(BFM Bourse) – The three major technology groups published disappointing results but experienced mixed fortunes on the stock market this Friday.
If Meta was able to reassure investors by putting itself in cost-killer mode, the same can hardly be said of the three members of Gafam (Google i.e. Alphabet, Amazon, Facebook now Meta, Apple and Microsoft) who published their results Thursday evening .
Nevertheless Apple manages to pull out of the game on the stock market. Around 4:45 p.m., the title rose 4% on Wall Street, while Amazon fell by 4.5% and Alphabet was stable.
Apple’s chief financial officer, Luca Maestri, quoted by CNBC, told analysts that iPhone sales performance should be better in terms of annual variation in the current quarter than in the previous one (from October to December). ).
Deutsche Bank believes that this is an “encouraging” signal, in particular because the current quarter is seven days lower than the previous quarter, and the macroeconomic environment is deleterious.
Apple’s results released last night were nonetheless disappointing. Several indicators in the results for the first quarter of the 2022-2023 fiscal year ending next September are at half mast. The 5.4% year-on-year drop in revenue to $117 billion was the steepest since 2016, according to CNBC. And the first since 2019, according to Bloomberg. Analysts on average had expected a figure of $121.1 billion.
At $1.88, earnings per share were lower than expected ($1.94), again a first since 2016, according to Reuters.
A sign of hope for Apple
Down more than 8%, iPhone sales disappointed, settling at $65.8 billion against a consensus of more than $68 billion according to CNBC, as did Mac sales (7.7 billion against 9, 6 billion). Only sales of iPads and services showed growth in the quarter.
Managing Director Tim Cook explained that these results were hurt by three headwinds, namely the appreciation of the dollar – a strong greenback translates into weaker overseas sales when converted into dollars – difficulties of production in China, which penalized iPhone 14 Pro sales, and the deteriorated macroeconomic environment. So even a resilient company like Apple is not insensitive to the economic situation. The group did not give any quantified outlook for the future.
The cloud, Amazon’s Achilles’ heel
Amazon, for its part, saw revenue grow 9% in the fourth quarter of 2022 to $149.2 billion, and 12% excluding currency effects, beating expectations. But this is not the case for its dematerialized computing division (cloud), Amazon Web Services, whose revenues amounted to 21.4 billion euros, slightly less than the 21.87 billion expected by the analysts. Growth, still very strong in the cloud, is slowing down to 20% against 27% in the previous quarter and 40% over the same period of 2021.
“AWS’ expected deceleration has been even worse than expected and means Amazon cannot rely as heavily on operating earnings from this business unit in the quarters ahead,” Insider Intelligence analyst Andrew Lipsman said. quoted by Bloomberg.
CFO Brian Olavsky has warned that this loss of cloud momentum will continue over the next few quarters. He also explained that consumers tend to switch to cheaper brands due to inflation.
The quantified outlook also cools investors. For the first quarter, Amazon expects revenues of between 121 billion and 126 billion dollars, or, in the middle of the range, less than 125.5 billion, notes Michael Hewson of CMC Markets. Operating profit is expected between 0 and 4 billion dollars, while the market was expecting 4 billion.
The company is currently in the process of cutting costs to cope with the deteriorating economic situation, the group having announced last month around 18,000 job cuts worldwide.
Advertising on Youtube at half mast
Alphabet, Google’s parent company, narrowly missed market expectations for revenue. Fourth-quarter revenue came in at $76.05 billion versus $76.53 billion expected, hurt by sluggish advertising revenue. Earnings per share, at $1.05, is further from the consensus ($1.20).
Advertising revenue generated by the YouTube video site came in at $7.96 billion, up from $8.63 billion a year earlier, and more than $8 billion expected by analysts. For Google as a whole (including Youtube), advertising revenue fell 2.2% year on year to $67.84 billion.
Like Amazon, the cloud division also disappointed with revenue of just $7.315 billion versus $7.43 billion expected by analysts.
“Even search engine advertising and ‘cloud’ services (…), financial pillars” of Alphabet, are suffering from competition from Amazon (which is gradually eating away at advertising market share digital) and the poor economic situation, underlines Evelyn Mitchell, analyst of Insider Intelligence, quoted by AFP.
“It is clear that after a period of significant acceleration in digital spending during the pandemic, the macro-economic climate has become more complicated,” Sundar Pichai admitted from the outset during the conference call, to analysts, also quoted by l AFP.
Julien Marion – ©2023 BFM Bourse
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