SAN FRANCISCO, Feb 3, 2023 (BSS/AFP) - Google and Apple on Thursday
reported downbeat results for the last quarter of 2022 as Amazon beat
expectations, but warned that the coming months would be uncertain in a
difficult moment for Big Tech.
The tech titans posted earnings as shares in Meta skyrocketed a day after it
reported better results than expected and signaled spending and job cuts.
The results follow weeks of unprecedented layoff rounds in the usually
unassailable tech sector amid pessimism about the economic outlook.
The souring mood followed a long spell of outsized growth during the peak
Covid-19 period when consumers went online for work, shopping and
"Big Tech calls from Apple, Amazon, and Alphabet painting a much different
picture of demand environment than the tech bears were hoping for," tweeted
Wedbush analyst Dan Ives, referring to investors who believe shares are on a
While earnings reports show there is "caution in the air" there are signs
that the companies could be heading for soft landings, the analyst added.
Google parent Alphabet's revenue of $76 billion in its fourth quarter and
profit of $13.6 billion were below what it made in the same period a year
earlier, with share prices falling more than 3 percent in after-market trade.
Google saw a slump in its crucial advertising sales, which were slightly
better than analysts had projected, according to data compiled by Factset.
"It's clear that after a period of significant acceleration in digital
spending during the pandemic, the macro economic climate has become more
challenging," Google CEO Sundar Pichai said in an earnings call.
Pichai last month announced a plan to lay off 12,000 employees in order to
reverse pandemic over-hiring and focus on new areas, especially artificial
Google was caught off guard by the sudden rise of user-friendly AI such as
ChatGPT, which is seen as a potential rival to Google's popular search
Apple is the only US tech giant that has not announced major layoffs in
The world's biggest company in terms of market value reported a fall in
quarterly revenue and profits for the final three months last year, hit by a
drop in sales of its flagship iPhones.
Apple sales were hit by curtailed production at factories due to China's
zero-Covid policy that was only recently lifted.
"COVID-19 related challenges" that "significantly" reduced Apple's supply of
iPhone 14 Pro and iPhone 14 Pro Max lasted through most of December, Apple
chief executive Tim Cook said on an earnings call.
- 'Unprecedented circumstances' -
Apple's revenue was $117.1 billion, down 5.4 percent from a year ago for the
same quarter a year earlier, missing what analysts had forecast.
"The world continues to face unprecedented circumstances, from inflation to
war in Eastern Europe, to the enduring impacts of the pandemic and we know
that Apple is not immune to it," Cook said.
Amazon meanwhile reported an inflation-fueled increase in sales despite the
company announcing a massive round of layoffs to correct for a hiring binge
during the pandemic when business growth ramped up.
"During periods of economic uncertainty, consumers are very careful about how
they allocate their resources and where they choose to spend their money,"
Amazon chief financial officer Brian Olsavsky said on an earnings call.
"We saw them spend less on discretionary categories and shift to lower priced
items in value brands in categories like electronics."
Last month, the company said it would let go more than 18,000 employees after
the workforce swelled by 800,000 employees during the peak years of the
Amazon's sales figures of $149.2 billion in the quarter were better than
initial forecasts by analysts polled by Factset, but its profit took a
massive hit, falling to near zero.
"In the short term, we face an uncertain economy, but we remain quite
optimistic about the long-term opportunities for Amazon," said CEO Andy
The Big Tech earnings dump came a day after Meta said quarterly sales dropped
one percent, which beat expectations, and announced that the number of daily
users on Facebook hit two billion for the first time.
Shares in Meta ended the formal trading day up 23 percent.