Meta shares soar as Facebook owner forecasts upbeat first-quarter revenue

Shares of peers Alphabet (the parent company of Google) and Snap also rose after the social media giant issued its upbeat revenue outlook.

Meta (Facebook) said in November it would cut more than 11,000 jobs. Picture: Brian Lawless/PA

Meta (Facebook) last night forecasted stricter control of expenses this year and first-quarter sales that could beat Wall Street estimates, sending shares soaring 19% in after-hours trade.

The world's biggest social media company cut its cost outlook for 2023 by $5bn (€4.55bn) and expanded its share buyback programme by $40bn.

The parent company of Instagram and Facebook forecast revenue between $26bn and $28.5bn, compared with analysts' average estimates of $27.14bn, according to IBES data from Refinitiv.

Shares of peers Alphabet (the parent company of Google) and Snap also rose.

The digital ad giant faced a brutal 2022 as companies cut back on marketing spending due to economic worries, while rivals such as TikTok captured younger users and Apple's privacy updates continued to challenge the business of placing targeted ads.

Meta's forecast is an indication that the ad market may be recovering as companies increase their marketing budgets, after a long pause due to macroeconomic uncertainties.

Net income for the fourth quarter ended December 31, however, fell to $4.65bn, or $1.76 per share, compared with $10.29bn, or $3.67 per share, a year earlier, largely due to a $4.2bn charge related to cost-cutting moves such as layoffs.

Meta said in November that it would cut more than 11,000 jobs, or 13% of its workforce, as the Facebook parent doubled down on its risky metaverse bet amid a crumbling advertising market and decades-high inflation.

The mass layoffs were the first in Meta's 18-year history. Thousands of job cuts were announced at other tech companies , including Elon Musk-owned Twitter, Microsoft, Snap, Google, Amazon, and Stripe, which all employ significant numbers of people in Ireland.

Meanwhile, FedEx is cutting global officer jobs by more than 10%, the courier’s latest cost-saving measure as economic concerns and waning e-commerce weigh on demand for package delivery. 

The company plans to consolidate some teams and functions in addition to the headcount reduction, part of an effort to become a “more efficient, agile organisation”, chief executive Raj Subramaniam said. 

The latest cuts bring FedEx’s total employee reductions to 12,000 since June, a spokeswoman said.

Reuters. Additional reporting Irish Examiner