ABad news continues to come from the technology industry. The online retailer Amazon.com gave a much worse outlook for the final quarter than expected when it presented its business results on Thursday after the market closed. In addition, revenue growth has slowed at Amazon Web Services (AWS), the cloud computing division that has become a flagship business for the company in recent years.
The electronics group Apple presented itself in better shape and slightly exceeded expectations overall. But it wasn’t convincing across the board either, because analysts had hoped for slightly higher sales of the iPhone, by far the group’s most important product.
Amazon’s stock price fell nearly 20 percent in after-hours trading. Apple shares were slightly down.
Amazon overall reported third-quarter sales growth of 15 percent to $127.1 billion, slightly below analysts’ expectations. Good news this time was that the core business with online trading is growing again. Sales increased here by 7 percent, in the previous quarter there had been a minus of 4 percent. Amazon’s advertising business is also holding up amidst the difficult economic environment and managed a 25 percent increase in sales.
Amazon’s net profit falls 9 percent
AWS revenue rose 27 percent, which was the best performance of any major Amazon division. But in the second quarter there was still growth of 33 percent. AWS has become increasingly important for the group in recent years, and the business is also very profitable compared to other activities. For the most recent quarter, its operating income was $5.4 billion, which far exceeded group-wide operating income of $2.5 billion. So without AWS, Amazon would have reported a loss in the billions. Amazon’s net income fell 9 percent in the past three months to $2.9 billion.
Back on course for growth: Amazon’s core business with online trading
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Image: AFP
For the fourth quarter, with the important Christmas business, Amazon predicts sales of between 140 billion and 148 billion dollars. This would weaken growth again, last year sales were $ 137.4 billion. Analysts had hoped for a forecast of $155 billion.
Apple increased its sales last quarter by 8 percent to $90.1 billion. Analysts had expected an average of $88.9 billion. iPhone sales climbed 10 percent to $42.6 billion, slightly below expectations. The services business, which includes the payment platform Apple Pay, the App Store and the video service Apple TV+, also performed slightly weaker than hoped. It’s now the company’s second-largest division, and sales this time were up 5 percent to $19.2 billion.
Sales of Macintosh computers rose 25 percent to $11.5 billion, while sales of products such as the Apple Watch digital clock and Airpod wireless headphones increased by around 10 percent to $9.7 billion. The only business that shrank was the iPad tablet computer, where sales fell 13 percent to $7.2 billion.
Apple’s net income increased marginally to $20.7 billion, and earnings per share of $1.29 were 2 cents higher than expected.
On the other hand, there were again very weak business figures from the semiconductor group Intel, even if it slightly exceeded the low expectations. It reported a 20 percent decline in revenue to $15.3 billion for the third quarter and net income fell 85 percent to $1.0 billion. Intel has also once again revised its sales forecast for the full year downwards. He now expects 63 billion to 64 billion dollars. Previously, he had forecast $65 billion to $68 billion, and even that was a significant reduction from the original $76 billion forecast.