Meta stock surges 14%. Investors are loving its first-ever dividend

New York (CNN) — Meta’s “year of efficiency” paid off in a big way. And it offered a sweetener for investors, sending its stock surging.

Posted 9:26 p.m. Feb 1 — Updated 9:50 p.m. Feb 1

Clare Duffy

, CNN

CNN — New York (CNN) — Meta’s “year of efficiency” paid off in a big way. And it offered a sweetener for investors, sending its stock surging.

The tech giant on Thursday reported that profit from the three months ended in December grew more than 200% year-over-year to $14 billion, exceeding Wall Street analysts’ expectations. Sales from the quarter grew 25% from the year-ago period to more than $40 billion.

The company also announced its first-ever cash dividend of $0.50 per share to be paid out on March 26 to shareholders of record as of February 22, as well as a $50 billion share buyback. Buybacks and dividends help to boost stock prices by rewarding investors with cash just for holding the stock — but they’re widely criticized for artificially inflating the stock price without spending on employees or improvements to the underlying business.

“We intend to pay a cash dividend on a quarterly basis going forward,” the company said in a release.

The news sent Meta (META) shares popping more than 14% in after-hours trading Thursday.

Thursday’s report marked the fourth quarter of Meta’s self-described “year of efficiency,” which Zuckerberg announced in February of last year. The turnaround strategy involved layoffs and other cuts to spending in what ended up being a stunningly successful effort to reverse the prior year’s revenue declines and share price weakness.

For the full year in 2023, Meta’s profits grew 69% year-over-year to $39 billion, the company reported Thursday. As of Thursday’s closing bell, Meta’s stock had gained 109% since this time last year.

Meta said Thursday that as of the end of 2023, it had “completed the data center initiatives and the employee layoffs, and substantially completed the facilities consolidation initiatives.”

Thursday’s report also comes one day after Meta CEO Mark Zuckerberg appeared on Capitol Hill alongside industry peers to testify about the impact of the company’s platforms on young users. During the hearing, Zuckerberg issued a rare apology to parents of children who had been harmed by Facebook and Instagram who were in the room.

“No one should go through the things that your families have suffered, and this is why we invest so much and are going to continue doing industry-leading efforts,” Zuckerberg told parents.

–This is a developing story and will be updated.

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