Meta declares first dividend, shares surge

Shares surged more than 14%, pushing the company's stock market valuation up by more than $140 billion and extending a long recovery that saw Meta touched record highs in recent weeks for the first time in more than two years.

Meta Platforms issued its first dividend days ahead of flagship social network Facebook's 20th anniversary, while reporting revenue and profit that beat expectations on strong ad sales during the holiday shopping period.

Shares surged more than 14% after the bell, pushing the company's stock market valuation up by more than $140 billion and extending a long recovery that saw Meta touch record highs in recent weeks for the first time in more than two years.

Meta said its dividend would be 50 cents per share. It also said it had authorized an additional $50 billion in share repurchases.

The social media giant is the first of its generation of internet juggernauts to issue a dividend, a landmark for a tech sector that has been dominated by the same handful of firms for well over a decade.

It has grown into the world's biggest social media company, connecting more than 3 billion people and revolutionizing how they discover trends, communicate with their neighbours and engage with politics.

Shares of Meta have steadily been rebounding this past year from a meltdown in 2022 that wiped out more than three-quarters of their one-time value, buoyed by investor excitement about AI.

Its recovery has also been aided by a rebound in user growth and digital ad sales, as well as an austerity drive that saw it shed over 21,000 employees since late 2022.

Revenue for the fourth quarter increased 25% to $40.1 billion, above the $39.2 billion analysts were expecting, as per LSEG data.

Net income increased more than 200% to $14 billion, or $5.33 per share, beating expectations of $4.97 per share, as per LSEG data.

This was one of the most impressive quarters – intrinsically and vs. expectations, according to Evercore ISI analyst Mark Mahaney.

Meta forecast Q1 revenue of $34.5 billion to $37 billion, above Wall Street expectations of $33.8 billion. The company said it expects full-year 2024 total expenses to be unchanged at $94 billion to $99 billion.

Those results came after fellow digital ads heavyweight Alphabet posted holiday season advertising sales that came in below expectations.