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Google and Apple Report Disappointing 4th Quarter Results



Google and Apple

Google and Apple reported disappointing results for the fourth quarter of 2022, while Amazon exceeded expectations, but warned that the coming months would be uncertain in a difficult time for Big Tech.

As shares in Meta skyrocketed a day after it reported better-than-expected results and signalled spending and job cuts, the world’s largest tech companies reported earnings.

The results come after several weeks of unprecedented layoffs in the usually untouchable tech sector amid concerns about the economy.

The gloomy mood came after a period of rapid growth during the peak Covid-19 period, when consumers went online for work, shopping, and entertainment.

Alphabet’s fourth-quarter revenue of $76 billion and profit of $13.6 billion were both lower than the same period a year ago, with share prices falling more than 6% in after-market trade.


Google Layoffs

According to CNN, Google’s crucial advertising sales fell to $63.1 billion in the fourth quarter, which was slightly better than what analysts had predicted. This was only the company’s second quarterly decline since going public in 2004.

“It’s clear that the macroeconomic climate has become more challenging after a period of significant acceleration in digital spending during the pandemic,” Google CEO Sundar Pichai said in a conference call with analysts.

Pichai announced last month a plan to lay off 12,000 employees in order to reverse a pandemic of over-hiring and focus on new areas, particularly artificial intelligence.

In another setback, Google, which has long regarded itself as an innovator, was caught off guard by the sudden rise of user-friendly AI such as ChatGPT, which is viewed as a potential competitor to Google’s all-powerful search engine.

Apple is the only tech titan that has yet to announce major layoffs in recent weeks, and investors are closely monitoring how China’s zero-Covid policy, which was only recently lifted, has affected its sales.


Apple Sales Problems

The world’s most valuable company reported a drop in quarterly revenue and profits for the final three months of last year, owing to a drop in sales of its flagship iPhones.

Apple’s revenue for the October to December period, the first quarter of its fiscal year, was $117.1 billion, a 5.4 percent decrease from the previous year. Analysts predicted $121.5 billion in quarterly sales, down from $123.9 billion a year ago.

The sales problems were traced back to China, which remains the primary manufacturing hub for iPhones, and the severe restrictions hampered Apple’s ability to export the iPhone 14 during the critical holiday season.

Meanwhile, Amazon reported an inflation-fueled increase in sales, despite the company announcing a massive round of layoffs to compensate for a hiring binge during the pandemic when business growth accelerated.

The company announced last month that it would lay off more than 18,000 employees after the workforce grew by 800,000 during the pandemic’s peak years.

However, its fourth-quarter sales of $149.2 billion were higher than the initial forecast of analysts polled by Factset, who predicted sales of $145.7 billion.

Amazon’s net profit, on the other hand, has plummeted to near zero from $14.32 billion a year ago.

“We face an uncertain economy in the short term, but we remain quite optimistic about Amazon’s long-term opportunities,” said CEO Andy Jassy.

The Big Tech earnings dump came a day after Meta reported that sales fell last year, as expected, for the first time since the company went public in 2012.

The social media giant reported a 1% drop in sales to $116.6 billion, which still exceeded expectations, and it also announced that the number of daily Facebook users has surpassed two billion for the first time.

However, CEO and founder Mark Zuckerberg expressed optimism about the future.

Meta’s stock rose as much as 25% on Thursday, setting a high bar for the other tech titans’ earnings announcements.

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