Meta posts lower profit, unveils stock buyback

Facebook parent company Meta posted lower fourthquarter profit and revenue on Wednesday, hurt by a downturn in the online advertising market and competition from rivals such as Tiktok.

But the company's stock soared in extended trading, as its revenue beat Wall Street's muted expectations and the Menlo Park, California-based company announced a $40 billion stock buyback.

This is the third consecutive quarter of revenue decline for the tech giant, which laid off 11,000 workers, or about 13 per cent of its workforce, in November. CEO Mark Zuckerberg blamed the layoffs on aggressive hiring during the pandemic, when Meta's business boomed because people were stuck at home, scrolling on their phones and computers, glued to social media. But as the lockdowns ended and people started going outside again, revenue growth began to falter.

“(Our) management theme for 2023 is the ‘Year of Efficiency' and we're focused on becoming a stronger and more nimble organization,” Zuckerberg said in a statement Wednesday.

Meta's mega stock buyback appeared to ease investors' concerns over the company's spending on the “metaverse” — an immersive digital universe, viewed through a headset, that Zuckerberg predicts will eventually replace smartphones as the primary way people use technology.

Meta Platforms Inc. said it earned $4.65 billion, or $1.76 per share, in the final three months of 2022. That's down 55 per cent from $10.29 billion, or $3.67 per share, a year earlier.

Analysts were expecting earnings of $2.26 per share, according to a poll by Factset.

Revenue fell four per cent to $32.17 billion from $33.67 billion. Analysts were expecting $31.55 billion.

Meta ended 2022 with a one per cent revenue decline from 2021 — its first year-over-year drop. “The downturn was slightly less than we thought it would be, but that's not necessarily a good sign,” said said Insider Intelligence analyst Debra Aho Williamson. — ap