Meta Platforms Soars After Blasting Q1 Earnings Forecasts; Zuckerberg Sees More Cost Cuts

"We're becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision," said CEO Mark Zuckerberg.

Updated at 4:30 pm EST

Meta Platforms  (META) - Get Free Report posted better-than-expected first quarter earnings Wednesday, while forecasting solid near-term revenues, sending shares of the social media group soaring higher in after-hours trading.

The Facebook parent said profits for the three months ending in March were pegged at $2.20 per share, down 19.1% from the same period last year but firmly ahead of the Street consensus forecast of $20.3 per share.

Group revenues, Meta said, rose 2.65% to $28.65 billion, nearly all of it -- $28.1 billion -- coming from the new 'Family of Apps' division the company created last year, just ahead of analysts' estimates of a $27.41 billion tally. Ad impressions rose 26%, Meta said, although the average price per ad was down 17%.

Monthly active users across Meta's 'Family of Apps' was tabbed at 2.99 million, up 2% from last year, while daily active users were up 4% from last year at 2.03 billion, just ahead of the Street's 2.01 billion estimate.

Looking into the current quarter, Meta said it sees revenues in the region of $29.5 billion to $32 billion, a range that fall under the Street forecast of $32.3 billion. 

The group also narrowed its 2023 expense estimate for the third consecutive quarter to between $86 billion and $90 billion amid what Zuckerberg has described as a 'year of efficiency'.

"We had a good quarter and our community continues to grow," said CEO Mark Zuckerberg. "Our AI work is driving good results across our apps and business. We're also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long term vision." 

Meta shares were trading 9.7% higher in after-hours dealing following the first quarter earnings update, suggesting a Thursday opening bell price of $229.64 each, a move that would extend the stock's year-to-date advance to around 90%.

Zuckerberg, who deemed 2023 a "year of efficiency" for the social media group in late 2022, has executed a series of major headcount reductions over the past six months, including a recent spate of cuts that eliminated another 4,000 people from its global payroll.

The moves come amid a pullback in ad spending across major social media platforms and the relentless market share gains for China-based TikTok, which now has more than more than a billion active users across 154 countries. Steep losses in the group's Metaverse project have also pushed the company into cost-cutting mode.

Reality Labs, however, the division that houses the company's metaverse plans, will continue to see growing operating losses in the coming year.

Meta sad the division was $3.99 billion in the red for the three months ending in March, after generating just $339 million in revenues.