Amazon suffered its first unprofitable year since 2014, Apple profits missed expectations and Alphabet’s revenue growth reached a crawling pace of 1pc.
Amazon, Apple and Alphabet have all posted disappointing results in their latest earnings reports, as the global economy continues to squeeze the tech sector.
Among these tech giants, Amazon managed to exceed its own quarterly expectations, though its overall results for 2022 were still disappointing.
The company’s net sales total for the fourth quarter of 2022 was $149.2bn, an increase of 9pc compared to the same period in 2021.
However, Amazon suffered a net loss of $2.7bn in its full year results for 2022, a stark difference to its net income of $33.4bn in 2021. This is also reportedly the company’s first unprofitable year since 2014.
Amazon said one of the biggest contributing factors to the loss came from its common stock investment in EV start-up Rivian Automotive, which had a pre-tax valuation loss of $12.7bn.
Last April, the tech giant had also primarily attributed its 2022 first quarter loss to this common stock investment.
“In the short term, we face an uncertain economy, but we remain quite optimistic about the long-term opportunities for Amazon,” said company CEO Andy Jassy. “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.”
Last November, Amazon announced plans to cut jobs in several divisions to reduce its costs, in response to global economic issues. This is a move that has been taken by many tech companies worldwide in recent months.
The initial amount was reported to be 10,000, but Jassy confirmed last month that Amazon plans to cut more than 18,000 of its total workforce.
Apple’s first quarter results of 2023 (ended 31 December 2022) included total net sales of $117.15bn, which is lower than the same period the previous year.
The company’s services division did better than expected however, with $20.76bn in sales for the quarter. Apple CFO Luca Maestri this was an all-time revenue record for the division.
Last October, Apple raised the prices of its Music and TV+ subscriptions, along with the Apple One bundle service.
However, the company’s earnings-per-share was $1.88 and marks the first time company profits missed Wall Street expectations since 2016, Reuters reports.
Apple CEO Tim Cook said the company remains focused on the long term “as we all continue to navigate a challenging environment”. He also said Apple hit a “major milestone” with more than 2bn active devices.
Cook also told Reuters in an interview that the company’s production disruptions were over and “back where we want it to be”.
Aside from the services division, every other section of Apple’s income saw a drop compared to the first quarter of 2022. The iPhone continues to be the company’s flagship product, reaching $65.77bn and accounting for more than half of the quarter’s total revenue.
Google’s parent company Alphabet missed expectations in both revenue and profits for its fourth quarter results, while its revenue growth crawled to 1pc.
The company’s revenue for the quarter was $76.05bn, a small increase from the same period in 2021 but short of analyst expectations, CNBC reports.
Continuing the downward trend of previous quarters, YouTube advertising revenue also failed to meet analyst estimates, coming in at $7.96bn. Earnings-per-share for the quarter was $1.05 compared to expectations of $1.18.
Despite the disappointing results, Alphabet and Google CEO Sundar Pichai said the company is well positioned to benefit as “AI reaches an inflection point”, thanks to its long-term investments in “deep computer science”.
Pichai said there is also growing momentum in its cloud services, YouTube subscriptions, and 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,” Pichai said.
Last month, Alphabet joined many other tech companies with an announcement of job cuts. The tech giant plans to cut roughly 12,000 of its global staff.
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