Mark Zuckerberg’s Meta Platforms on Wednesday reported a 55% fall in quarterly profit, hurt by a hefty charge related to cost-cutting moves like layoffs, office closures and an overhaul of its data center strategy.
Net income for the fourth quarter ending Dec. 31 fell to $4.65 billion, or $1.76 per share, compared with $10.29 billion, or $3.67 per share, a year earlier, the parent company of Instagram and Facebook reported.
The digital ad giant faced a brutal 2022 as companies cut back on marketing spend due to economic worries, while rivals like TikTok captured younger users and Apple’s privacy updates continued to challenge the business of placing targeted ads.
However, Meta forecast first-quarter revenue above Wall Street estimates, signaling a rebound in demand for digital ads after months of weak sales.
Zuckerberg’s firm forecast revenue between $26 billion and $28.5 billion, compared with analysts’ average estimates of $27.14 billion, according to IBES data from Refinitiv.
Meta’s forecast is an indication that the ad market may be recovering as companies increase their marketing budgets, after a long pause due to macroeconomic uncertainties.
Meta shares, which lost almost two-thirds of their value in 2022, were up about 10% in extended trading.
[Written in collaboration with other media outlets with information from the following sources]
