Meta’s shares kept rising on Thursday as the company exceeded Q1 profit expectations.
Meta exceeded analysts’ expected earnings per share of $2.56, reporting $2.72. Nonetheless, its revenue fell short of estimates, coming in at $27.91 billion.
At 9 a.m. ET, Meta’s stock had risen by 14% in pre-market trading, although it remains down roughly 40% since the beginning of 2022. This decline is in line with other tech stocks that plummeted due to concerns about increasing inflation, the Ukraine conflict, and the resurgence of Covid lockdowns in China.
Meta’s latest quarterly results were a mixture of positive and negative outcomes, and the expectations were not very high beforehand.
In February, Meta alarmed investors by releasing a disappointing fourth-quarter report, revealing a decline in daily active users for the first time ever. However, in Q1, the company reported a slight increase in daily active users, from 1.93 billion to 1.96 billion.
After changing its group name from Facebook last year, the company is investing heavily in realizing CEO Mark Zuckerberg’s “metaverse” vision, an imagined digital world that includes work, leisure, and commerce.
While contending with competition from the Chinese short-form video platform TikTok, Meta reported a 7% increase in Q1 sales compared to the previous year. This is the first time in its ten-year history as a publicly traded company that Meta’s revenue has grown in the single digits.
Meta is projecting Q2 revenue to be in the range of $28 billion to $30 billion. Achieving the midpoint of this range would indicate the company’s first ever year-on-year decline in quarterly turnover.