After yesterday's session, major technology companies Google and Amazon delivered second-quarter reports. The results turned out to be better than analysts' expectations, and the companies traded higher in pre-session trading. The major U.S. indices also reacted with corresponding increases:
Apple (AAPL.US)
Earnings per share (EPS): 1.20 USD vs. 1.16 USD expected
Revenue: 82.96 bln USD vs 82.97 bln USD expected
Revenues from iPhone sales: 40.7 bln USD vs 38.9 bln USD expected
- Apple achieved strong earnings primarily due to strong iPhone sales, additionally, CEO Tim Cook reported an improving supply chain which positions the company well for the next key quarters of the year (primarily Q4);
- Revenues from iPhone sales totaled 40.7 bln USD versus 38.9 bln USD expected by the market. Despite the record revenue, however, the company's net profit fell nearly 10.5% year-on-year. The report showed that demand for the company's products remains very high despite record inflation and the resulting 'budget cuts' by households.
- Apple is set to unveil new models in the fall: the iPhone14 and the Series 8 SmartWatch, which could improve sales in the fourth quarter of the year and significantly impact results in Q1 2023. Next year, Apple is also set to debut its AR/VR business through a new headset design - the product will become the basis for the company to build a significant number of services and products as part of the 'Metaverse' trend.
Amazon (AMZN.US)
Earnings per share (EPS): -0.20 USD vs 0.12 USD forecast
Revenue: 121.23 bln USD vs. 119.09 bln USD forecast
Amazon Web Services: 19.7 bln USD vs 19.56 bln USD
Advertising revenue: 8.76 bln USD vs 8.65 bln USD
- The company, despite the unfavorable economic environment, beat forecasts for revenue from cloud services (AWS), which underpins the company's margins. Advertising profits beat analysts' expectations despite weakened forecasts for the advertising industry;
- The company expects Q3 2022 revenue between 125/130 bln USD vs 126.4 bln USD expectations.
- The company laid off nearly 99,000 employees as part of a cost-cutting program. It is worth pointing out, however, that Amazon's workforce doubled during the pandemic. The company intends to continue to increase employment exclusively in its advertising and cloud computing (AWS) division;
- The company lost about 11.5 bln USD on investments this year. The biggest loss was generated by electric car maker Rivian. Amazon's loss from its purchase of Rivian shares now stands at 3.9 bln USD and contributed to a final loss of 2 bln USD for the quarter.
- Amazon shares traded higher by nearly 12% before the market opened.
