Tech giants Apple, Google and Amazon have posted disappointing financial results, missing analysts’ expectations.
This, after many tech firms recently announced large-scale job layoffs, citing an uncertain economic outlook.
The companies have also lamented that the digital spend boom that was witnessed at the height of the pandemic is now waning.
Apple yesterday announced financial results for its fiscal 2023 first quarter ended 31 December 2022.
The company posted quarterly revenue of $117.2 billion, down 5% year-over-year, and quarterly earnings per diluted share of $1.88.
Its revenue falls well off analyst estimates of $121.4 billion in sales and $1.94 earnings per share, according to FactSet.
“As we all continue to navigate a challenging environment, we are proud to have our best line-up of products and services ever, and as always, we remain focused on the long-term and are leading with our values in everything we do,” says Tim Cook, Apple CEO.
“During the December quarter, we achieved a major milestone and are excited to report that we now have more than two billion active devices as part of our growing installed base.”
“We set an all-time revenue record of $20.8 billion in our services business, and in spite of a difficult macro-economic environment and significant supply constraints, we grew total company revenue on a constant currency basis,” says Luca Maestri, Apple CFO.
“We generated $34 billion in operating cash flow and returned over $25 billion to shareholders during the quarter, while continuing to invest in our long-term growth plans.”
Alphabet, Google’s parent company, yesterday also announced financial results for the quarter and fiscal year ended 31 December 2022.
The internet search behemoth posted its fourth consecutive decline in profit, as it grapples with a slowdown in digital advertising.
Net income dropped 34% to $13.6 billion, falling short of Wall Street expectations of $15.3 billion, according to data compiled by FactSet.
Total advertising revenue across Google products dropped to $59 billion – down by 4% from the previous year.
“Our long-term investments in deep computer science make us extremely well-positioned as AI [artificial intelligence] reaches an inflection point, and I’m excited by the AI-driven leaps we’re about to unveil in Search and beyond,” says Sundar Pichai, CEO of Alphabet and Google, in a statement.
“There’s also great momentum in cloud, YouTube subscriptions and our Pixel devices. We’re on an important journey to re-engineer our cost structure in a durable way and to build financially sustainable, vibrant, growing businesses across Alphabet.”
Says Ruth Porat, CFO of Alphabet and Google: “We have significant work under way to improve all aspects of our cost structure, in support of our investments in our highest growth priorities to deliver long-term, profitable growth.”
Last month, Google announced a reduction of its workforce by approximately 12 000 roles.
“We expect to incur employee severance and related charges of $1.9 billion to $2.3 billion, the majority of which will be recognised in the first quarter of 2023,” says the firm.
“In addition, we are taking actions to optimise our global office space. As a result, we expect to incur exit costs relating to office space reductions of approximately $0.5 billion in the first quarter of 2023. We may incur additional charges in the future as we further evaluate our real estate needs.”
Dreary online sales
Meanwhile, e-commerce giant Amazon posted a positive quarter for the period, but its online sales took a knock.
Amazon, which also wielded the axe on its employees, says net sales increased 9% to $149.2 billion in the fourth quarter, compared with $137.4 billion in fourth quarter 2021.
Excluding the $5 billion unfavourable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 12% compared with fourth quarter 2021, it says.
Net income decreased to $0.3 billion in the fourth quarter, or $0.03 per diluted share, compared with $14.3 billion, or $1.39 per diluted share, in fourth quarter 2021.
Online sales, however, were down 2.3% from last year to $64.53 billion.
“Our relentless focus on providing the broadest selection, exceptional value and fast delivery drove customer demand in our stores business during the fourth quarter that exceeded our expectations – and we’re appreciative of all our customers who turned to Amazon this past holiday season,” says Andy Jassy, Amazon CEO.
“We’re also encouraged by the continued progress we’re making in reducing our cost to serve in the operations part of our stores business. In the short-term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon.”
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