The previous week closed moved after the publication of the balance sheets of the big technology companies. Until Thursday, the main companies have been rising more than 7% in the three previous rounds, however after the results of the Apple, Amazon and Google -where in two of the three there was disappointment-, the market ending in red for major tech companies.
A local CEO explains why the crisis of global technologies would help Argentina
Lean presentation of results by the bitten apple
The Cupertino company presented the results corresponding to the first quarter of its fiscal year, which starts in the month of October. Apple will miss revenue, profit and sales expectations for many of its lines of business. In this sense, the total company sales which was founded by Steve Jobswere about 5% lower than last year in the first quarterrepresenting the first year-on-year sales drop since 2019.
Apple CEO, tim cook, said whate three factors mainly affected the results: youn dollar strengthening, production problems in China leading to iPhone 14 Pro and iPhone 14 Pro Max, and the general macroeconomic environment.
Finally, and to make clear how meager the results of the technology wereearnings per share totaled USD 1.88, which shows a drop of almost 11% year-on-year. This is explained by the somewhat poor performance of the iPhone, which, although it totaled revenues of more than USD 65 million, this represented a drop of 8% compared to the same period of the previous year.
However, after a first negative reading with falls in what is known as the aftermarket operations on Thursday (that is, after the market closes), andl Friday the stock was up as much as 2%.
The internet tech giant failed to beat market consensus and fell
Presentation of complex results for Alphabet, sincee not exceed the market consensus neither in income nor in earnings per share (GAP). Also, the iIncome generated by advertising on Youtube showed a negative surprise compared to analyst projections (USD7.96 billion vs. USD 8.25 billion estimate). This is the biggest graphic competition that YouTube is having, mainly with respect to TikTok, but also from other forms of short video. For its part, although revenues were more than USD 76,000, this barely reflects growth of 1%, which represents the weakest rise since 2013 (with the exception of the pandemic period).
Software sector with offshore competition
Lastly, the print company thatwill add a load of approximately USD 2,000 millionwhich will be impacting mainly in the first quarter of 2023 as a result of the layoff of employees that I announced in January. At the same time, expect to incur $500 million in additional costs related to reduced office space in the first quarter, and avoid possible other real estate charges in the future.
All these factors had a negative impact on the price on Friday, falling almost 3%.
The e-commerce giant continues to maintain
The leader in electronic commerce continues to show difficulties in boosting its profit. In a new presentation of the results, in this case, in those corresponding to the last quarter of 2022, Amazon, exceeding analyst expectations for revenue (USD 149.2 billion vs. USD 145.64 billion estimate), but could not do the same in terms of earnings per share (USD 0.03 vs USD 0.17). This is precisely the point that the market will require the most concern after the closing of the conference, since although Amazon showed a year-on-year growth of 9% in net sales (even including some extraordinary expenses) the Net Result continues to slow down. In line with the statement, revenue showed a 23% drop compared to the fourth quarter of 2021, having totaled USD 2.7 billion compared to USD 3.5 billion the previous year.
PayPal joins the wave of layoffs from technology companies
Finally, it should be noted that the Amazon Web Services (AWS) segment continues to be the most efficient, and in which Amazon at a company level continues to leverage its results. AWS posted net sales of $21,400 (20% year-over-year growth) and maintained operating income, slowing only slightly (-1.9%) compared to Q4 2021.
thus the market read negatively being the action that most impacted the balance when it fell almost 6% on Friday.
In summary, The big technologies present balances that, although in all cases show gains, the slowdown in revenues may reflect the negative impact of an economy with lower growth, with the question of how they will continue in the coming months. Given the rise in the days prior to the presentation of the balances, we recommend caution the following days after the publication.
*equities analyst at IOL investoronline
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