FirstFT: Meta rewards investors with first dividend and $50bn buyback

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Good morning. We start today with a round-up of the latest Big Tech results, leading with Meta, which has announced it will reward shareholders with its first-ever dividend and an additional $50bn in share buybacks.

The parent of Facebook and Instagram said the quarterly dividend of 50 cents per share was payable on March 26, in a sign of its continued recovery in growth after getting hit by an advertising slump in late 2022 and 2023. Bumper fourth-quarter results sent its shares up by more than 14 per cent in after-hours trading yesterday, adding more than $140bn in market capitalisation to Meta, whose value recently soared past $1tn.

Amazon also saw a boost in shares, with their price rising as much as 9 per cent after the company reported a bumper holiday season and forecast accelerating cloud growth. Sales at its cloud computing division AWS, a critical profit driver, rose 13 per cent to $24.2bn in the three months to December, edging up from the 12 per cent growth reported last quarter.

Investors were more wary about Apple due to ongoing concerns with sales in China, which were down at $20.8bn compared with $24bn for the same quarter the prior year. The company’s revenues returned to growth during the holiday period, beating analysts’ expectations with a boost from its services division and solid iPhone sales.

Shares were down more than 3 per cent in after-hours trading after the results yesterday.

• Meta’s first dividend: The payout is a “coming of age” moment for Mark Zuckerberg’s company as it hopes to persuade investors to stick with it while it makes costly bets on new products.

• Apple’s new headset: Chief executive Tim Cook’s legacy as an innovator is on the line as the iPhone maker releases it Vision Pro headset to US consumers today.

• More on Apple: Independent record labels behind artists including Phoebe Bridgers and Vampire Weekend are pushing back on the company’s plans to pay more money for songs recorded in higher-quality audio.

And here’s what I’m keeping tabs on today and the weekend:

• Economic data: The US is expected to have added fewer jobs last month when it publishes labour data today, while France reports monthly industrial production figures.

• Post Office scandal: Phase-four hearings in the UK public inquiry over the Horizon IT system concludes today with closing statements from “core participants”.

• EU-Asean: Delegates from the EU and the Association of Southeast Asian Nations meet in Brussels today to discuss co-operation on areas including trade, green initiatives and the digital transition.

• Results: Oil majors ExxonMobil and Chevron are expected to post drops in revenue and profits when they report today.

• Northern Ireland: The Stormont power-sharing executive could reconvene as early as tomorrow after MPs in Westminster passed laws to simplify crucial Brexit trade rules for the region and reaffirm its position as part of the UK.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Mounting losses from banks in the US, Asia and Europe have revived fears over the US commercial property market, which has been under pressure from lower occupancy levels and higher interest rates. Regional US lender New York Community Bancorp revealed it had taken large losses on loans tied to commercial property recently, while Japan’s Aozora Bank and Deutsche Bank warned about the risks from their exposure to US real estate. Here’s what analysts expect from the troubled sector.

2. The cost of UK carbon emissions permits has fallen to an all-time low, raising fears it will weaken the incentive to build cleaner renewable energy sources. Futures contracts tracking the UK carbon price to December dropped to £31.48 per tonne of carbon dioxide on Monday, recovering marginally yesterday to close at £36.71. Here’s why the cost of polluting has gone down.

• UK taxes: More than 1.1mn taxpayers missed the self-assessment filing deadline on Wednesday, a 10 per cent rise on last year, generating at least £110mn for HM Revenue & Customs.

3. McKinsey and BCG have been accused of withholding information on ties with Saudi Arabia, as a US congressional subpoena seeks documents related to their work with the kingdom’s sovereign wealth fund. The rivals are among four consulting firms summoned to explain themselves at a Senate committee hearing next week on the Gulf nation’s use of “soft power” in the US. Here’s what we know about the inquiry.

4. EU leaders vowed to ease the burden of environmental rules in an attempt to quell protests by farmers, who demolished statues and started fires in Brussels during a summit yesterday. European Commission president Ursula von der Leyen said more changes would be put forward this month to cut red tape for farmers and rethink a recent wave of climate-related legislation.

5. The Bank of England has said it needs “more evidence” that inflation will continue falling before it will cut interest rates after it held borrowing costs at 5.25 per cent yesterday. The UK central bank signalled it was ready to consider lowering rates for the first time since inflation surged following the Covid-19 pandemic, ditching previous warnings that “further tightening” of monetary policy might be needed. Here’s more on what it will take for the BoE to declare that “the job is done”.

For more on rate-setters and their battle against inflation, premium subscribers can sign up for our Central Banks newsletter by Chris Giles, or upgrade your subscription here.

News in-depth

An independent inquiry found a persistent “culture of excessive confidentiality” and “lack of transparency” at the UK’s biggest brownfield project, Teesworks, and recorded a catalogue of governance failures at two public bodies chaired by the Tees Valley’s Conservative mayor, Lord Ben Houchen. The findings raise questions not only for the devolved landscape in England, across which more mayoralties are being created, but also for Whitehall’s regulation of public spending.

We’re also reading . . . 

• The Traitors: Soumaya Keynes has found that the hit reality television series holds three economic lessons.

• Cost of living: At a time when Tory ministers can no longer afford to pay their mortgages, even the well-heeled need pawnbrokers, writes Claer Barrett.

• Department stores: The luxury establishments may be no more resilient to the trends ravaging the high street than any other ordinary retailer, writes Sam Jones.

• Cycle vs trend: Investors must brace themselves for bigger and more difficult choices, writes Goldman Sachs’s Peter Oppenheimer, as a new inflection point emerges in markets.

Chart of the day

UK and eurozone manufacturers said their supply chains deteriorated for the first time in a year in a sign of the wider disruption to trade caused by Red Sea attacks by Houthi militants, according to the closely watched S&P Global purchasing managers’ index survey published yesterday.

Take a break from the news

The enduring appeal of analogue technology is about much more than nostalgia, writes Deyan Sudjic. What can the digital world learn from devices such as radios and typewriters, which transformed our lives in the 20th century?

Additional contributions from Benjamin Wilhelm and Gordon Smith