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What’s happening: Shares of Meta Platforms surged in after-hours trading on Wednesday, after the company released results for its first quarter.
What happened: The owner of Facebook, Instagram and WhatsApp reported better-than-expected results for its first quarter, with a surprising rebound in digital advertising sales.
Growth in daily active users also provided support to Meta’s quarterly results.
How were the results: The Menlo Park, California-based company reported single-digit sales growth for the first quarter.
Why it matters: Meta Platforms had announced a restructuring plan in 2022 to realign its business, which included the trimming of 21,000 jobs. The company ended the first quarter with 77,114 employees.
Meta has been upgrading its AI capabilities to boost its core business. Its spend on AI retooling resulted in an increase in capital expenditure to $7.1 billion in the quarter.
Facebook’s daily active users rose 4% year-over-year to 2.04 billion, while monthly active users came in at 2.99 billion, up 2% year-over-year. Meta reported family daily active users of 3.02 billion for the quarter, representing 5% year-over-year growth.
The company said ad impressions grew by 26% year-over-year, with a 17% decline in the average price per ad.
Meta Platforms repurchased $9.22 billion worth of shares in the first quarter and closed the quarter with $37.44 billion in cash and cash equivalents.
Management projected revenues of $29.5-$32 billion for the second quarter, versus Wall Street expectations of $29.53 billion.
How shares responded: Shares of Meta Platforms jumped 11.7% to $233.79 in the after-hours session on Wednesday, following the release of quarterly results. The stock had added around 114% over the past six months.
What to watch: Traders will keep an eye on Meta’s progress in AI and its investments in this area.
Context: European markets settled lower on Wednesday, with renewed concerns around the global banking sector.
Details: Investors grew cautious after First Republic Bank reported a 40% decline in deposits to $104.5 billion for the first quarter.
Sentiments improved slightly after London-based Standard Chartered reported 21% growth in pre-tax profit for the first quarter, beating market expectations. Despite this, European banking stocks lost around 0.2% on Wednesday.
Traders also assessed other major earnings reports. GSK’s shares edged higher after the company topped consensus estimates, with results being driven by its Shingrix vaccine sales.
Strong economic data also limited the overall losses in European stocks. Germany’s GfK Consumer Climate Indicator rose for a seventh consecutive month to a reading of -25.7 heading into May. France’s consumer confidence also rose improved to 83 in April, beating market estimates of 81.
The STOXX Europe 600 index fell 0.83% to close at 463.21 on Wednesday, with healthcare stocks down 2.5% and industrials losing around 1.4%. Germany’s DAX 40 lost 0.48% to reach 15,795.73, while France’s CAC 40 declined by 0.86% to 7,466.66 and London’s benchmark FTSE 100 fell 0.49% to 7,852.64.
What are expectations: Investors await economic data on economic sentiment indicator, consumer confidence indicator and industry confidence indicator from the eurozone today. The economic sentiment indicator in the Eurozone, which declined to 99.3 in March, is expected to increase to 99.8 in April. Analysts expect the consumer confidence indicator to rise 1.6 points to -17.5 in April, while the industry confidence indicator is projected to increase to 0.2, from -0.2 in March.
Other Markets: US trading indices closed mixed on Wednesday, with the Dow Jones index and S&P 500 down by 0.68% and 0.38%, respectively, and the Nasdaq 100 up by 0.64%.
Ukraine’s President Volodymr Zelensky spoke to China’s Xi Jinping over the phone, for the first time since the beginning of war with Russia. The safe-haven US dollar index fell slightly this morning.
Australia’s export prices rose by 1.6% during the three months to March, rebounding from a 0.9% decline in the previous period. The news lent support to the AUD/USD forex pair.
China’s industrial profits fell 21.4% year-over-year to 1,516.74 billion yuan during the first three months of the year, sending the CNY/USD pair lower in forex trading this morning.
Ireland’s KBC Bank consumer sentiment index rose to 59.2 in April, from 53.9 in the previous month. This being the strongest figure in 13 months lent support to the EUR/USD forex pair.
South Korea’s Business Survey Index for the manufacturing sector came in unchanged at 70 in April, which sent the KRW/USD pair slightly lower in forex trading this morning.
Spain’s unemployment rate, retail sales and industry confidence indicator, Turkey’s economic confidence index, Italy’s consumer confidence and manufacturing confidence, Eurozone’s consumer inflation expectations index, selling price expectations and services confidence indicator, Brazil’s IGP-M inflation and net payrolls, Canada’s CFIB business barometer long-term optimism index and average weekly earnings, Turkey’s foreign exchange reserves and Central bank of Turkey’s interest rate decision, Mexico’s balance of trade, US GDP growth rate, initial jobless claims, personal consumption expenditures, continuing jobless claims, core price index for personal consumption expenditures, pending home sales, natural gas stocks change and Kansas City Fed’s manufacturing production index, Argentina’s consumer confidence indicator, Indonesia’s foreign direct investments, as well as Australia’s CoreLogic home value index.
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