Meta shares climb after revenue, forecast beat estimates in Q2

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Meta Platforms Inc topped forecasts for second-quarter sales and gave a rosy outlook for the current period, signalling that the social networking giant is succeeding in migrating advertisers to its new Reels short-video feature.
The company said second-quarter revenue was $32 billion, compared with analysts’ average projections for $31.1 billion. In a statement, Meta said sales in the current quarter will be $32 billion to $34.5 billion, also topping average estimates.
Shares of Meta climbed 8% during pre-market trading in New York on Thursday, after closing at $298.57.
The company is betting on Reels — short-form videos that are similar to what users see on rival TikTok — to draw more attention to its social networks, Facebook and Instagram.
The format has succeeded in increasing usage, and is now also helping draw advertisers, reigniting their spending after an industry-wide budget tightening in 2022.
Meta has been cutting thousands of jobs and teams in what Chief Executive Officer Mark Zuckerberg calls its “year of efficiency.” Investors have rewarded the strategy, causing the company’s stock price to more than double so far this year.
Meta has also been investing heavily in artificial intelligence, using the technology to make recommendations — for both content and advertising — more tailored to users’ interests.
Net income in the second quarter was $7.8 billion, or $2.98 per share, compared with the $2.92-per-share average analyst estimate. More than 3 billion people use at least one of Meta’s products every day, the company said.
Investments in artificial intelligence, as well as the company’s virtual reality efforts, have continued to be expensive, despite the efficiency mandate. Meta said total expenses will be $88 billion to $91 billion in 2023, more than prior projections.