Shares of social media giant Meta Platforms surged over 14% in extended trading on Thursday, after the company reported better-than-expected fourth quarter results and announced a surprise $0.50 per share quarterly dividend. It marked the company’s first-ever dividend payment, alongside plans for a $50 billion share buyback.
The dividend declaration seemed to energize investors, even as revenue and earnings topped Wall Street expectations. Meta earned $5.33 per share for the quarter on revenue of $40.1 billion. The revenue figure represented 25% year-over-year growth, the best rate of expansion the company has seen since mid-2021.
Operating income more than doubled to $17.2 billion, which translated into a 41% operating margin. That was also substantially improved from a year ago. Higher revenue and cost discipline helped triple net income over the same quarter last year.
A rebound in advertising spending, as the digital ad market has improved, provided a tailwind. Chinese advertisers were called out as a key driver of growth on the conference call. Their ad spending on platforms like Facebook and Instagram accounted for 5 percentage points of total company revenue growth in the quarter.
Looking ahead, Meta issued a Q1 revenue outlook that also topped estimates. It expects ad rates will “remain stable or grow modestly in 2023,” according to CFO Susan Li. The results added to an already spirited rally for the stock over the past year. With 2022’s brutal selloff firmly in the rearview mirror, Meta has nearly tripled off its lows amid the turnaround.
