The stock of Meta Platforms (META) is up 8% after the technology giant reported second-quarter financial results that topped Wall Street forecasts.
The Silicon Valley-based company announced earnings per share (EPS) $5.16 U.S., which beat consensus estimates that called for $4.73 U.S. The profit was up 73% from a year earlier.
Revenue in the April through June quarter totaled $39.07 billion U.S., which was ahead of the $38.31 billion U.S. that had been expected.
Meta’s revenue was up 22% from a year earlier, marking the fourth consecutive quarter of sales growth in excess of 20%.
The strong results were ascribed to a rise in the company’s core digital advertising business.
Advertising revenue across Meta Platform’s social media sites that include Facebook and Instagram rose 22% from a year earlier.
The company reported having 3.27 billion daily active people (DAP) on its social media platforms at the end of Q2, matching Wall Street estimates.
Meta’s financial performance also continues to get a boost from cost-cutting measures being undertaken at the company.
Coming out of the Covid-19 pandemic, Meta cut 21,000 jobs over multiple rounds of layoffs. Consequently, Meta’s operating margin has grown to 38% from 29% a year ago.
If there’s an area of concern at Meta Platforms, it is with the company’s continued spending on technological innovations, especially artificial intelligence (A.I.).
Meta continues to spend heavily on A.I. and other cutting-edge technologies, as well as data centre infrastructure and computing resources.
The company reported capital expenditures of $8.47 billion U.S. for this year’s second quarter, which was below the $9.51 billion U.S. that Wall Street had estimated.
However, Meta said that its expense outlook for the year remains unchanged at $96 billion U.S. to $99 billion U.S.
Meta’s Reality Labs unit, which houses virtual reality and other technologies, lost $4.48 billion U.S. in Q2 of this year. Since 2020, Reality Labs has lost a total of $50 billion U.S.
Looking ahead, Meta provided revenue guidance for the current third quarter of $38.5 billion U.S. to $41 billion U.S., or $39.75 billion U.S. at the midpoint.
Prior to today (August 1), the stock of Meta Platforms had risen 47% over the last 12 months to trade at $474.83 U.S. per share.
