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Meta logo: profit above forecasts

Photo: Rafael Henrique/dpa

Meta wants to pay a dividend for the first time after a strong financial year. The owners will receive 50 US cents per share, the Facebook company said. They also want to buy back additional shares with a volume of $50 billion. Meta shares then rose about 14 percent in after-hours US trading.

Thanks to robust advertising revenue, the Internet company was able to surprisingly increase its sales by a quarter in the past quarter - to $40.1 billion. Earnings of $5.33 per share also exceeded forecasts. "This was one of the most impressive quarters - both in itself and compared to expectations," said analyst Mark Mahaney from investment bank Evercore ISI. The group's share price increased by a whopping 194 percent in 2023.

However, analyst Debra Aho Williamson pointed out that the metaverse and artificial intelligence (AI) technologies promoted by company boss Mark Zuckerberg have so far hardly brought any money into the coffers. Accordingly, Zuckerberg Meta recently prescribed austerity measures; he spoke of a “year of efficiency”.

Quest data glasses absorb AI losses

Nevertheless, business was going well. "Meta is still a social media company that gets almost all of its revenue from advertising, and advertisers still love Meta," Williamson said. Google's parent Alphabet, on the other hand, announced disappointing revenue from online advertising a few days ago.

Meta, which also includes Instagram and WhatsApp, is investing billions in AI and the virtual world Metaverse. To do this, the company buys hundreds of thousands of special chips from Nvidia and other providers for the necessary high-performance computers. A few days ago, Zuckerberg wrote in a blog post that the third version of the company's own language model Llama, with which Meta ChatGPT wants to compete, is currently being trained.

Because of the continued high investments, which the group estimates at $94 to 99 billion for the current year, the operating loss of the “Reality Labs” division, which, among other things, bundles the development of Metaverse and AI, will “increase significantly.” However, thanks to strong sales of the Quest smart glasses, this division posted record sales of $1.1 billion, about a quarter more than expected.

The topic of AI plays a major role in many companies. Of the companies listed in the US leading index S&P 500, almost 40 percent mentioned this technology at press conferences about their business figures. This was revealed by an examination of the transcripts by the Reuters news agency. The frontrunners were Microsoft and Google parent Alphabet, where the terms AI or artificial intelligence appeared more than 50 times each.

April/Reuters