META Platforms Inc. (NASDAQ: META) exceeded analyst expectations in its latest quarterly report, reporting a 27% year-over-year increase in revenue, surpassing estimates by 4% for operating income and approximately 9% for earnings per share (EPS). Despite this strong performance, META stock faced a downturn in after-hours trading, experiencing a drop of around 13%.
The after-hours selloff follows META’s announcement of an adjustment to its capital expenditure forecast for the 2024 fiscal year, with the range now set at $35 billion to $40 billion, an increase from the previous estimate of $30 billion to $37 billion. This marks a midpoint increase of approximately $4 billion, or around 12%. Additionally, the company revised its total expenses projection to $96 billion to $99 billion, narrowing the prior range of $94 billion to $99 billion.
META’s revenue increase slightly outperformed Wall Street forecasts, showing a 1% edge. Operating income also surpassed expectations, reflecting a 37.9% margin. For the second quarter, META provided a revenue guidance range of $36.5 billion to $39 billion, indicating a potential 18% year-over-year growth at the midpoint, though slightly below the $37.8 billion anticipated by analysts. The high end of the guidance suggests a potential 22% year-over-year increase.
According to Evercore ISI analysts, the after-market stock reaction may reflect elevated investor expectations, given META’s substantial year-to-date rally of around 40% prior to the earnings report. The analysts suggest that maintaining the stock’s level would have required a clear ‘Beat & Raise’ outcome, which did not materialize.
META Platforms Inc.’s financial performance signals its ongoing resilience and growth prospects, as highlighted in the recent earnings report. InvestingPro’s insights provide a deeper understanding of the company’s position, showcasing its robust market capitalization, solid revenue growth, and impressive gross profit margin. The additional InvestingPro Tips offer a comprehensive analysis of META’s financial health and potential, providing valuable information for investors seeking to make informed decisions regarding the company’s stock.
