Finimize - 💪 Meta's looking ripped

What’s going on here?

Meta has been spending a lot of time on the operating table lately, and better-than-expected results released late on Wednesday show a slight glimmer of hard-earned gains.

What does this mean?

Facebook-parent Meta is trying to become a leaner, meaner, social media machine by not betting the house on the Metaverse and cutting costs instead. And its recent results showed off its new, hot physique: the social media gargantuan brought in 5% more monthly active users last quarter versus the same time last year, and its core advertising business made 4% more – despite the heavy weight of an economic slowdown. That sent overall revenue up by 3%, defying investor expectations for a fourth-consecutive quarterly drop. And Meta’s future regime looks healthy too, with the firm providing a forecast for 2023’s total expenses that was far slimmer than expected. Investors were practically salivating: they sent Meta’s shares up by more than 10% initially.

Why should I care?

Zooming out: Age fatefully.

Meta’s been under the knife, slicing nearly a quarter of its staff in a bid to rejuvenate its sagging form. And sure, some analysts expect the nipped-and-tucked firm to see profit growth again come June, spurred on by those slimming operations and a more energetic advertising market. But there’s only so much pruning and trimming a firm can do, so Meta will need to muster up some long-term revenue growth if it wants to permanently revisit its glory days. Otherwise, surgery will only delay – not erase – the slower growth effects of aging.

Zooming in: Let’s be reel.

TikTok’s been plaguing Meta’s business for a while, pinching advertiser-coveted eyeballs away from Facebook and Instagram. And while Instagram’s Reels – an almost uncanny short video format – has been putting up a good fight, Meta will need to make sure its stalwarts stay popular enough to ward off fresh competition in the future, especially as the firm explores ambitions outside of the socials realm.

What’s going on here?

Planemaker Boeing released a results update on Wednesday – and it sounds a bit like a bounceback.

What does this mean?

Every airline knows that flying planes can be tricky in the post-Covid world, but making the things is no picnic either. 2018 was the last full year Boeing spent in the black, after all – but now the company's quarterly results suggest it might be regaining its cruising altitude. The behemoth’s first-quarter revenue leaped 28% compared to last year, helping to trim losses more than expected. And Boeing’s captain says it’s sticking to that trajectory: the firm’s boosting production of its once-troubled 737 Max planes, and banking on positive cash flow for the whole of 2023. Those are reassuring words in turbulent times – so it’s no surprise that the stock initially popped when the news broke.

Why should I care?

Zooming in: Dividends waiting in the wings.

Investing in new planes saw Boeing burn through cash like jet fuel for many years. And just when those moves were starting to pay off, along came Covid – bringing the firm back down to Earth and forcing it to take on $40 billion in debt. So, sure, Boeing’s optimistic about its future cash flow, but debt repayment has priority boarding – and that means investors could be waiting quite a while before any dividends come their way.

For markets: UPS said “oops”.

Parcel deliverer UPS – which boasts around 200 Boeing jets in its fleet – shares more than just a love of aircraft with the planemaker: both companies also serve as early warning systems for economic turbulence. So while Boeing’s results might come as a relief, it’s worth keeping an eye on UPS too: last quarter the firm saw a steeper-than-anticipated 5.4% yearly drop in US parcels, prompting investors to send the stock down 10%. Let’s just hope that’s nothing more than an air pocket.