A rare revenue drop for the tech company was reported in Apple’s first-quarter earnings report. Apple, Amazon, and Alphabet, the A-Team of big tech, all reported poor results on Thursday, a day after Facebook owner Meta defied the gloomy trend in technology by reporting better-than-expected numbers. Apple shares fell more than 4 percent on Thursday following the release of the company's first-quarter earnings report, which included uncommon shortfalls in revenue, profit, and sales.
After severe Covid-19 lockdowns and related demonstrations in China disrupted iPhone production at its largest supplier, the iPhone manufacturer missed analyst profit estimates for the first time in seven years. The company’s largest quarterly revenue drop in almost seven years was marked at $117.2bn - down 5.49% from last year when record holiday sales were reported. The amount was less than the average analyst expectation of $121.10 billion.
Observers are calling it shocking that Apple alluded to ongoing headwinds in a press release accompanying the report. Lockdowns in China, where 90% of its devices are made, cost it $4bn in 2022. Cook told investors on Thursday that iPhone revenue would have climbed in the quarter if not for these supply challenges, but manufacturing is returning to pre-shutdown expectations.
According to analysts, although Apple has been seen as a haven for investment in the increasingly volatile tech space, the tide may be changing. In its October earnings call, the business warned that it anticipated a downturn, with chief financial officer Luca Maestri mentioning how there would be continued global uncertainty.
According to Jesse Cohen, even the most valuable US-traded company is not immune to the challenges that Apple is facing in its first quarter. He mentioned how the report was very weak. Amazon revealed results that were worse than expected on Thursday, while Google parent Alphabet's revenue was affected by a pullback by advertisers.
Amazon has eliminated 18,000 jobs after its pandemic boom. The tech and retail giant lost $2.7bn in 2022, down from $33.4bn the year before. Rivian investment losses were $12.7bn pre-tax. Sales rose 9% to $514bn from $469.8bn in 2021. Sales of $21.4bn were reported by Amazon’s Web Services department. Also known as their most reliable department. This was an increase of 20% from a year earlier. However, it was below analysts’ expectations.
Alphabet narrowly missed analyst projections, indicating decreased search advertising demand in a slowing economy. For the quarter, sales were $63.1bn, slightly below the $63.2bn expected. Alphabet slashed 12,000 jobs—6% of its global workforce—last month to become more efficient.
Alphabet cut 6% of its global workforce last month to make the company more efficient. The US Department of Justice sued it for exploiting its digital advertising market dominance. Meta, Facebook's parent corporation, is turning around. Meta stock rose 26% on Thursday, its highest one-day gain in over a decade. After CEO Mark Zuckerberg pledged to trim Meta, its stock rose. Analysts praised the action, raising their stock ratings. Apple has dodged tech industry layoffs.