Status: 03.02.2023 8:30 a.m
After the Corona boom comes the doldrums: Apple, Amazon and Alphabet have presented their figures for the past quarter – and disappointed investors. They are suffering from the aftermath of lockdowns, austerity measures and a declining advertising business.
Apple, Amazon and Google’s parent company Alphabet have all released results for the last quarter of 2022 that have left investors bitter. The reports again raised questions about global economic demand, the impact of higher interest rates and whether January’s market rally went too far. The US tech giants have faced headwinds for their business this past quarter. The stock exchange was quite disappointed with its numbers after the soaring in the corona pandemic.
Apple’s iPhone earnings are falling
The iPhone company is usually a money-making machine in the Christmas quarter – but this time there was a problem with its most important product. Corona lockdowns in Chinese factories caused bottlenecks for the lucrative iPhone 14 Pro in November and December. iPhone revenues fell by a good eight percent and dragged down Apple’s consolidated sales. CEO Tim Cook was convinced that without the shortage, the iPhone business would have grown even in an overall weak smartphone market.
According to calculations by the analysis company Canalys, global smartphone sales fell by 18 percent in the past quarter. Apple then climbed – as always at Christmas – despite the bottlenecks, to the top spot with a market share of 25 percent and a good 73 million devices sold. Across all product categories, Apple customers now have two billion devices in use. This is also the basis for a growing services business with subscription revenues and app fees, which brought in almost 20.8 billion dollars last year.
Instead of the usual record figures, there was now a drop in sales of a good five percent to 117.2 billion dollars. The bottom line was a quarterly profit of just under $30 billion – $4.6 billion less than a year earlier. The stock fell more than 3 percent in after-hours trading on Thursday. In the current quarter, Apple sees sales under pressure from the weak economy and unfavorable exchange rates.
$640 million in Amazon severance pay
The world’s largest online retailer made more sales than expected in the Christmas quarter, despite fears of inflation and recession. Amazon’s revenue increased 9 percent to $149.2 billion. However, higher spending pushed operating profit down from $3.5 billion to $2.7 billion.
The retail giant had to spend a lot of money on austerity measures such as the closure of unprofitable shops and a large wave of layoffs. What is intended to reduce costs in the long term initially caused some. According to Chief Financial Officer Brian Olsavsky, severance payments had a negative impact of $640 million. After a hiring offensive due to the order boom at the beginning of the pandemic, Amazon again sharply reduced its number of employees in view of the difficult economic situation. At the beginning of January, CEO Andy Jassy announced that more than 18,000 jobs would be cut.
Net income was just $278 million in the fourth quarter. This was mainly due to a value correction of the stake in the weakening electric car manufacturer Rivian. The figures were not well received by investors: the share initially fell by five percent after the trading session. Amazon’s outlook for the current quarter disappointed with a sales forecast of $121 billion to $126 billion and an expected operating profit of between zero and four billion. In addition, the important cloud business has not recently grown as strongly as hoped. The cloud platform AWS, which offers many other companies storage space and applications on the Internet, only managed to grow sales by 20 percent to $ 21.3 billion in the fourth quarter – less than assumed on Wall Street.
Advertising business ruined Google’s business
Google, as the core of the Alphabet Group, felt the lull in the online advertising market in the past quarter. The advertising business for the search engine and video platform YouTube fell by around 3.6 percent to $59 billion, falling short of Wall Street’s expectations. However, gains in cloud services and good currency deals helped close the gap. The parent Alphabet was able to show a one percent increase in sales to a good 76 billion dollars. Analysts had expected more. The stock lost nearly 5 percent in after-hours trading. Bottom line, profits fell by a good third to $13.6 billion.
“For a company of Google’s size and influence, the results are disappointing. That means the advertising industry won’t recover in a quarter,” said Evelyn Mitchell, an analyst at Insider Intelligence.
In the midst of the hype about the text machine ChatGPT, Google is preparing its competitor’s software for public use after a long hesitation. Google users should be able to interact “very soon” with such language systems, among other things as a supplement to web searches, said CEO Sundar Pichai. Google has had its voice software used internally by employees for the past few years, but shied away from a broad market launch due to the risk of misuse.