Decline in sales at Meta not as bad as expected
Facebook's Meta Group performed better than expected in the past quarter despite a renewed decline in revenue. Despite austerity measures, Zuckerberg continues to make virtual reality cost a lot of money.
Meta also ramped up share buybacks by $40 billion and founder and chief executive Mark Zuckerberg held out the prospect of further cost cuts.
Zuckerberg said 2023 should be a "year of efficiency" for the Group. The focus is on being "stronger and more nimble," he said. Meta will remove layers in middle management so decisions are made faster, he said. Projects that don't produce the desired results will be stopped more quickly, he said.
11,000 jobs eliminated
Meta had already announced last fall that it would cut around 11,000 jobs. The Group now recorded restructuring costs of $4.2 billion for the quarter. In the current year, expenses are also expected to be lower than previously estimated, among other things due to lower investments in data centers.
Mt business pillars Facebook and Instagram, Meta had already been hit by the cooling of the online advertising market in previous quarters. Now, it said, there have been signs of recovery in travel and healthcare ads. Bottom line, quarterly profit fell 55 percent to $4.65 billion.
Meanwhile, user numbers continue to grow. Facebook now has two billion daily active users - an increase of 16 million within three months. At least one app from Meta was used by 2.96 billion users per day, up from 2.93 billion three months earlier.
Despite the new austerity, the Group continues to let the controversial development of digital worlds under the buzzword "Metaverse" cost a lot of money. The Reality Labs division, which bundles the virtual reality business, posted an operating loss of around $4.3 billion in the past quarter.
This also included restructuring costs, said Chief Financial Officer Susan Li. For the full year 2022, the operating loss added up to $13.7 billion - on sales of just $2.16 billion.
Chief Financial Officer Li reiterated earlier projections that the Reality Labs loss would be even higher this year. Zuckerberg had declared the Metaverse the future of the company and changed the corporate name from Facebook to Meta (Werbewoche.ch reported).
Artificial language intelligence
Zuckerberg now also highlighted artificial intelligence software such as ChatGPT, which can mimic human speech or independently generate images from text descriptions, as an "exciting area." Meta is aiming for a leading role in such technologies, he said. At the same time, the aim is to reduce the currently high costs of computing power for such applications through greater efficiency.
For the current quarter, Meta forecast sales of between $26 billion and $28.5 billion. At least closer to the upper end of the range, this is above analysts' expectations of a good 27 billion. And the Group could thus manage an increase in revenue even after several quarters of shrinking revenue - the comparable figure from the first quarter of 2022 is $27.9 billion. (SDA)