📈 Meta's Year of Efficiency

Happy Friday!

The weekend is here. Here are some key data bites you should know: 

• 42 U.S. attorneys general are suing Meta and Instagram for promoting addictive behaviors in youth.

• Jamie Dimon plans to sell 1M shares (~$140M) of JPMorgan stock.

• The U.S. economy grew by 4.9% in Q3, driven by robust consumer spending.

• The UAW reached a tentative agreement with Ford that may see workers receiving over a 30% wage increase.

In today’s newsletter:

• 📲 Meta’s Earnings Visualized

• 💳 Visa’s Earnings Visualized

• 🌯 Chipotle’s Earnings Visualized

Let’s dive right in!

📲 Meta’s Earnings Visualized

On Wednesday evening, Meta Platforms exceeded analysts’ expectations by reporting Q3 earnings per share of $4.39 and revenue of $34.2B, outperforming the anticipated $3.61 and $33.5B respectively. Facebook daily active users came in at 2.09B versus 2.07B expected, and Reality Labs lost $3.74B versus the $3.94B expected. Since 2022, Meta has now lost more than $20B running Reality Labs, $13.7B of which came from last year.

Meta CFO Susan Li indicated that geopolitical events, like the unrest in the Middle East, have caused a “softening” in the ad market. For Q4, Meta now expects between $36.5B - $40B in revenue, versus the $38.8B expected. This caution about weaker advertising demand is likely the main reason shares have been declining.

Lastly, the company also reported a surge in ad impressions and a slower decline in average ad prices, citing some of its success to improved AI-driven ad targeting and further monetization of Reels on Instagram. Mark Zuckerberg emphasized the company's continued focus on efficiency and highlighted the growth of Threads, Meta's competitor to Twitter, which now approaches 100M monthly active users.

💳 Visa’s Earnings Visualized

While most investors were focused on big tech’s earnings, Visa had a great overall quarter. The company reported a 21% adjusted earnings growth to $2.33 per share and 10.6% revenue growth to $8.6B, compared to analysts' predictions of $2.25 per share and $8.56B, respectively. Visa's success was linked to resilient consumer spending, increased payments volume, and a surge in cross-border travel. Additionally, Visa raised its quarterly dividend by nearly 16% and announced a $25B buyback.

The Fed is contemplating adjusting the fees merchants pay banks for debit card swipes. Visa's CFO, Chris Suh, stated the company is closely watching the situation and is keen on adapting to regulatory changes. Visa's management anticipates high single-digit to low double-digit revenue growth and low-teens earnings growth for the next fiscal year, aligning with Wall Street's expectations. CEO Ryan McInerney expressed confidence in navigating through economic uncertainties.

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🌯 Chipotle’s Earnings Visualized

People still can’t get enough of burritos. Chipotle surpassed earnings expectations with the help of increased menu prices. The company reported earnings per share of $11.36 adjusted, compared to the expected $10.55, and a revenue of $2.47B in line with projections. Despite rising beef and queso costs, net sales grew by 11.3%, same-store sales increased by 5%, and Chipotle plans to open between 285 to 315 new restaurants in 2024.

Despite inflation pressures, Chipotle continues to perform well across income levels, especially among lower-income consumers, according to CFO Jack Hartung. With California's minimum wage set to increase to $20, Chipotle anticipates raising prices again, possibly in the mid-to-high single digits percentage-wise.

Other Notable Companies That Reported Earnings

• Amazon ($AMZN) exceeded Q3 earnings predictions with strong revenue growth, improved e-commerce sales, and continued cost-cutting, as CEO Jassy highlighted positive AWS prospects. [CNBC]

  • 🟢 EPS $0.94 Beats $0.58 Estimate

  • 🟢 Sales $143.1B Beats $141.4B Estimate

• Spotify ($SPOT) posted strong Q3 earnings, turning its first profit in a year due to reduced costs and increasing prices. The company has now reached 574M monthly users. [YF]

  • 🟢 EPS €0.33 Beats -€0.20 Estimate

  • 🟢 Sales €3.36B Beats €3.3B Estimate

• Intel’s ($INTC) Q3 results exceeded expectations despite competition and previous challenges, and forecasts an improved Q4 revenue due to PC sales rebound and data center growth. [R]

  • 🟢 EPS $0.41 Beats $0.22 Estimate

  • 🟢 Sales $14.16B Beats $13.53B Estimate

• Chevron's ($CVX) Q3 earnings missed expectations due to refining margins and natural gas sales, but strong revenue partially offset the decline. [B]

  • 🔴 EPS $3.05 Misses $3.70 Estimate

  • 🟢 Sales $51.9B Beats $51.4B Estimate

All of the companies that are reporting earnings next week can be viewed here.

Buys

• Asana ($ASAN)

  • Insider: Dustin Moskovitz (CEO)

    • # of Shares Purchased: 123,547

    • $ Amount: $2,162,072

    • SEC Forms: [1]

• Northern Trust ($NTRS)

  • Insider: Michael O’Grady (CEO)

    • # of Shares Purchased: 20,000

    • $ Amount: $1,302,000

    • SEC Forms: [1]

Sells

• Salesforce ($CRM)

  • Insider: Marc Benioff (CEO)

    • # of Shares Sold: 45,000

    • $ Amount: $9,046,723

    • SEC Forms: [1], [2], [3]

• Intuitive Surgical ($ISRG)

  • Insider: Gary Guthart (CEO)

    • # of Shares Sold: 27,385

    • $ Amount: $7,123,030

    • SEC Forms: [1]