Apple
Well, Apple stood out, Amazon didn’t, and Snap was weak (again).
Microsoft unimpressed earlier in the week, but Meta saw a big surge in revenue, especially from ads and profits, setting off a one-day stock market jump that was unwound Thursday by weak economic data before Amazon and Apple reported.
Now it’s the turn of the seventh megacap tech to report on August 28, to save the day. It will be an awfully long time to wait for increasingly impatient investors.
Apple on Thursday reported a return to sales growth in its fiscal third quarter as iPhone revenue topped Wall Street targets, helping cushion a bigger-than-expected sales decline in major market China.
The company said revenue rose 4.9% to $US85.78 billion in the three months to June 29, topping the average analyst estimate of $US84.53 billion, according to market forecasts.
Apple shares edged up by around 0.6% after hours after sliding 1.7% in Thursday’s big sell-off.
Apple maintained its dividend at 25 US cents. In the fiscal second quarter, Apple announced a $US110 billion stock buyback – the biggest ever called for by a company.
Sales of iPhones fell 0.9% to $US39.30 billion, a smaller fall than the 2.2% drop analysts expected, as demand picked up ahead of the launch of artificial intelligence features.
Chief Financial Officer Luca Maestri said in an interview that the iPhone results were better than the company had expected three months ago. “The iPhone 15 family has been doing well
from the very beginning and still now – we have three quarters of the year behind us. It is performing better than the previous cycle, the iPhone 14,” she told Reuters.
Apple has been discounting its iPhones in China to compete with the much cheaper alternatives from local competitors such as Huawei. As a result, Apple’s sales in Greater China dropped 6.5% to $US14.73 billion. Analysts had been expecting a decline of 2.4%.
Maestri said that China sales fell less than 3%, excluding the effects of foreign exchange.
Apple reported an 8% rise in net income to $US21.5 billion from $US19.88 billion.
Sales in Apple’s services segment, which includes the App Store (Apple Music and TV/streaming services), rose 14.1% to $US24.21 billion, above market expectations of $US24.01 billion.
Mac sales grew 2.5% to $US7.01 billion, compared with estimates of $US7.02 billion, and the company saw its new line of iPads revitalize sales which jumped nearly 24% to $US7.16 billion, above expectations of $US6.61 billion.
In the company’s wearables segment, (Apple Watches and AirPods) headphones, sales fell 2.3% to $US8.10 billion, compared with analyst estimates of $US7.79 billion.
Amazon
After a strong March quarter that lifted the tech sector generally, Amazon missed on revenue in its June quarter report on Thursday and issued a weaker-than-expected forecast for the current third quarter.
The shares slid as much as 5% in after-hours trading.
Revenue was $US147.98 billion against a forecast of $US148.56. AWS (its cloud business) saw quarterly revenues of $US26.3 billion (up 13%) against forecasts for $US26 billion, but ad revenues of $US12.8 billion (up 20%) were just short of the forecast $US13 billion.
Amazon forecast current-quarter revenue to be between $US154 billion and $US158.5 billion, which would be growth of 8% to 11% compared with the third quarter last year. The midpoint of
Amazon’s forecast range was $US156.25 billion, well under the average analyst estimate of $US158.24 billion.
The company expects third-quarter operating income to be in the range of $US11.5 billion to $US15 billion, compared with $US11.2 billion in the year-ago period. Analysts have forecast third-quarter operating income of $US15.3 billion, so well short there as well.
Traders ignored the strong rise in earnings for the June quarter – the Seattle-based company said it earned $US13.5 billion for the latest three-month period, higher than the $US10.99 billion industry analysts surveyed by FactSet.
Amazon earned $US6.7 billion during the same period last year when it was emerging from radical cuts to costs and staff numbers (more than 27,000 people were cut).
Snap
Shares in the small big Tech, Snap, fell over 20% in after-hours trading on Thursday after the company reported issued guidance for the third quarter that trailed analyst estimates while second-quarter revenue also missed.
Snap said that third-quarter revenue will be between $US1.335 billion and $US1.375 billion, or $US1.355 billion in the middle of the range. Analysts had forecast $US1.36 billion after it reported revenue of $US1.24 billion for the June quarter compared with expectations of $US1.25 billion.
The company expects adjusted earnings of $US70 million to $US100 million, trailing the $US110 million average analyst estimate, according to consensus forecasts.