Meta shares soar as company cuts spending, forecasts upbeat first-quarter sales By Reuters

(Reuters) -Meta Platforms Inc on Wednesday forecast stricter control of expenses this year and first-quarter sales that could beat Wall Street estimates, sending shares soaring 19% in after-hours trade.

The world’s biggest social media company cut its cost outlook for 2023 by $5 billion and expanded its share buyback program by $40 billion.

The parent of Instagram and Facebook (NASDAQ:) forecast revenue between $26 billion and $28.5 billion, compared with analysts’ average estimates of $27.14 billion, according to IBES data from Refinitiv.

Shares of peers Alphabet (NASDAQ:) Inc and Snap Inc (NYSE:) also rose.

The digital ad giant faced a brutal 2022 as companies cut back on marketing spending due to economic worries, while rivals like TikTok captured younger users and Apple Inc (NASDAQ:)’s privacy updates continued to challenge the business of placing targeted ads.

Meta’s forecast is an indication that the ad market may be recovering as companies increase their marketing budgets, after a long pause due to macroeconomic uncertainties.

Net income for the fourth quarter ended Dec. 31, however, fell to $4.65 billion, or $1.76 per share, compared with $10.29 billion, or $3.67 per share, a year earlier, largely due to a $4.2 billion charge related to cost-cutting moves such as layoffs.