $28.65 billion recorded in the previous year. In the upcoming quarter, Meta anticipates revenue ranging from $36.5 billion to $39 billion. As per a report by AP, analysts forecast second-quarter revenue at $38.25 billion, surpassing the midpoint of Meta's projected range.
Meta also mentioned that it is expecting higher capital expenses for 2024, primarily owing to the increased investments in artificial intelligence. The company now forecasts expenses between $35 billion and $40 billion, up from its initial estimate of $30 billion to $37 billion.
However, the shares of the tech giant, took a sharp fall by more than 15 per cent on NASDAQ.
“Meta’s earnings should serve as a stark warning for companies reporting this earnings season,” said Thomas Monteiro, senior analyst at Investing.com “Even though the company did beat estimates in all top- and bottom-line metrics, it didn’t matter as much as the reported lowering revenue expectations for Q2. This is the exact opposite of what Tesla did yesterday and goes to show that investors are currently looking at the near future with heavy mistrust.”
On an annual basis, the shares of the tech giant have given multibagging returns of 137 per cent on NASDAQ