The net profit of the Meta corporation (recognized as extremist in the Russian Federation and banned), which owns the social network Facebook, in the first quarter decreased by 21%, to $ 7.5 billion. The corporation’s revenue during this period increased by 7%, amounting to $ 27.9 billion. Profit turned out to be slightly higher than analysts’ forecasts, and revenue was slightly lower: they expected $7 billion and $28.2 billion, respectively. However, the number of Facebook daily active users increased quarter-on-quarter by 1.6% to 1.96 billion after a slight decline in the fourth quarter of 2021. The increase in the number of subscribers inspired investors – Meta shares jumped 19% after the publication of the financial statements.
Keep in mind that over the past year, Meta shares have fallen by 50%. After a highly disappointing 2021 report in February, its stock plunged more than 26% on weak quarterly results, declining active users and modest guidance.
According to experts, yesterday’s growth in stocks is associated not only with better-than-expected profits and growth in the number of users, but also with the statements of Mark Zuckerberg, the founder of Meta, that are closer to reality. He said that the corporation will cut costs and invest in artificial intelligence-based tools to improve the system of recommendations and advertising. Previously, Mr. Zuckerberg talked a lot about creating a metaverse as the main goal of the company – however, as analysts say, these plans will require billions of dollars, but may not have a positive impact on the corporation’s business in the coming years.
At the same time, Meta’s problems persist, as evidenced by the second consecutive quarter of declining profits – the first in the company’s history. “Meta is battling headwinds from user engagement to advertising to growth. There is a feeling that the company has not yet figured out all the changes from the iPhone (we are talking about new Apple privacy rules that limited the collection of user information used for targeted advertising.— Kommersant) to a slowdown in user growth,” said Daniel Ives, an analyst at Wedbush Securities.
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