Meta Defies Expectations with Strong Q1 Earnings, but Shares Plunge on Weak Q2 Guidance and Increased Expenses

Menlo Park, California United States of America
Meta reported stronger-than-expected earnings for Q1 2024 with EPS of $4.71 and net income of $12.37 billion.
Meta's Reality Labs division is expected to report increased year-over-year operating losses as it builds out AI, AR, and VR efforts.
Meta's stock had been on a tear in the past year with shares climbing 131% over the last 12 months and more than 39% year to date.
Other tech giants like Google are also investing heavily in AI technology.
Shares plunged 16% in extended trading due to weak Q2 revenue guidance and increased expenses.
Total expenses increased from $94-$99 billion to between $96-$99 billion due to higher infrastructure and legal costs.
Meta Defies Expectations with Strong Q1 Earnings, but Shares Plunge on Weak Q2 Guidance and Increased Expenses

Meta, the parent company of Facebook, reported stronger-than-expected earnings for the first quarter of 2024. Mark Zuckerberg's tech giant surpassed expectations with earnings per share of $4.71 and net income more than doubling to $12.37 billion. However, Meta shares plunged 16% in extended trading after the company issued a weak revenue guidance for the second quarter.

Despite the disappointing Q2 outlook, Meta remains committed to its investments in artificial intelligence (AI) and product development. The company's CFO Susan Li announced an increase in total expenses from $94 billion-$99 billion to between $96 billion-$99 billion due to higher infrastructure and legal costs.

Meta has been under scrutiny for its aggressive spending on AI research, which includes the Reality Labs division. The company expects the division to report increased year-over-year operating losses as it builds out its various AI, AR, and VR efforts.

The tech giant's stock had been on a tear in the past year, with shares climbing 131% over the last 12 months and more than 39% year to date. However, Meta's stock price took a hit after the disappointing Q2 forecast and increased expenses.

Meta is not alone in its investment in AI. Other tech giants like Google are also investing heavily in this technology, which could lead to increased competition and innovation.

Despite the challenges, Meta remains optimistic about its future prospects. The company continues to focus on operating efficiently while scaling up its investments in AI and product development.

It is important to note that there have been concerns regarding the accuracy of some financial reports from mainstream media sources. As a neutral journalist, it is crucial to verify all information from multiple reliable sources before drawing any conclusions.


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Confidence

91%

Doubts
  • It is important to verify all information from multiple reliable sources before drawing any conclusions.
  • The accuracy of financial reports from mainstream media sources has been a concern.

Sources

88%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Mark Zuckerberg defends Meta’s AI spending spree as shares tumble

Financial Times Wednesday, 24 April 2024 23:59
  • Unique Points
    • Mark Zuckerberg defends Meta's AI spending spree
    • Shares of Meta are tumbling
  • Accuracy
    • ]Meta reported earnings of $4.71 per share in Q1 2024, surpassing expectations.[
    • Meta expects sales in the range of $36.5 billion to $39 billion for Q2 2024.
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (0%)
    None Found At Time Of Publication

91%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Meta plunges 16% on weak revenue guidance even as first-quarter results top estimates

CNBC News Ashley Capoot Wednesday, 24 April 2024 16:00
  • Unique Points
    • Meta reported earnings of $4.71 per share in Q1 2024, surpassing expectations.
    • Net income more than doubled to $12.37 billion in Q1 2024.
    • Meta cut about 21,000 jobs in the first half of 2023 and has kept hiring relatively minimal since then.
  • Accuracy
    • Meta expects sales in the range of $36.5 billion to $39 billion for Q2 2024, below analysts’ average estimate.
    • CEO Mark Zuckerberg discussed investments in areas like glasses and mixed reality, where Meta doesn’t currently make money.
  • Deception (70%)
    The article contains selective reporting as Meta's revenue growth and net income increase are highlighted, while the significant decrease in sales and marketing costs is not mentioned in the title or initial paragraph. The author also uses emotional manipulation by stating 'Meta shares plunged 16%' without providing context about why this might be expected given the company's previous financial performance.
    • Meta has been clawing back digital ad market share after a dismal 2022.
    • The stock sell-off accelerated early in the earnings call after CEO Mark Zuckerberg jumped into his discussion about investments, namely in areas like glasses and mixed reality, where the company doesn’t currently make money.
  • Fallacies (100%)
    None Found At Time Of Publication
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication

84%

The overall score is a weighted number that takes into account conflict of interest, bias, deception and other practices that undermine the credibility of the source. It is calculated as:
(Site Conflicts Of Interest + Author Conflicts Of Interest) / 2.0 * 0.2 + ArticleBiasScore * 0.20 + UniquePointsScore * 0.05 + DeceptionScore * 0.20 + ReadabilityScore * 0.05 + FallacyScore * 0.20

A score that takes into consideration the content for flow, interruptions with ads, and overt search engine optimization techniques that makes the content hard to understand

Meta stock plummets 15% after second quarter outlook disappoints

Yahoo Finance Daniel Howley Thursday, 25 April 2024 00:01
  • Unique Points
    • Meta CFO Susan Li raised the company’s full-year total expenses estimate from a range between $94 billion-$99 billion to between $96 billion-$99 billion due to higher infrastructure and legal costs.
    • CEO Mark Zuckerberg said Meta will continue investing aggressively in AI research and product development, leading to increased capital expenditures.
  • Accuracy
    • Meta's Q2 revenue is expected to be between $36.5 billion and $39 billion, falling short of midpoint estimates.
  • Deception (100%)
    None Found At Time Of Publication
  • Fallacies (85%)
    The author makes an appeal to authority when stating Meta's Q2 revenue will be between $36.5 billion and $39 billion, falling short of midpoint estimates of $38.24 billion (Fallacy: Appeal to Authority). The author also states that Meta continues to expect its Reality Labs division to report increased year-over-year operating losses without providing any context or evidence (Fallacy: Unsupported Conclusions).
    • > Meta says it will see second quarter revenue between $36.5 billion and $39 billion, falling short of midpoint estimates of $38.24 billion.
    • Meta continues to expect its Reality Labs division to report increased year-over-year operating losses.
  • Bias (100%)
    None Found At Time Of Publication
  • Site Conflicts Of Interest (100%)
    None Found At Time Of Publication
  • Author Conflicts Of Interest (100%)
    None Found At Time Of Publication