Stephen Lam/Reuters
- Facebook parent Meta's stock jumped almost 19% in premarket trading Thursday after its Q4 earnings report.
- The tech giant missed on some earnings targets and said it would buy back $40 billion in shares.
- Its CEO Mark Zuckerberg pledged cost cuts in a "year of efficiency", a sign of more layoffs could come.
Facebook parent Meta's stock soared Thursday after CEO Mark Zuckerberg pledged to carry on cutting costs and to return around $40 billion in cash to investors via share buybacks.
Shares climbed almost 19% in premarket trading to around $181.71 at last check, after ending the previous regular session at $153.12.
The social media giant released its fourth-quarter earnings report after Wednesday's closing bell. It said its quarterly revenue fell 4% year-on-year to $32.17 billion, beating analysts' forecasts for $31.55 billion. Earnings were $1.76 a share, missing expectations for $2.26 a share, but the comparison is clouded by restructuring charges.
Looking ahead, the company projected first-quarter revenue of $26-28.5 billion, topping analyst estimates. The upbeat outlook comes as investors fret about the impact of a possible recession on companies' earnings.
Meta cut its expenses targets for 2023 by an additional $5 billion and said it would repurchase another $40 billion worth of shares from investors. Buybacks tend to be bullish for a stock because they reduce the total supply of shares on the market and show a company's faith in its own business model.
Zuckerberg said 2023 would be a "year of efficiency" as the tech giant tries to cut costs to save up some cash ahead of a potential economic downturn.
"Our management theme for 2023 is the 'year of efficiency', and we're focused on becoming a stronger and more nimble organization," he said.
Meta let go of more than 11,000 employees in November in a round of what Zuckerberg called "last resort" layoffs.
It's trying to cut costs to boost its profitability. A combination of rising interest rates, poor earnings performances and Wall Street's unwillingness to support a pivot to the metaverse weighed on the company, and Meta shares fell 61% in 2022.
Read more: Mark Zuckerberg declares 2023 'the year of efficiency.' More Meta layoffs are likely.