Meta Platforms (META), the owner of Facebook, provided investors with a much needed boost in the fourth quarter of 2022 as they vowed to make 2023 a “Year of Efficiency” for the embattled social media giant. The company announced $40 billion in new share repurchases on top of recent job reductions, causing Meta stock to soar 23.3% to close at 188.77 on the stock market today.
The earnings report follows a difficult year for Meta, which announced plans in November to cut 11,000 jobs, representing 13% of their workforce. Meta also reported adjusted earnings of $1.76 a share on revenue of $32.16 billion, surpassing analyst expectations of $31.55 billion. For the first quarter of 2023, the company expects revenue in the range of $26 billion to $28.5 billion, with the midpoint of $27.25 billion surpassing estimates of $27.1 billion.
Meta also reached a milestone, with Facebook reaching 2 billion daily active users, surpassing analyst expectations of 1.99 billion. Like other social media companies, Meta is facing macroeconomic weakness and a painful drop in digital advertising, which accounts for nearly all of their revenue.
Meta also experienced a revenue loss of $10 billion last year after Apple (AAPL) changed privacy policies for the iPhone, making it more difficult to accurately target users with ads. However, the company has made technology improvements with their ad strategy approach, leading Credit Suisse analyst Stephen Ju to expect gradual improvements to Meta’s revenue dollar growth.
Meta plans to pour billions into the development of the so-called metaverse, and their Relative Strength Rating is 72 out of a best-possible 99.