Apple Outshines Amazon – Rundown of Earnings
Near the close of this week’s packed earnings calls, two of the five largest companies in the world, Apple, and Amazon, released their earnings to shareholders after the bell. On the short end of the stick was Amazon, which not only missed revenue estimates for the third quarter, but provided weak company guidance for the current quarter that worried investors from across the globe. Shares of Amazon in the aftermarket plummeted almost 13% after they posted Q4 revenue expectations between $140 – $148 billion, far off analysts’ projections of $155 billion. For the third quarter, the eCommerce giant’s sales had grown 15% year over year and recorded its first quarterly profit for 2022. Unfortunately, this did not matter, as their net income was down 9% year over year and their revenues fell below Wall Street’s estimates, especially within their cloud platform Amazon Web Services.
On the winning end was Apple, which posted record revenues for the third quarter, with sales increasing by 10% and revenues up 8.1% year over year. This growth trend continued since the pandemic when Apple succeeded with high demands from their target consumers. The pioneer in smartphone technology also recorded higher gross margins than expected, citing that demand and sales were larger than anticipated. However, Apple’s earnings were not perfect, as their iPhone sales and Services revenues were far lower than what analysts expected. Apple also did not provide any official guidance for Q4, which they have not done since 2020 due to economic uncertainty. Nevertheless, earnings season is still not done, as several corporations will continue to release their third-quarter numbers over the next couple of weeks.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.
