Meta set to report first-quarter earnings after the bell

Facebook parent Meta is scheduled to report first-quarter earnings after the close of regular trading Wednesday.

Here’s what analysts are expecting:

• Earnings: $2.03 per share, according to Refinitiv.
• Revenue:  $27.65 billion, according to Refinitiv.
• Daily active users (DAUs): 2.01 billion, according to StreetAccount.
• Monthly active users (MAUs):  2.99 billion, according to StreetAccount.
• Average revenue per user (ARPU): $9.30 expected, according to StreetAccount.

Since Meta CEO Mark Zuckerberg announced in February that 2023 would be the company’s “year of efficiency,” the stock has been on the rise, cutting into its historic losses last year.

Investors have rallied around Zuckerberg’s plans to slim down his company through a series of layoffs, resulting in some 21,000 expected job cuts. The company most recently said goodbye to some technical workers last week, and is planning another round of cuts in May that will target employees in business groups.

Meta’s downsizing efforts come as the company’s revenue base is shrinking from a battered online advertising market and the lingering effects of Apple’s 2021 iOS privacy update that dramatically limited ad targeting capabilities. The company is also facing increased competition from rival TikTok.

The Facebook parent could record its fourth consecutive quarterly sales drop if it posts first-quarter results that come in at the low end of its previous guidance, which called for revenue of between $26 billion and $28.5 billion.

Google parent Alphabet, which dominates the online ad market along with Meta, reported first-quarter results on Tuesday that beat analysts’ expectations, though ad revenue fell from the prior year.

Outside of its core business, Wall Street will also want to hear Meta’s latest plans for investing in the metaverse, a futuristic world of virtual and augmented reality. Since changing its name from Facebook to Meta in late 2021, the company has been spending billions of dollars a quarter on technologies for the metaverse, even as revenue isn’t expected to be significant anytime soon.

Analysts expect Reality Labs, the metaverse division, to record an operating loss for the first quarter of $3.95 billion, according to StreetAccount.

Meta shares have jumped 72% so far this year after losing almost two-thirds of their value in 2023. The stock closed on Tuesday at $207.55.

Watch: Meta’s new focus on cost-cutting is impressive