Meta Platforms is set to report its first quarter 2023 earnings after the market close on Wednesday, April 26, and investors will be on the lookout for any mention of the company’s artificial intelligence (AI) plans.
The parent company of Facebook, Instagram, and WhatsApp has shifted its focus from the metaverse to AI as, like other Big Tech firms, the company seeks to capitalize on the recent AI frenzy sparked by the popularity of OpenAI’s chatbot ChatGPT.
On the earnings front, Meta is expected to report its sixth straight quarter of declines when it comes to its bottom line, as the advertising market remains soft while costs rise.
Earnings per share are expected to drop to $1.96, per the Zacks Consensus Estimate (ZCE), compared to earnings per share of $2.72 in the first quarter of 2022.
Revenue is also set to fall from $27.9 billion in the year-ago quarter to $27.49 billion, per the ZCE.
Investors will be also looking at the company’s metaverse spend, with Meta’s Reality Labs’ losses expected to grow year-over-year.
Reality Labs is expected to report a loss of $3.8 billion in the first quarter, up from a loss of $2.96 billion for the same period last year. However, this would be an improvement quarter-over-quarter, with Meta posting a $4.28 billion loss from Reality Labs in 4Q 2022.
The impact of Meta’s cost-cutting initiatives, including reducing its headcount, will also be scrutinized.
Since November of last year, Meta said it will be cutting 21,000 jobs with its workforce expected to be down by about 8,000 staff from the fourth quarter to 78,300 at the end of March.
Meta's shares had moved higher ahead of its results, up 2% at US$211.67 in after-hours trading on Tuesday.
-- Updated with share price --
Contact the author at emily.jarvie@proactiveinvestors.com
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