Apple breaks revenue record in 2022, but at a slower pace than other years

Apple presented its quarterly earnings statement, posting a drop in the first part of 2022 despite breaking investor expectations.

Apple posted a drop in activity between January and March as expected, but turned in better-than-expected results, with record iPhone sales in the first quarter of the year. 

Invoicing for this period, which corresponds to the second quarter of its fiscal year and the first quarter of 2022, reached 97.2 billion dollars, 9% above the record for the same period in 2021.

The firm’s net income in the quarter reached 25,000 million dollars, an increase of 5.8% over the same period of the previous year. 

By share, Wall Street’s favorite measure, beat analysts’ forecasts. On the other hand, the company pointed out that the disturbances due to the resurgence of coronavirus cases should deprive it of some 4,000 to 8,000 million dollars of turnover in the second quarter of the year. “It is significantly more” compared to the previous quarter, explained the financial director Luca Maestri, in a conference call to present the results.

“Big Tech” does not prevent economic turbulence

Tech giants that had a fat cow time during the pandemic are now dealing with a “hangover” compounded by inflation and the war in Ukraine, analysts conclude after seeing their results this week. Amazon, Apple , Meta and Google’s Alphabet presented their figures for the first quarter of the year, revealing that they did not go through the turmoil in global markets undefeated.

“I want to acknowledge the challenges we’re seeing, from supply chain disruption from COVID … to shortages and devastation from war in Ukraine,” Apple CEO Tim Cook said in a statement. “We are not immune to these challenges,” he added.

Companies may be feeling a bit of a “post-pandemic hangover,” according to analyst Paul Verna, an analyst at Insider Intelligence and eMarketer. “While it wasn’t a party for these companies, the pandemic boosted their business in a big way,” Verna told AFP. The rapid growth seen during the health crisis was not sustainable, and tech firms should have better anticipated it, he added.

Amazon overcapacity

Amazon posted its first quarterly loss since 2015, dragged down by its investments in electric van maker Rivian, and warned that ongoing challenges will continue in the months ahead. The e-commerce giant said it lost $3.8 billion in the first three months of the year, slipping into the red with a $7.6 billion loss in the value of its Rivian shares.

Amazon’s online sales were in line with analysts’ expectations, but CEO Andy Jassy warned that the coming months will be a testing time. He cited pressure from war, inflation, the cost of production and the pandemic. Amazon expects its sales in the current quarter to be between $116 billion and $121 billion, with exchange rates playing to its disadvantage.

The Amazon Web Services business unit, not yet a main source of revenue for the company, grew apace to $116.4 million in the first quarter of last year. “This was a tough quarter for Amazon with trends in all key areas of the business going the wrong way and a weak outlook” for the second quarter, says Insider Intelligence principal analyst Andrew Lipsman.

“Amazon will need to find a way to get back to growing its commercial business in the coming quarters.” Amazon invested heavily in its logistics network as online sales soared during the pandemic, only to now end up with “overcapacity” as inflation squeezes the family budget.

TikTok competition

Alphabet and Meta rely on digital advertising, and their earnings reports showed marketers have become more cautious with their budgets. Both Silicon Valley companies promised to be more cost-conscious. Alphabet and Meta are looking to join the TikTok-led trend of streaming short video clips with their respective Shorts and Reels products, though the format is hard to monetize.

“TikTok has become a major competitive threat,” said analyst Verna, referring to the pressure on YouTube. AFP.