Meta shares surge 19% post Q1 earnings

Shares of Facebook parent Meta Platform Inc's rallied 19 per cent in after-hours trade on Wednesday after the company reported earnings that beat estimates.

Meta's profit beat Wall Street targets at $2.72 per share, against an average analyst estimate of $2.56. However, the earnings were also marred by the slowest revenue growth in a decade.

Daily active users (DAU), a key metric for advertisers, came in at 1.96 billion, slightly more than the estimate of 1.95 billion. However, monthly active users were reported at 2.94 billion, missing Wall Street estimates by 30 million.

Meta's share has fallen nearly 50 per cent since the start of 2022 after weak earnings for February. Facebook's daily active users had fallen for the first time with the social media giant predicting a gloomy quarter, blaming factors such as Apple's privacy changes and increased competition from platforms like ByteDance's TikTok.

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Total revenue, the bulk of which comes from ad sales, climbed 7 per cent to $27.91 billion in the first quarter, but fell elow analysts' estimates of $28.20 billion.

Chief Financial Officer Dave Wehner cited factors such as a slowdown in ecommerce after rapid growth during the COVID-19 pandemic, as well as a revenue loss in Russia and reduced ad demand amid global economic uncertainty.

On the call, Zuckerberg also talked about previous warnings about the challenges of engagement shifting toward features like its short video offering Reels, which generates less revenue than other ad formats.

 (With inputs from Reuters)