amazonApple, Meta and Alphabet of Google presented their figures for the first quarter of the year, revealing that they did not go through the turbulence of global markets undefeated.
“I want to acknowledge the challenges we’re seeing, from supply chain disruption from COVID … to shortages and war devastation in Ukraine,” Apple CEO Tim Cook said in a statement. “We are not immune to these challenges,” he added.
Companies may be feeling a bit “post-pandemic hangover”according to analyst Paul Verna, an analyst at Insider Intelligence and eMarketer.
“While it wasn’t a party for these companies, the pandemic boosted their business in a big way,” Verna told AFP.
The rapid growth seen during the health crisis was not sustainable, and tech firms should have better anticipated it, he added.
Amazon posted its first quarterly loss since 2015, dragged down by its investments in electric van maker Rivian, and warned that ongoing challenges will continue in the months ahead.
The e-commerce giant said it lost $3.8 billion in the first three months of the year, slipping into the red with a $7.6 billion loss in the value of its Rivian shares.
Amazon’s online sales were in line with analysts’ expectations, but CEO Andy Jassy warned that the coming months will be a testing time.
He cited pressure from war, inflation, the cost of production and the pandemic.
Amazon expects its sales in the current quarter to be between $116 billion and $121 billion, with exchange rates playing to its disadvantage.
The Amazon Web Services business unit, not yet a main source of revenue for the company, grew apace to $116.4 million in the first quarter of last year.
“This was a tough quarter for Amazon with trends in all key areas of the business going the wrong way and a weak outlook” for the second quarter, says Insider Intelligence principal analyst Andrew Lipsman.
“Amazon will need to find a way to get back to growing its commercial business in the coming quarters.”
Amazon invested heavily in its logistics network as online sales soared during the pandemic, only to now end up with “overcapacity” as inflation squeezes the family budget.
Manzana reported better-than-expected profit amid continued robust consumer demand, but warned that disruptions from resurgent coronavirus cases should rob it of some $4 billion to $8 billion of revenue in the second quarter of the year.
The iPhone maker posted record profit for the quarter, but executives said the difficulties of the pandemic had returned.
The impact will depend on how quickly production scales up in the Shanghai area, where factories have recently started to reopen after Covid lockdowns, Cook said in his communication.
iPhone sales still power Apple’s money machine.
Alphabet and Meta rely on digital advertising, and their earnings reports showed marketers have become more cautious with their budgets.
Both Silicon Valley companies promised to be more cost-conscious.
Alphabet and Meta are looking to join the TikTok-led trend of streaming short video clips with their respective Shorts and Reels products, though the format is hard to monetize.
“TikTok has become a major competitive threat,” said analyst Verna, referring to the pressure on YouTube.
Source: Ambito
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