Meta Platforms report first dividend while shares soar

Meta Platforms, the parent company of social media giant Facebook, has made a significant move just days ahead of Facebook's 20th anniversary. According to Reuters, the tech behemoth issued its first-ever dividend and reported impressive financials, surpassing revenue and profit expectations driven by robust holiday ad sales.

Following the announcement, shares of Meta soared over 14 per cent after hours, propelling the company's market valuation up by more than $140 billion. This surge, part of Meta's long recovery, signifies a major milestone for the tech sector.

Meta's dividend declaration, a historic move for a tech giant, comes at 50 cents per share, signalling a departure from the traditional model in the industry. The company also authorised an additional $50 billion in share repurchases.

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This makes Meta the first among its generation of internet steamrollers to issue a dividend, breaking new ground in a sector that has long been dominated by a handful of companies. Founded in 2004, Meta has evolved into the world's largest social media company, connecting over 3 billion people and revolutionising digital interactions.

Despite its impressive financial achievements, Meta has not been immune to controversies. Accusations of neglecting user privacy and enabling incitements to violence have plagued the company's growth trajectory. Just a day before the financial results, Meta's CEO Mark Zuckerberg testified before the US Senate regarding child safety online, offering apologies to parents of children who experienced sexual abuses.

In response to the ups and downs, Zuckerberg shared a reflective message on Thursday. "You're never as good as they say when you're up, or as bad as they say when you're down. Just keep building and doing good work over long periods of time,” Reuters quoted him as saying.

The financial results for Meta's fourth quarter demonstrated an impressive performance. Revenue rose by 25 per cent to $40.1 billion, surpassing analyst expectations. Net income surged over 200 per cent to $14 billion, or $5.33 per share, exceeding expectations.

The recovery of Meta's shares over the past year, after a meltdown in 2022, has been attributed to factors like increased investor excitement about artificial intelligence, rebounding user growth, and digital ad sales. The company's strategic austerity measures, involving shedding more than 21,000 employees, have also played a role.

Looking forward, Meta forecasts a first-quarter revenue of $34.5 billion to $37 billion, surpassing Wall Street expectations. The company anticipates total expenses for the full year 2024 to remain unchanged at $94 billion to $99 billion.

Meta's commitment to investments in the metaverse and artificial intelligence remains unwavering. Despite operating losses in its metaverse-oriented Reality Labs unit, the company continues to aggressively invest in augmented and virtual reality. Executives highlight the success of the latest version of Ray-Ban smart glasses, equipped with a built-in AI assistant, signalling potential shifts in consumer preferences.Bottom of Form

(With inputs from Reuters)