What happened
Shares of Meta Platforms (META -0.52%) were soaring after the social media giant beat revenue estimates in its fourth-quarter earnings report and slashed expenses, paving the way to a return to profit growth in 2023.
As of 10:19 a.m. ET, the stock was up 21.1%.
Image source: Meta Platforms.
So what
Meta's headline numbers weren't particularly impressive, but they seemed to show the company turning the corner after a brutal 2022.
Revenue in the quarter fell 4% but was up 2% in constant currency to $32.2 billion, which beat estimates at $31.5 billion.
On the bottom line, earnings per share plunged by 52% to $1.76, which missed analyst estimates at $2.22, but that decline was primarily due to $4.2 billion in restructuring charges related to layoffs and closing offices and data centers. Adjusting for those, the company reported $3 in earnings per share, which was well ahead of analyst expectations.
Meta also slashed its expense guidance for 2023, saying total expenses would be $89 billion to $95 billion in 2023, down $5 billion to $6 billion from its previous forecast, and it also cut its capital expenditure guidance by $4 billion to a range between $30 billion and $33 billion.
Calling 2023 a "year of efficiency," CEO Mark Zuckerberg said the company was focused on becoming "a more nimble organization," a sign that it was committed to controlling costs and driving profitable growth.
Now what
Looking ahead to the first quarter, management expects another decline in revenue, calling for revenue of $26 billion to $28.5 billion, which is down by about 3% at the midpoint from the quarter a year ago and even with the analyst consensus at $27.14 billion.
Meta didn't give full-year guidance, but Zuckerberg said on the earnings call that he expected the company to return to profitable growth.
While the social media leader is still facing challenges, the results and cost-cutting efforts seem to have reassured investors that Meta can control its spending and profitability. With the stock still down by roughly half from its 2021 peak, there's still plenty of room to run if it can execute on Zuckerberg's goals.
