Meta shares jump as investors cheer dividend and $50bn buyback

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Meta, the parent of Facebook and Instagram, has announced its first ever dividend and an additional $50bn in share buybacks as bumper fourth-quarter results sent its shares up by more than 12 per cent in after-hours trading.

The social media group announced a quarterly dividend of 50 cents per share payable on March 26.

Revenues at Meta rose 25 per cent in the fourth quarter to $40.1bn, it said, beating analyst expectations of a rise to $39.1bn. Net income jumped 201 per cent to $14bn, beating consensus estimates of $13bn compiled by S&P Capital IQ.

Meta warned in October that macroeconomic uncertainty and lower advertising demand in response to conflict in the Middle East had made for a rockier start to the quarter. 

Meta’s chief executive Mark Zuckerberg had declared a “year of efficiency” in 2023, in which he slashed jobs and costs in order to rescue the company from a period of sluggish growth and respond to investor ire over his as yet unprofitable bet on the metaverse.

However he has also doubled down on artificial intelligence, this month outlining a longer-term vision to invest in “artificial general intelligence” and smart glasses that allow users to talk to an “AI agent”.

Meta on Thursday estimated full-year 2024 capital expenditures in the range of $30bn-$37bn, a $2bn increase on the high-end of it prior range, citing investment in AI and non-AI servers, as well as data centres.

Meta expects first-quarter revenues between $34.5bn-$37bn, above analysts’ consensus of a rise to $33.9bn, in a sign of strong digital advertising demand ahead.

The results came a day after Zuckerberg was singled out and repeatedly berated by irate senators at a Senate judiciary committee hearing on the topic of protecting children from harmful content. He was accused of failing to adequately police his apps and lying about their risks. In one dramatic moment, he was pushed to turn and apologise to a crowd of families present who said their children had been harmed on his platforms.

The scene underscored the legal and political pressure that companies like Meta are under to clamp down on content on their sites that harm younger people, as they balance their desire to attract a new generation of users as growth has stalled, with concerns about social media’s impact on their safety and mental health.