Amazon and Apple post mixed results as economic slump impacts demand

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Amazon and Apple have both posted mixed results for the fourth quarter as the economic slump dampened demand.

Amazon reported higher-than-expected net sales during the quarter for its online retail business and cloud computing services but delivered weaker than anticipated profits, while Apple missed Wall Street’s expectations for profit for the first time in seven years.

Amazon posted net sales growth of $149.2bn (£122.4bn) for the quarter to December 31, up 9% on last year. However, Amazon Web Services fell short of expectations, producing an operating income of $5.2bn (£4.3bn) on $21.4bn (£17.5bn) of sales. Analysts were expecting profit of $5.7bn (£4.7bn) on sales of $21.9bn (£17.9bn) billion.

Amazon chief executive Andy Jassy said: “Our relentless focus on providing the broadest selection, exceptional value, and fast delivery drove customer demand in our stores business during the fourth quarter that exceeded our expectations — and we’re appreciative of all our customers who turned to Amazon this past holiday season.

“We’re also encouraged by the continued progress we’re making in reducing our cost to serve in the operations part of our stores business. In the short term, we face an uncertain economy but we remain quite optimistic about the long-term opportunities for Amazon.

”The vast majority of total market segment share in both global retail and IT still reside in physical stores and on-premises data centres; and as this equation steadily flips, we believe our leading customer experiences in these areas along with the results of our continued hard work and invention to improve every day, will lead to significant growth in the coming years. When you also factor in our investments and innovation in several other broad customer experiences (eg: streaming entertainment, customer-first healthcare, broadband satellite connectivity for more communities globally), there are additional reasons to feel optimistic about what the future holds.”

Apple

Apple said its technology supply chain was hit by Covid-19 restrictions that created disruption in China, damaging iPhone sales.

The tech firm’s revenue fell 5% to $117.2bn (£96.1bn) in the three months to December 31 and net income fell 13% to $30bn (£34.6bn), below the $31bn (£25.4bn) forecast by analysts.

iPhone sales fell 8% to $65.8bn (£52.3bn) for the period and sales of Macs, watches and AirPods also dropped, while sales of iPads and its subscription services including Apple Music and TV, grew.

Apple chief executive Tim Cook said: “As we all continue to navigate a challenging environment, we are proud to have our best lineup of products and services ever, and as always, we remain focused on the long term and are leading with our values in everything we do.

“During the December quarter, we achieved a major milestone and are excited to report that we now have more than 2 billion active devices as part of our growing installed base.

Apple chief finance officer Luca Maestri said: “We set an all-time revenue record of $20.8bn (£17.0bn) in our Services business and in spite of a difficult macroeconomic environment and significant supply constraints, we grew total company revenue on a constant currency basis.

“We generated $34bn (£28bn) in operating cash flow and returned over $25bn (£20bn) to shareholders during the quarter while continuing to invest in our long-term growth plans.”