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International | Technology

Zuckerberg wins on Wall Street after Washington hit

Mark Zuckerberg's Meta had a bad day in Washington this week. But on Wall Street, it took a victory lap.

The social media firm updated investors with a slew of good news: quarterly profits that tripled year-on-year to more than $14bn (£11bn), a surge in users, lower costs and higher ad sales.

Even its much ridiculed, money-losing virtual reality unit hit a milestone, generating $1bn in revenue.

Lest anyone doubt its confidence, the company declared a first-ever dividend.

That is a payout to shareholders - in this case of 50 cents per share.

The company, owner of Facebook, Instagram and WhatsApp, also pledged to keep the money flowing, saying it was in a strong financial position, and could invest in the business while still making plans for such payments on a quarterly basis "going forward".

Shares in the company, already at record highs, surged more than 12% in after-hours trade.

Analysts said the decision to offer a divided was a sign of maturity, as Facebook approaches its 20th birthday.

It confirmed the shift in investor sentiment from 2022, when shares in the company had swooned and a high-profile investor wrote a public letter to Mr Zuckerberg that the company had "drifted into the land of excess — too many people, too many ideas, too little urgency" and "needed to get its "mojo back"

Elsewhere in big tech, business was also good.

Amazon sales leaped 14% year-on-year during the September-December period. At Apple, revenue returned to growth for the first time in a year.

But Meta's performance was the most head-spinning, coming just a day after it faced blistering critique in Washington, where senators told Mr Zuckerberg that his product was "killing people" and he was pushed to apologise to families of victims of child sexual exploitation.

Speaking to analysts on Thursday, Meta acknowledged that it was facing regulatory challenges that could "significantly" affect its business.

But it spent little time on the topic.

And for now, whatever the product may be doing, there is little doubt that people, and advertisers, are sticking with it.

Meta said nearly 3.2 billion people were active on one of its platforms daily in December, up 8% year-on-year.

Revenue in the September-December period grew 25% year-on-year to more than $40bn.

Meanwhile the cost cutting drive that Mr Zuckerberg launched last year, which included thousands of job reductions, helped push expenses down 8%. Head count was 22% lower.

Jasmine Engberg, principal analyst at Insider Intelligence, said the company had exceeded expectations, as its investment in using AI to enhance advertising paid off.

"It was a stellar Q4," she said. ""Meta's 2023 earnings are cause for more celebration as Facebook's 20th anniversary nears."

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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.