ETtech looks at how the three major companies performed in the fourth quarter:
Alphabet
Alphabet reported lower-than-expected quarterly revenue as the slowdown had impacted the company’s digital ad business. The net income of the Goolgle parent declined to $13.62 billion, or $1.05 per share, from $20.64 billion, or $1.53 per share, in the year-ago period.
Revenue from Google advertising, which includes Search and YouTube and is the biggest revenue contributor, fell to $59.04 billion from $61.24 billion as advertisers spent less in a bid to cope with high inflation, interest rates and recession fears.
“It’s clear that after a period of significant acceleration in digital spending during the pandemic, the macroeconomic climate has become more challenging,” Alphabet chief executive officer Sundar Pichai told analysts on a post-earnings call.
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Google, the world’s largest digital marketing company by market share, is more susceptible to changes in online marketing spending. YouTube ads, the company’s constant source of revenue, has been facing competition from the surging popularity of short-form content platforms like TikTok.“We are committed to investing responsibly with great discipline and defining areas where we can operate more cost-effectively,” Pichai told analysts during the call.
Also read:Google CEO says its ChatGPT rival coming soon as a ‘companion’ to search
Apple
Apple Inc reported a 5% dip in revenue at $117.2 billion while profit stood at $30 billion, or $1.88 per share, as the company forecast a fall in revenue for the next quarter.
This is the first quarterly fall in revenue for the Cupertino, California-based company in nearly four years. Further, Apple’s profits missed Wall Street expectations for the first time since 2016, dragged down by iPhone sales for the first time since 2020.
Apple faced a wave of challenges during the quarter. Chief among those were supply-chain pressures when COVID lockdowns at a facility in Zhengzhou, China, slowed production of iPhone 14 Pro and Pro Max devices, both premium-priced models that would traditionally help drive Apple’s margins higher.
Apple CEO Tim Cook told Reuters that production disruptions that plagued Apple’s key quarter were now over. “Production is now back where we want it to be,” he said.
India was a shining performer for the company. The iPhone maker has achieved the all-time high revenue in India in the December quarter, with sales growth coming from every product segment. Apple sounded bullish about expansion in India post-Covid.
He said Apple grew “very strong double digits” in India year-on-year in the last quarter. “So we feel very good about how we performed,” he said.
Amazon
Despite reporting better-than-expected revenue at $149.2 billion, Amazon’s profit slumped to $300 million. The company said its operating profit could fall to zero in the current quarter.
Its chief financial officer told reporters that sales growth in its cloud business will slow for the next few quarters.
Chief Executive Andy Jassy, on the quarterly call, said: “Virtually, every enterprise” was treading carefully on cloud and other costs in the light of economic uncertainty.
“We’re going to help our customers find a way to spend less money,” he said. “We’re trying to build a set of relationships in business that outlasts all of us.”
Amazon recently laid off 18,000 employees.
Jassy also sounded optimistic about the firm’s international business. He said Amazon’s investments in online businesses in India, Brazil, the UAE, and Australia will take time to pay off, but these will eventually become large and profitable markets for the company.
“They’re all on the right trajectory and following trajectories that roughly look like what we saw in North America and our established international geographies,” Jassy said during the earnings call.
“We think it’s the right investment and believe we’re going to have a large profitable international ecommerce business.”
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