MONEY & BUSINESS: Meta reveals dividend plans, Apple slumps in China, Amazon soars as tech earnings hit
Meta announced plans for its first-ever dividend and Amazon posted strong earnings, while Apple reported a sales slowdown in its key China market as three of the biggest tech stocks reported quarterly earnings on Thursday.
The Big Tech behemoths, three of the so-called “Magnificent Seven,” have driven a market resurgence – though optimism has cooled in recent days as layoffs hammered the sector.
Mark Zuckerberg-led Meta reported better-than-expected earnings, sending shares soaring more than 14% in after-hours trading – and boosting its market capitalization by a whopping $130 billion.
The Facebook and Instagram parent said the dividend would be 50 cents per share of common stock, with payouts to be dispersed on March 26. The company also announced $50 billion in share buybacks.
“We intend to pay a cash dividend on a quarterly basis going forward, subject to market conditions and approval by our board of directors,” the company said in a statement.
The announcement was a positive development for Meta shareholders just one day after Zuckerberg was thrashed by Senate lawmakers on Capitol Hill over the company’s failure to protect kids from online sexual exploitation and abuse.
Meta reported fourth-quarter earnings of $5.33 per share. Revenue jumped 25% to $40.1 billion. Both figures exceeded projections, according to LSEG data.
“We had a good quarter as our community and business continue to grow,” Zuckerberg said in a statement. “We’ve made a lot of progress on our vision for advancing AI and the metaverse.”
The social media firm said it expects sales of up to $37 billion in its first fiscal quarter of 2024, which was also higher than analysts expected.
Apple’s results were a mixed bag. The company’s stock sank less than 2% in post-market trading as investors digested signs of a widening slump in China.
Apple’s sales in the region plunged by 13% to $20.8 billion in the first quarter – lower than the $23.5 billion expected by analysts and the smallest figure since 2020, according to Bloomberg data.
On the positive side, the company snapped a streak of four-straight sales declines, as revenue rose 2% to $119.58 billion in its all-important holiday sales quarter. Earnings jumped 16% to $2.18 per share.
Sales of iPhones were also stronger than expected despite multiple warnings from analysts about potential weakness.
“Today Apple is reporting revenue growth for the December quarter fueled by iPhone sales, and an all-time revenue record in Services,” Apple CEO Tim Cook said in a statement.
Cook also highlighted the upcoming release of Apple’s Vision Pro mixed-reality headset on Friday as a sign the company was “committed as ever to the pursuit of groundbreaking innovation.”
Elsewhere, Amazon shares popped by more than 9% as the ecommerce giant beat Wall Street’s expectations.
The company’s quarterly sales jumped 14% to $170 billion. Amazon’s earnings increased to $10.6 billion or $1 per share, as CEO Andy Jassy’s sweeping cost-cutting measures – including multiple rounds of layoffs – take effect.