Meta earnings blast forecasts, but Facebook parent sees big capex increase

30 Oct 2024, 20:17 by Martin Baccardax · The Fresno Bee

Meta Platforms posted stronger-than-expected third quarter earnings Wednesday, as well as a boost in its overall user base, as the social media giant continues to invest billions in AI technologies to drive ad sales and customer growth.

Facebook parent Meta (META) said earnings for the three months ending in September were pegged at $6.03 per share, a 14.9% increase from the same period last year that firmly topped analysts' estimates of a $5.25 per share tally.

Group revenues, Meta said, rose 18.9% from last year to $40.59 billion, nearly all of it from advertising sales, and also topped Wall Street forecasts of a $40.3 billion total. The revenue growth, however, was slower than recorded over the three months ending in September and the weakest since the second quarter of last year.

Daily Active People, a key metric the company uses to define users that interact with at least one of its family of app, including Facebook, Instagram, WhatsApp or Messenger, rose 4.8% from last year to 3.29 billion.

Looking into the final three months of the year, Meta said it sees revenues in the region of $45 billion to $48 billion, while overall capex for the 2024 year was held largely in-line at between $38 billion to $40 billion. Meta also said it sees a "significant" increase in capex for 2025.

Meta CEO Mark Zuckerberg is pivoting from his prior efforts to develop virtual reality to an effective all-in bet on the power of AI technologies to deliver his vision for the the social media giant

"We had a good quarter driven by AI progress across our apps and business," said CEO Mark Zuckerberg. "We also have strong momentum with Meta AI, Llama adoption, and AI-powered glasses."

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Meta Platforms shares were marked 2.5% lower in after-hours trading immediately following the earnings release to indicate a Thursday opening bell price of $577.00 each, a move that would still leave the stock up nearly 70% for the year.

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