Meta's Stock Rises After Better-Than-Expected Q2 Earnings

By Jose Resurreccion

Aug 01, 2024 07:40 AM EDT

Visitors test Meta Quest 3 goggles at the booth of Meta Platforms at the Hanover technology Fair on April 22, 2024 in Hanover, northern Germany, with Norway as partner country.
(Photo : RONNY HARTMANN/AFP via Getty Images)

Shares of the big tech company Meta jumped by about 7% in extended trading Wednesday (July 31) after it exceeded Wall Street expectations on both revenue and profit for the second quarter of 2024.

According to LSEG estimates quoted by CNBC, the company was expected to have its shares valued at $4.73 each and accumulate a $38.31 billion revenue. In actuality, Meta's shares valued at $5.16 each and gained a revenue worth $39.07 billion.

Meta's Monetary Gains

The company, which owns Facebook and Instagram, reported its second-quarter revenue growth of 22% from $32 billion from the same period last year, making it the fourth straight quarter of growth that was above 20%.

On the other hand, net income jumped 73% to $13.47 billion from $7.79 billion a year earlier.

Meta also provided guidance for its third quarter target revenue of $38.5 billion to $41 billion, with analysts forecasting that the company would earn $39.1 billion.

It is understood that Meta's latest figures point to continued share gains in the digital ad market, which was the firm's core business.

Meta's Payout to Texas Part of Expenses

As for expenses, Meta spent $24.2 billion, including the $1.4 billion charge from its recent agreement to settle a facial recognition data lawsuit filed by the state of Texas.

It also reported quarterly capital expenditures worth $8.47 billion, which was below the $9.51 billion analysts expected.

Meta added that its expense outlook for the year remained unchanged at a figure between $96 billion and $99 billion, with its capital expenditures narrowed between $37 billion and $40 billion.

In a statement, Meta CEO Mark Zuckerberg said that the company had a "strong" quarter, and that it would be expecting Meta AI to become the "most used AI assistant in the world" by the end of the year.

He added that it released some of its AI products, while they also saw "good traction" with its current ones in the market.

Meta CFO Susan Li also said that the company planned to have more employees than what it had in 2023.

On the other hand, Forrester research director Mike Prolux told MarketWatch that Meta might have to pivot its metaverse ambitions to a "much more narrow focus" as it nears the Meta Connect event in September.