Facebook’s parent company META released its third-quarter results after the closing bell on Wednesday, with both revenue and bottom line exceeding analysts’ expectations. The company expects fourth-quarter sales of $45 billion to $48 billion. Analysts had expected $46.09 billion. The company also said it expects capital expenditures to increase significantly in 2025.
The tech giant’s stock price fell on Thursday following the report.
“We expect full-year 2024 capital spending to be in the range of $38 billion to $40 billion, up from the previous range of $37 billion to $40 billion,” said Susan, Meta’s chief financial officer.・Mr. Lee said in a statement.
“We continue to expect strong capital spending growth in 2025. In addition, given the back-end focused nature of 2024 capital spending, depreciation and operating We expect infrastructure spending growth to accelerate significantly next year as higher growth in costs is recognized” as part of the expanded infrastructure constellation. ”
In the third quarter, Meta had earnings per share (EPS) of $6.03 on revenue of $40.5 billion. Wall Street had expected EPS of $5.25 and revenue of $40.2 billion, according to analyst estimates compiled by Bloomberg. In the same period last year, the company had EPS of $4.50 and revenue of $34.1 billion.
Advertising revenue came in at $39.8 billion, compared to expectations of $39.7 billion, and revenue from Meta’s Reality Lab division, which includes sales of the Quest augmented reality headset, was $270 million. Analysts had expected revenue from the business to be $312 million. The division’s loss was $4.4 billion, compared with analysts’ expectations of $4.6 billion.
The social media giant is quickly becoming an artificial intelligence powerhouse in its own right, joining the likes of Microsoft (MSFT), Google (GOOG, GOOGL) and Amazon (AMZN), and investors are riding on it.
Meta’s AI strategy includes deploying the Llama family of models into consumer and advertiser products. We also offer our platform as open source software. To that end, Meta reported that organizations ranging from Accenture (ACN) and DoorDash (DASH) to Goldman Sachs (GS) are using Llama to develop their own AI software.
Meta’s earnings were announced following a report in The Information that the company is working on developing a unique search feature for its Meta AI service that will allow users to ask questions and get answers about current events. The goal is for Meta to no longer rely on Google or Microsoft’s search engines to answer specific user queries.
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The company also has a successful Meta Connect conference where it debuted a working prototype of Orion augmented reality glasses. The device is still in its early stages of development and is intended to function as glasses that allow users to converse with other users through holograms projected into the real world.
Meta CEO Mark Zuckerberg showed off a prototype of the company’s Orion augmented reality glasses at Meta Connect in October. (Andrei Sokolov/Photo Alliance via Getty Images) · Photo Alliance via Getty Images
CEO Mark Zuckerberg and his company also talked about the success of Meta’s increasingly popular Ray-Ban Meta smart glasses and debuted the entry-level augmented reality headset Quest 3S.
However, developing AI and hardware costs a lot of money. Meta reported capital expenditures of $9.2 billion for the quarter.
Beyond spending concerns, Meta is also facing a number of other lawsuits, including an FTC antitrust lawsuit alleging the company engages in illegal monopolistic behavior and a lawsuit alleging that Meta is harmful to the mental health of teens. It also faces high-profile legal challenges.
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Email Daniel Howley at dhowley@yahoofinance.com. Follow him on Twitter @Daniel Howley.
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