Apple and Amazon beat revenue expectations despite downturn

29 Jul 2022

Image: © 9parusnikov/

The two tech giants are proving resilient to economic headwinds and performing strongly in key areas of business.

Apple has had a record quarter for revenue and beat Wall Street expectations despite ongoing supply chain and production issues.

The tech giant reported that revenue was 2pc higher last quarter compared to the same period last year. Reaching $83bn, this was the highest ever for a June quarter and narrowly beat analyst expectations of $82.8bn.

Sales of the iPhone and services, which were both up on last year, drove the revenue performance.

However, there were slowdowns in the quarter. Net income fell 11pc to $19.4bn while Mac revenue was down 10pc to $7.4bn – the first drop in more than two years. Sales of the iPad and wearables and accessories also dipped slightly.

“Mac and iPad were so gated by supply that we didn’t have enough product to test the demand,” CEO Tim Cook said on the company’s earnings call.

“And wearables, Home and accessories … we did see some impact there that we would attribute to a macroeconomic environment.”

The macroeconomic environment was something cited as an issue for many tech giants last quarter, including Microsoft and Google.

But Apple is showing resilience despite the economic downturn. Even as services revenue grew to 12pc to $19.6bn – its slowest growth since 2015 – Apple services reached 860m paid subscribers. This is up from 825m in the last quarter.

Net sales in Japan and China were down from a year earlier, but increased in the Americas, Europe and the rest of Asia Pacific. Cook said on the earnings call that sales were particularly strong in developing markets such as Indonesia, India, Brazil and Vietnam.

“Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment,” Apple CFO Luca Maestri said in a statement.

Apple expects faster sales growth in the last quarter of the year, citing easing parts shortages and strong iPhone demand with the iPhone 14 on the way. Cook said the company will continue to invest through the downturn but be “deliberate” in spending decisions.

There has been a significant improvement of supply and demand in China, despite shutdowns during the quarter. Revenue is also expected to pick up pace in September, despite “some softness in some areas”, Cook told Emily Chang of Bloomberg.


E-commerce giant Amazon also had a better-than-expected quarter despite taking hits from inflation and a $2bn net loss, driven by its investment in EV start-up Rivian.

The net loss contrasts with a $7.8bn in net income in the same period last year. This is the second consecutive quarterly loss reported by Amazon, after it suffered its first quarterly loss since 2015 earlier this year.

Revenue was up 7pc to $121.2bn, exceeding analyst expectations but marking the slowest quarterly growth in more than two decades. Growth was spearheaded by the Amazon Web Services (AWS) cloud business, which saw revenue rise by 33pc.

“As organisations face uncertainty in this fragile economy, IT leaders are turning to the cloud to manage costs and today’s announcement verifies just that,” Will Milewski, senior VP of cloud platform engineering at Hyland, said of the strong AWS performance.

“In the months to come, we can anticipate continued growth due to its recent unveiling of products across several services and global expansion plans.”

Ad services revenue also beat expectations and brought in $8.76bn, representing year-on-year growth of 18pc. This ad business performance stands out in an otherwise bleak quarter for online advertising for companies such as Meta, Snap and Twitter.

Subscription services revenue grew by 10pc compared to last year to $8.72bn. This includes services such as Amazon Prime, which was recently the subject of a major price hike across Europe.

The e-commerce giant’s direct workforce declined by nearly 100,000 to 1.52m – a record quarterly drop. This is primarily due to attrition in Amazon warehouses after a slump in online shopping following the pandemic boom.

“Despite continued inflationary pressures in fuel, energy and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfilment network,” CEO Andy Jassy said.

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Vish Gain is a journalist with Silicon Republic