Meta Platforms Inc (NASDAQ:META) stock rose 7.37% (As on July 27, 11:34:25 AM UTC-4, Source: Google Finance) after the company reported better-than-expected guidance after the social media giant’s second-quarter results that topped Wall Street expectations, driven by a jump in advertising revenue.
META in the second quarter of FY 23 has reported the adjusted earnings per share of $2.98, beating the analysts’ estimates for the adjusted earnings per share of $2.91. The company had reported the adjusted revenue growth of 11 percent to $32 billion in the second quarter of FY 23, beating the analysts’ estimates for revenue of $31.08 billion.
Meanwhile, beginning in 2022, the company had initiated several measures to pursue greater efficiency and to realign our business and strategic priorities. As of June 30, 2023, the company have substantially completed planned employee layoffs while continuing to assess facilities consolidation and data center restructuring initiatives. During the three and six months ended June 30, 2023, the company had recorded total restructuring charges of $705 million and $1.64 billion under the FoA segment, respectively, and $75 million and $286 million under the RL segment, respectively. These charges lowered the operating margin by two percentage points and three percentage points for the three and six months ended June 30, 2023, respectively.
The company expects third quarter 2023 total revenue to be in the range of $32-34.5 billion.
The company anticipates the full-year 2023 total expenses will be in the range of $88-91 billion, increased from the prior range of $86-90 billion due to legal-related expenses recorded in the second quarter of 2023. This outlook includes approximately $4 billion of restructuring costs related to facilities consolidation charges and severance and other personnel costs. The company expects Reality Labs operating losses to increase year-over-year in 2023.
In addition, the company expects higher infrastructure-related costs next year. The company expects depreciation expenses in 2024 to increase by a larger amount than in 2023 and also expects to incur higher operating costs from running a larger infrastructure footprint. The company anticipates growth in payroll expenses as we evolve our workforce composition toward higher-cost technical roles. For Reality Labs, the company expects operating losses to increase meaningfully year-over-year due to the ongoing product development efforts in augmented reality/virtual reality and investments to further scale the ecosystem. The company expects the full-year 2023 capital expenditures to be in the range of $27-30 billion, lowered from our prior estimate of $30-33 billion. The reduced forecast is due to both cost savings, particularly on non-AI servers, as well as shifts in capital expenditures into 2024 from delays in projects and equipment deliveries rather than a reduction in overall investment plans.