Google, Apple Disappoint as Tech Income Hits, Amazon Beats Hopes

San Francisco:

Google and Apple on Thursday reported poor results for the final quarter of 2022 as Amazon beat expectations but warned that the coming months will be uncertain in a difficult time for Big Tech.

The tech titans posted earnings as shares in Meta skyrocketed a day after better-than-expected results and indicated spending and job cuts.

The results follow a round of unprecedented layoffs in a generally unapproachable tech sector amid pessimism about the economic outlook.

The sour mood followed a prolonged surge during the peak COVID-19 period when consumers went online for work, shopping and entertainment.

Wedbush analyst Dan Ives tweeted, “Big tech calls from Apple, Amazon and Alphabet paint a very different picture of the demand environment than was expected.” Investors believe that the shares are on a downward path.

The analyst said that while the earnings report suggests there is “caution in the air,” there are signs that companies are headed for a soft landing.

Google parent Alphabet’s fourth-quarter revenue of $76 billion and profit of $13.6 billion were down from the same period a year earlier, with share prices plunging more than 3 percent in after-market trading.

Google saw its significant ad sales decline, which was slightly better than analysts’ estimates, according to data compiled by FactSet.

“It is clear that after the significant uptick in digital spending during the pandemic, the macro economic environment has become more challenging,” Google CEO Sundar Pichai said in an earnings call.

Mr Pichai last month announced plans to lay off 12,000 employees in a bid to stem more hiring from the pandemic and focus on new areas, particularly artificial intelligence.

Google was taken by surprise by the sudden rise of user-friendly AI like ChatGPT, which is seen as a potential rival to Google’s popular search engine.

Apple is the only US tech giant that hasn’t announced major layoffs in recent weeks.

The world’s biggest company by market value reported a decline in quarterly revenue and profit for the last three months last year, hit by declining sales of its flagship iPhone.

Apple sales were hit by reduced production in factories due to China’s zero-covid policy, which was recently lifted.

Apple CEO Tim Cook said on the earnings call that “COVID-19 related challenges” “significantly” reduced the supply of Apple’s iPhone 14 Pro and iPhone 14 Pro Max.

Apple’s revenue was $117.1 billion, down 5.4 percent from the same quarter a year earlier than analysts had forecast.

“The world is facing unprecedented circumstances, from inflation to war in Eastern Europe to the lasting effects of the pandemic, and we know Apple is not immune,” Cook said.

Amazon, meanwhile, reported an inflation-fueled increase in sales, while the company announced plans to correct mass layoffs during the pandemic, at a time when business grew.

“During periods of economic uncertainty, consumers are very careful about how they allocate their resources and where they choose to spend their money,” Brian Olsavsky, Amazon’s chief financial officer, said on the earnings call.

“We saw they spend less on discretionary categories and shifted to lower-priced items in value brands in categories like electronics.”

Last month, the company said it would let go of more than 18,000 workers after the workforce swelled to more than 800,000 during the peak years of the pandemic.

Amazon’s sales figures for the quarter were $149.2 billion, better than initial forecasts from analysts polled by FactSet, but it suffered a sharp decline in profit, which fell to near zero.

“In the short term, we face an uncertain economy, but we are quite optimistic about the long-term opportunities for Amazon,” said CEO Andy Jassy.

The big tech earnings drop comes a day after Meta reported a one percent decline in quarterly sales that beat expectations, and announced that the number of daily users on Facebook reached two billion for the first time.

Shares in Meta ended the formal trading day up 23 percent.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)