TIMES.KY

Cayman Islands, Caribbeanand International News
Monday, Mar 04, 2024

Global economy tests Big Tech as Apple, Amazon, Meta release earnings

Global economy tests Big Tech as Apple, Amazon, Meta release earnings

Big Tech is in the spotlight this week as the most valuable companies in the United States report how they have fared this quarter amid the global economic turmoil and as the pandemic-era tech booms appear to have slowed.

Results were mixed with Apple faring better than expected while Facebook owner Meta and Google's Alphabet reported falling ad sales amid an economic downturn.

Tech giant Apple on Thursday revealed its third quarter results, which narrowly beat market expectations for sales and profit. Apple's revenue rose by 2 per cent during the quarter, which is sluggish compared to last year's 36 per cent growth during the same period last year.

However, the results also showed slowing growth for the iPhone maker with investors concerned about a smartphone slowdown as other companies have signalled a waning demand for smartphones and PC as consumers face recession and high inflation and a strong dollar.

“We do see inflation in our cost structure,” Cook told CNBC in an interview. “We see it in things like logistics and wages and certain silicon components and we’re still hiring, but we’re doing it on a deliberate basis”.

E-commerce giant Amazon also posted rosy results on Thursday. It reported its sales for the last quarter grew more than expected despite the economic turmoil.

Amazon sales reached $121 billion (€118 billion) in the quarter but the company reported a $2 billion (€1.95 billion) loss as it reined in costs,

While the results allowed investors to breathe a sigh of relief that they had not been worse, other tech companies saw bumpier quarters.

On Wednesday, Meta, the owner of Facebook and Instagram reported its first-ever revenue decline and predicted a dip in revenue for the next quarter.

The social media giant, whose social media platforms are dependent on advertising, said its ad sales were hurt as businesses are cautious to spend on advertising due to economic instability since the war in Ukraine. The company also blamed softer e-commerce spending.

“Engagement trends on Facebook have generally been stronger than we anticipated and strong Reels growth is continuing to drive engagement across Facebook and Instagram,” META CEO Mark Zuckerberg said on a conference call with analysts.

“That said, we seem to have entered an economic downturn that will have a broad impact on the digital advertising business. It’s always hard to predict how deep or how long these cycles will be, but I’d say that the situation seems worse than it did a quarter ago”.

The social media giant is under pressure after a 50 per cent stock drop this year, meaning the company’s market cap has sunk below $500 billion (€492 billion), making the company worth less than Tesla.


Do more with less


Meta and other technology companies such as Google have said they will hire less given current economic conditions.

Rising interest rates, inflation and recession fears have pounded the tech sector this year.

On Tuesday, Google’s parent company Alphabet reported weaker-than-expected earnings and revenue for the second quarter. The company said adjusted earnings per share hit $1.21 (€1.19) during the second quarter, compared to the expected $1.32 (€1.30).

Revenue growth also slowed to 13 per cent in the quarter from 62 per cent a year earlier, when consumer spending was higher after COVID-19 lockdowns lifted.

But investors focused elsewhere, notably on Google’s ad business which beat targets, despite “uncertainty” in the economy, which Alphabet executives cautioned on a call with investment analysts.

Alphabet reported second-quarter revenue of $69.69 billion (€68.66 billion), 81 per cent coming from Google's ad business, and nearly in line with the average expectation of $69.88 billion among investment researchers tracked by Refinitiv.

By contrast, shares of Snap fell more than 25 per cent last week after the company missed sales expectations and warned of an ad market slowdown.

Alphabet executives said Google was not immune to the pullback, which has been brought on by clients facing product shortages, less demand and a variety of other factors.

Rising wages, as well as rising prices of fuel and other items, have forced some ad buyers this year to pare marketing.


Not so cloudy for Microsoft


Meanwhile, Microsoft reported its slowest revenue growth since 2020. The US tech giant reported a profit of $16.7 billion on revenue of $51.9 billion (€50 billion) for the quarter.

It blamed changing exchange rates and challenges in advertising as well as suffering personal computer sales due to production holdups in China and lower demand.

But Microsoft's forecast revenue this fiscal year would grow by double digits, driven by demand for cloud computing services Azure.

The strong outlook shows Microsoft continues to benefit from the pandemic-led shift to hybrid work models and comes at a time when investors are bracing for an economic downturn, with inflation soaring and consumers cutting spending.

Newsletter

Related Articles

TIMES.KY
0:00
0:00
Close
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
×