SAN FRANCISCO, (UrduPoint/Pakistan Point News – July 29, 2022) :Amazon and Apple were a relatively bright spot in a week that resulted in a loss in earnings for an industry with the end of otherwise major pandemic-era growth.
A crowded period of quarterly financial releases from the world’s biggest tech firms has been marred by lapses and uncertainty – making it clear that the boom triggered by Covid-19 restrictions has turned into a recession.
As people break free from the pandemic lifestyle that has forced them to rely on the Internet to shop, play, work and learn, inflation is driving up prices and COVID-19 is causing temporary closures of factories in China. are being built, which are dependent on technology firms.
Fears of a recession, a stronger dollar, shrinking advertising budgets and inflation – headwinds are coming from all directions at the moment.
“When you think about the number of challenges in the quarter, we feel very good about the growth that we’ve put in place,” Apple Chief Executive Tim Cook said on the earnings call.
For Apple, product sales reached $63.4 billion compared to the same period a year ago, but declined against services revenue to reach $19.6 billion, earnings figures showed.
Cook said demand for iPads and Mac computers exceeded supply in the recently ended quarter, largely due to pandemic restrictions, which led to “plant closures and plants running at less than full use”.
Cook said Apple was also troubled by the ongoing shortage of computer chips.
Meanwhile, US chip giant Intel reported disappointing earnings due to economic conditions along with its own missteps – a post-Covid drop in demand and “supply dislocation in China and other parts of the supply chain”, officials said. Said on an earnings call.
Amazon beat sales estimates in the quarter to reach $121 billion, and revenue climbed on Amazon Web Services, its cloud-computing platform.
Officials said the retailer had made progress in reducing the ranks of employees who were prepared to handle online shopping during the pandemic.
“Amazon managed the second quarter extremely well despite tough macro conditions and weighed additional costs on its bottom line,” analyst Andrew Lipsman said.
Apple, Microsoft and Facebook-owner Meta have talked about eating up a stronger dollar in earnings, because when the US currency gains too much value, it can make products more expensive overseas or eat away at a remunerative exchange rate. .
Meta pointed to the greenback’s role in the firm’s first year-over-year revenue decline since going public in 2012.
In addition to generally rough economic times, companies like Netflix and Meta are fighting fierce competition from rivals — and both reported losing some ground.
Meta lost nearly two million monthly users between quarters, and Netflix shed nearly a million paying subscribers.
Yet Netflix stock is up nearly a percent over the past five days, with investors potentially hoping the firm anticipates an imminent rebound in subscribers.
The market seemed similarly calm, despite the disappearance of Google parent Alphabet on revenue and profit.
The bad news from the Silicon Valley giant wasn’t unexpected, as the influx of online advertising dollars, which fueled the company’s fortunes, plagued the overall economy due to inflation, war, and other troubles.
Still, with its tremendous market share in search advertising, Google is relatively well positioned to face the rough waters ahead, said analyst Evelyn Mitchell.
As advertisers tighten up their gears, and Apple’s privacy changes cut sales of the firms’ expensive but highly targeted ads, the damage was uneven.
Meta’s earnings have plummeted, and with the share price dropping by nearly half since February, it’s clear that investors are still wary about the company’s future.
“The good news, if we can call it that, is that even its rivals in digital advertising are facing a slowdown,” said analyst Debra Aho Williamson.
For example, Snapchat’s parent firm reported that its losses nearly tripled to $422 million in the recently ended quarter, despite a 13 percent increase in revenue under “challenging” circumstances.
“We are not satisfied with the results we are delivering, whatever the current adverse conditions,” California-based Snap said in a letter to investors last week.