Earnings season always gives investors a behind-the-scenes look at companies, making the 2023 Q4 cycle especially critical as a harbinger of what lies ahead in 2024.
When Meta Platforms (META) announced its Q4 results, their shares surged, drawing enthusiastic investor attention. In contrast, Apple (AAPL) faced selling pressure. Let’s delve into the details of these releases.
Meta Platforms Q4 Results
Meta consistently outperformed expectations, with robust earnings results, reflecting a substantial 25% increase in sales to $40.1 billion compared to the previous year. The 25% sales growth was the highest in eight quarters.
In a particularly welcomed development, Q4 costs and expenses decreased by 8% compared to the previous year, and the company repurchased over $6 billion in shares during the period. The positive operational changes resulted in a quarterly EPS of $5.33, well above the year-ago mark and surpassing the $4.83 Zacks Consensus EPS Estimate. Notably, the company’s operating margin increased to 41% from 20% in the previous year.
Furthermore, Meta’s platform expanded, with Facebook daily and monthly active users growing by 6% and 3%, respectively. Their advertising business remained robust, delivering a 21% increase in ad impressions across their family of apps.
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Additionally, Meta unveiled its first-ever dividend, payable on March 26th to stockholders of record as of the close of business on February 22nd. Mark Zuckerberg stated, ‘We had a good quarter as our community and business continue to grow. We’ve made a lot of progress on our vision for advancing AI and the metaverse.’
Apple Q1 Results
Apple’s quarterly revenue of $119.6 billion increased by 2% year-over-year, with an EPS of $2.18, up 16% from the previous year, marking a record. However, post-earnings, Apple shares faced selling pressure despite strong figures. Notably, these results broke a streak of negative year-over-year revenue growth rates over the past four quarters.
Amidst the mixed market reaction, the report contained positive indicators. Apple’s Services revenue reached a record $23.1 billion, showing an 11.3% increase from the same period the previous year. Moreover, iPhone revenues grew by 6% to reach $69.7 billion for the quarter, exceeding consensus expectations by 1.5%.
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Apple continued to demonstrate its ability to generate substantial cash flow, with nearly $40 billion in operating cash flow. Further, the company experienced an expansion in its margins, rising from 42.9% to 45.6%.
However, Apple saw a 13% decline in revenues from China, indicating heightened competition in that market and potentially contributing to the negative market response.
Summing Up
Earnings season is always an exciting time for investors, offering a window into the performance of major market players. Meta Platforms saw its shares soar on news of a dividend and improved profitability, while Apple’s stock faced pressure amid concerns about demand in China.
For a comprehensive overview of the Q4 expectations, explore our weekly Earnings Trends report >>> Q4 Earnings: Tech Flexes Strong Growth
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