Facebook user numbers climb, Meta stock jumps

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Meta’s net profit beat market expectations in the first quarter. The number of daily active users on Facebook, its main platform, is also above estimates. The action soared in early trading on Wall Street.

Interpreting quarterly results from Facebook and Instagram owner, Meta Platforms

turns out to be rather complicated, as they alternate the good and the less good.

$2.72

Per share

Net earnings per share came in at $2.72, down from analysts’ expectation of $2.56

On the one hand, the parent company of Facebook reported on Wednesday the weakest growth in turnover for ten years. This was impacted by shrinking advertisers’ marketing budgets, due to uncertain global economic growth and the war in Ukraine. The total turnover of the company, most of which comes from the sale of advertisements, thus increased “by only” 7%, to reach 27.91 billion dollars in the first quarter, missing, in passing, analysts’ expectations. These expected, on average, $28.20 billion, according to IBES data from Refinitiv.

Its revenue forecast for the current quarter also disappointed Wall Street’s expectations.

The other, its net earnings per share rose to $2.72, while analysts had expected $2.56, according to Refinitiv data. Additionally, the internet giant reported a number of daily active users on Facebook higher than Wall Street estimates. This key metric for advertisers, which reflects activity on the platform, was thus 1.96 billion, slightly higher than the estimate of 1.95 billion, according to IBES data from Refinitiv.

According to the first exchanges on Wall Street this Thursday, investors seem rather to appreciate these results, however mixed. The action indeed jumped more than 15% at the opening, before slightly reducing its gains to 12%, around 4 p.m.

2ᵉ stock market slap avoided

It must be said that Meta has tasted quite a bit on the stock market lately. Before the publication of its results on Wednesday evening, the company had even lost almost half of its value since the beginning of the year.



“We don’t think overall FB activity has changed much over the past 90 days, but the headwinds related to iOS changes, competition from TikTok and monetization of ‘Reels’ are better understood”

Doug Anmuth

JP Morgan Principal Analyst

If the title soars this Thursday, however, Wall Street analysts are taking a cautious tone on the stock. They express, in fact, a series of concerns ranging from the war in Ukraine, to the changes in policy of the App Store, passing by the competition of TikTok. As proof: At least five brokerages cut their price targets on the stock, while three raised their expectations, according to Reuters.

“We don’t think overall FB activity has changed much over the past 90 days, but the headwinds related to iOS changes, competition from TikTok and monetization of ‘Reels’ are better understood,” said thus indicated Doug Anmuth, principal analyst of JP Morgan, in a note.

As a reminder, last year Apple updated the iPhone operating systemasking, for example, each app to obtain permission from iPhone and iPad users to be tracked for advertising purposes.

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