Text size A Meta employee demonstrates the Meta Quest Pro VR Headset in Las Vegas in January. Robyn Beck/AFP/Getty Images Meta Platforms shares spiked in late trading Wednesday after the company disclosed fourth quarter financial results and announced a new round of cuts to its 2023 spending plan. In another shareholder friendly move, the Facebook parent is taking a more aggressive approach to buying back stock. The company said it bought back $6.91 billion of stock in the latest quarter, bringing the full year total to $27.93 billion. The company said its board approved a new $40 billion buyback authorization, in addition to $10.87 billion remaining on its previous repurchase program. Shares were up 18% in late trading. The sharp rally on the fourth-quarter report stands in stark contrast to the 25% drop triggered by third quarter results. That drop was triggered by Wall Street concerns that Meta (ticker: META) was spending too aggressively. Two weeks later, Meta announced 11,000 job cuts and other spending reductions – and now Meta is making deeper cuts, and investors are celebrating the company’s new focus on costs. “Our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization,” Meta CEO Mark Zuckerberg said in a statement. Meta reduced its forecast for full-year total expenses to between $85 billion and $95 billion, from a previous forecast of $94 billion to $100 billion. The company now sees capital expenditures for the year in the range of $30 billion to 33 billion, down from a prior estimate of $34 billion to 37 billion. For the fourth quarter, Meta posted revenue of $32.2 billion, down 4% from a year ago, but towards the higher end of its guidance range from $30 billion to $32.5 billion, and above the Wall Street consensus view at $31.6 billion. The company earned $1.76 a share in the quarter, below consensus at $2.27. Meta said it took restructuring charges in the fourth quarter of $3.76 billion in the Family of Apps segment, and $440 million in the Reality Labs segment. Without those charges, the company said, earnings in the quarter would be $1.24 a share higher. But Meta also said that “the impact of the severance and other personnel costs recorded in the fourth quarter of 2022 was not material after offsetting with the savings from the decreases in payroll, bonuses and other benefits expenses.” The company is projecting first-quarter revenue of between $26 billion and $28.5 billion, about in line with the Wall Street consensus of $27.1 billion, and down about 2.4% from a year at the mid-point of the range. Revenue from the company’s “family of apps” segment was $31.3 billion, slightly above the Wall Street consensus of $31 billion, while Reality Labs, which includes VR headsets and the nascent metaverse business, had revenue of $727 million, also slightly above the consensus of $713 million. The company had operating income from apps of $10.68 million, below the Wall Street forecast of $12.35 billion, while Reality Labs had a loss of $4.28 billion, slightly narrower than the $4.39 billion projected by analysts. Meta posted strong growth in user metrics. Daily active people, a measure of users across the company’s social networks, which include Facebook, Instagram, and WhatsApp, were 2.96 billion in December, up 5% from a year ago. Monthly actives were 3.74 billion, up 4%. The company also said Facebook daily active users hit 2 billion for the first time, up 4% from a year ago. The company said ad impressions delivered across the apps were up 23% year over year in the fourth quarter, while the price per ad was down 22%. On a call with investors, Zuckerberg said that conversion rates in the fourth quarter were up more than 20% from a year ago, meaning Facebook users were taking more action after viewing ads. He also said that the company is making considerable progress on the adoption of Reels, the company’s short-form video service that competes with TikTok, with plays in the fourth quarter more than doubling from a year ago. Zuckerberg also commented on the company’s plans to participate in the market for generative AI tools, like the popular ChatGPT chatbot from OpenAI. “This is a really exciting area,” Zuckerberg said. “We have a bunch of different work streams to use large language models,” for both text and visual content generation. He said the company will “launch a number of different things” in the generative AI area this year. Meta said revenue in the quarter was reduced by about $2 billion by foreign exchange headwinds. The company said headcount at year end was 86,482, up 20% year-over-year – but added that the total still includes most of the 11,000 people affected by the playoffs. For all of 2022, the company had revenue of $116.6 billion, down 1% from a year ago. The company earned $8.59 a share for the year, down 38% from $13.77 a year ago. Write to Eric J. Savitz at eric.savitz@barrons.com