Illustration: Shoshana Gordon/Axios
Meta investors got a double dose of good news on Wednesday. The Facebook parent company reported better-than-expected quarterly results and won a favorable ruling from the judge overseeing the FTC’s move to block a virtual reality acquisition.
Why it matters: Meta’s positive earnings come amid dour reports from many other flagship tech firms that are struggling in a softening economy.
- Meta reported quarterly revenue of $32.16 billion, ahead of Wall Street estimates of approximately $31.5 billion. It also raised its authorized stock buyback by $40 billion and said to expect revenue of between $26 billion and $28.5 billion for the current quarter, which runs through the end of March.
- Earlier in the day, a judge gave Meta the go-ahead to buy virtual reality fitness startup Within, rejecting the Federal Trade Commission’s bid to block the acquisition. Per Bloomberg, U.S. District Judge Edward Davila made the ruling in sealed court documents, adding that Meta must wait a week before closing the deal to give the agency time to appeal his decision.
- Shares of Meta surged more than 17% in after-hours trading Wednesday following the earnings report.
The big picture: Meta has been retrenching of late, announcing plans to lay off workers, cut some hardware projects and scale back its investments in real estate and data centers.
- As part of Wednesday’s earnings report, Meta said it took a restructuring charge of $4.2 billion in the fourth quarter.
Be smart: The company’s optimistic forecast contrasts with the outlook from competitor Snap Inc., this week, which told investors that it expects revenue to decline 2%-10% in the current quarter.
Yes, but: Meta’s Reality Labs unit — which is spearheading its metaverse projects — lost $4.27 billion last quarter, bringing its total losses for the year to $13.71 billion. The unit generated $2.15 billion in revenue last year, down slightly from $2.27 billion in 2021.
Between the lines: The company has also managed to be less in the spotlight in recent months thanks to upheavals at Elon Musk’s Twitter, as well as recent regulatory moves against Microsoft and Google.
What to watch: The FTC is set to start a separate trial to block the Within deal in its own administrative court on February 13, though it could opt not to move forward after the ruling in California.
— to news.google.com