Proactive Investors - Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB) shares plunged more than 12% after the Facebook (NASDAQ:META), Instagram and WhatsApp owner raised its expenses forecast for the full year to account for its investments in AI and related infrastructure.
The company's second quarter guidance indicated revenue in the range of $36.5 billion to $39 billion compared to the consensus of $38.5 billion.
This, along with the increased expenses forecast, took the shine off Meta’s first quarter earnings, which included impressive profit and revenue growth.
Meta said it expects total 2024 expenses of $96 billion to $99 billion, up from its earlier forecast of $94 billion to $99 billion due to higher infrastructure and legal costs.
It raised its full-year capital expenditures forecast to $35 billion to $40 billion from its prior guidance of $30 billion to $37 billion to support its AI efforts.
“While we are not providing guidance for years beyond 2024, we expect capital expenditures will continue to increase next year as we invest aggressively to support our ambitious AI research and product development efforts,” Meta said in a statement.
For its Metaverse division Reality Labs, into which the company has invested significant resources, it said it continues to expect its operating losses to increase “meaningfully” year-over-year.
Earnings per share increased by 114% from $2.20 to $4.71, compared to the consensus $4.32.
Meta posted a 27% year-over-year jump in revenue to $36.5 billion, ahead of estimates of $36.3 billion.
Shares of Meta traded down 12.3% at about $433 shortly after the release of its earnings report.