Meta reports stronger than expected earnings amid macroeconomic challenges

In the United States, Meta Platforms Inc. reported its financial results for the first quarter of 2025 in a critical economic climate. The company experienced better-than-expected earnings, earning $16.64 billion or $6.43 per share, significantly higher than analysts' average expectations of $5.23 per share. Revenue also surpassed forecasts, increasing 16% to $42.31 billion compared to $36.46 billion in the same period last year. Despite concerns over President Trump's tariffs affecting its advertising business linked to China, Meta's strong advertising revenue was a key factor in its performance during this quarter. The economic backdrop included challenges due to weaker-than-expected GDP growth, which contracted by 0.3% instead of the forecasted growth of 0.1%. Although the stock markets showed modest gains during this period, they remained cautious as key companies navigated tariff uncertainties which could impact their revenue from online advertising. Meta’s performance stood out, as many companies refrained from making forecasts amid these turbulent economic conditions. During this quarter, analysts indicated that Meta’s advertising revenue could still face pressure due to reduced spending from Chinese online retailers like Temu and Shein, which typically represent a portion of its revenue. Chinese businesses accounted for roughly 11% of Meta's sales in 2024, and any continued reduction in their advertising spending going forward could result in a projected $7 billion hit to Meta's revenue in 2025, according to analysts. CEO Mark Zuckerberg stated that the company has had a robust start to the year, highlighting Meta's commitment to investments in artificial intelligence and infrastructure. Meta raised its capital expenditure estimate to $64-$72 billion, which reflects increased investments necessary to sustain and expand its technologies. In light of all these developments, the announcement has reinstated investor confidence in Meta’s potential for growth even as various macroeconomic hurdles remain.