Meta platforms has surpassed analysts' expectations for second-quarter sales and provided a positive outlook for the current period, propelling its shares to climb 4.5 percent in after-hours trading.
According to a statement released on Wednesday, Meta's second-quarter revenue reached $32 billion, outpacing analysts' average projections of $31.1 billion. Additionally, the company forecasts sales for the current quarter to be in the range of $32 billion to $34.5 billion, exceeding average estimates.
Meta has been strategically focusing on its new Reels short-video feature, akin to competitor TikTok's format, to attract advertisers and generate increased user engagement on its platforms. This strategy has proven successful, reigniting advertisers' spending after a tightening of budgets across the industry in 2022.
Chief Executive Mark Zuckerberg's emphasis on efficiency has led to significant cost-cutting measures, including the elimination of thousands of jobs and teams. Investors have responded positively to this approach, leading to Meta's stock price more than doubling this year. In parallel, the company has heavily invested in artificial intelligence, utilising the technology to tailor content and advertising recommendations to users' interests.
For the second quarter, Meta reported a net income of $7.8 billion, equivalent to $2.98 per share, surpassing the average analyst estimate of $2.92 per share. The company boasts an impressive user base, with over 3 billion people using at least one of Meta's products daily.
Following the earnings report, Meta's shares surged to as high as $325 in extended trading, closing at $298.57.
Despite the focus on efficiency, Meta's continued investments in artificial intelligence and virtual reality have remained costly. The company anticipates total expenses of $88 billion to $91 billion in 2023, surpassing prior projections.
Meta's success in attracting advertisers to its new Reels feature and its ongoing efforts in the realm of artificial intelligence have positioned it for growth and solidified its position as a major player in the social media landscape. As the company continues to evolve, investors and industry experts are closely monitoring its performance and future developments.
