Thursday, February 22, 2024

Meta, Amazon smash earnings expectations, as stock markets surge | Economy

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Asian markets rally after US tech giants post stronger-than-expected financial results.

Asian markets have rallied after the release of stronger-than-expected earnings results by Meta and Amazon sent the tech giants’ share prices surging in after-hours trading.

In Hong Kong, where stocks have slumped on weak economic indicators in mainland China, the Hang Seng Index on Friday rose around 2 percent in morning trading before paring their gains, while Japan’s benchmark Nikkei Index climbed 1 percent.

India’s NSE NIFTY 50 Index rose more than 1.5 percent.

Meta, the parent company of Facebook, on Thursday reported revenue of $40.1bn and a profit of $14bn for the fourth quarter of last year – far surpassing analysts’ forecasts.

Meta’s stock price surged more than 14 percent to surpass $445 in after-hours trading.

Meta reached a major milestone on Thursday as it became the first in its generation of tech unicorns – a company whose valuation reaches $1bn prior to listing on the stock market – to announce it would pay shareholders a dividend, set at 50 cents per share.

“We had a good quarter as our community and business continue to grow,” Meta CEO Mark Zuckerberg said in a statement.

Amazon’s fourth-quarter results also came in ahead of expectations with sales of $170bn, sending shares up as much as 9 percent.

Amazon’s AWS cloud business also posted strong results for the last quarter, with revenue reaching $24.2bn.

“This Q4 was a record-breaking holiday shopping season and closed out a robust 2023 for Amazon,” Amazon CEO Andy Jassy said in a statement.

Meta and Amazon have both been engaged in aggressive cost-cutting, with the tech giants laying off about 48,000 employees between them since 2022.

The tech titans’ strong performance added $280bn to US markets on Thursday, with the S&P500, NASDAQ Composite Index, and Dow Jones Industrial Average all closing on a high note.

Meta and Amazon’s better-than-expected fourth-quarter showing is a bright spot in a bumpy start to 2024 amid growing scrutiny from US regulators over online safety concerns and alleged antitrust breaches.

Fellow tech giant Apple also beat expectations with its fourth-quarter results on Thursday, but its stock dipped 3.3 percent on the back of a 13 percent decline in iPhone sales in China, where local brands have toppled its once dominant market position.

Google’s parent company Alphabet on Tuesday announced fourth-quarter financial results that missed analysts’ forecasts, sending shares more than 6 percent lower.

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