Apple released its reports for the fourth fiscal quarter (ending in September) tonight and met the high expectations placed on it in the market – earnings of $ 1.24 per share. Revenue posted slightly less than forecast – $ 83.36 billion compared to expected revenue of $ 84.85 billion. Apple CEO Tim Cook claims that global supply disruptions and chip shortages cost the company $ 6 billion during the quarter.

The stock fell 5% in response to late Wall Street trading, but the decline has moderated to about 4%.

The company’s sales from iPhones stood at $ 38.8 billion, a jump of 47% compared to last year but less than market forecasts, which stood at $ 41.5 billion. Its revenue from services exceeded forecasts ($ 18.2 billion vs. $ 17.6 billion) and reflected 25% growth over last year. In the revenue segment of Macs, it slightly missed the forecast with sales of $ 9.18 billion, which was only a 1.6% increase compared to last year.

“We had a very strong performance despite the larger-than-expected supply disruptions, which we estimate cost us around $ 6 billion,” CEO Tim Cook told CNBC.

Amazon: The lowest profit since March 2020

The second giant that published tonight’s reports, Amazon, largely missed forecasts: the company posted net income of $ 6.12 per share in the third quarter compared to forecasts of $ 8.92 per share. Its revenue was $ 110 billion, $ 1 billion less than market expectations. This is the company’s lowest earnings since the quarter ended March 2020, the peak of the Corona plague, when it posted earnings of just $ 5.01 per share.

In the second quarter of the year, the company posted earnings of $ 15.12 per share, and in the same quarter last year earnings of $ 12.37 per share – so this is a disappointment not only in terms of forecasts but in terms of its performance this year and last.

The company provided forecasts for the last quarter of the year, according to which revenues will stand at $ 130-140 billion, representing growth of 4% to 12%. Analysts estimate that revenues will increase by 13.2% compared to the same period last year and stand at $ 142 billion.

Amazon CEO Andy Jesse said the company expects a jump of “several billion dollars” in its expenses in the next quarter due to manpower shortages, higher labor costs, global supply chain disruptions and rising prices for transportation services.

The stock is cut more than 5% in late trading on Wall Street.

Market expectations were not fully realized

Stock Dark Rose 2.5% today as investors waited for the results to be released. Since the beginning of the year, the share has risen by 18%, and in the last year the jump has already reached 37%. Its market capitalization already stands at more than $ 2.5 trillion.

Amazon Strengthened at a lower rate of 1.5%, and even in the longer term it shows less exciting growth than Apple. Since the beginning of the year, its share has risen by less than 9%, and looking at the last 12 months, the increase is only slightly higher – about 9.8%. The company’s market capitalization is about $ 1.7 trillion.

Analysts have estimated that Apple will post earnings of $ 1.24 per share and sales of $ 84.8 billion, and as mentioned, it met the bottom line forecast but missed the top. In the same period last year, it recorded earnings of 73 cents per share, so its earnings jumped 68%. Its sales in the third quarter of 2020 were $ 64.7 billion, so this segment is expected to grow by more than 30% – and it missed only slightly.

Apple ended the previous quarter with strong results that surpassed market forecasts. In July, it reported that in the third fiscal quarter it posted earnings per share of $ 1.3, compared to forecasts of $ 1.01. Its revenues totaled $ 81.4 billion compared to forecasts of $ 73.3 billion. Sales rose 36% and iPhone sales jumped 50%, with revenue from iPhone sales totaling $ 39.57 billion.

The launch of the new iPhone and iPad is not expected to be reflected in Apple’s reports this time around, as they hit stores two days after the end of the quarter according to its reports. At the same time, the company has previously stated that due to the global shortage of chips it will sell 10 million fewer iPhones than it estimates.

Apple has had quite a few tough struggles during the quarter, including an active legal proceeding with Epic Games. A few months ago the court ruled in favor of Apple on 9 out of 10 counts, but Judge Yvonne Gonzalez Rogers ruled that Apple would not be allowed to ban developers from providing links or references for users in order to pay for products and services outside of apps. The change will take effect in December.

In addition, regulators and legislators around the world are scrutinizing Apple in many ways. Just recently in the EU, Apple is being blamed for blocking its competitors’ NFC chip technology from accessing its devices, so all Apple users must use only Apple Pay. In addition, the European Commission is considering forcing Apple to use a USB-C charger similar to its competitors, in order to align all manufacturers.

Expect a significant drop in Amazon profits

Both Apple and Amazon are expected to be hit by the impending global tax reform. Earlier this month, history was made when 136 countries agreed on the reform, according to which the tax on the profits of the technology and pharmaceutical giants would be distributed in a “fairer way”. Instead of tax drills nicknamed “The Double Irish” or “Dutch Sandwich” – drills taken by technology giants to transfer their profits from European countries to tax havens in the Caribbean and the Americas – the tax will now be paid proportionally according to sales volume in the target countries. Yes, also in Israel.

The global tax rate on total revenue paid by Amazon between 2011 and 2020 was only 0.4%, while Apple paid 4.8%. The highest rate among the technology giants paid Microsoft , And it accounted for 5.7% of its revenue.

E-commerce giant Amazon has had quite a bit of success in the last quarter, and market analysts do not expect it to grow as strongly as Apple. The company’s sales are expected to reach $ 111.6 billion and it will post earnings of $ 8.91 per share. As mentioned, it greatly missed forecasts when it recorded a profit of $ 6.12 and revenue of $ 110 billion.

These are lower numbers than in the previous quarter, during which, it will be recalled, while Amazon recorded revenues of over one hundred billion dollars (113 billion to be exact) for the third time in a row, it missed forecasts of $ 2 billion. In the earnings line, analysts estimated that earnings per share would reach $ 12.28, but in practice it significantly exceeded forecasts and stood at $ 15.12 per share.

In the same quarter last year, Amazon posted revenue of $ 96 billion and net income of $ 12.37 per share, so while its revenue grew relative to last year – but earnings fell significantly.

In recent months, a number of things have clouded society. Among other things, the Reuters news agency published an extensive investigation that includes the company’s internal documents, because Amazon pushed products from competitors in the arena to promote its own goods at the expense of the latter. According to the documents, the company had a systematic campaign of changing the search results and creating knockoffs to boost its product lines in India, one of the company‚Äôs strongest markets. The documents reveal how Amazon’s private label team in India secretly used the company’s internal data to copy products sold by other companies and offer them in the Amazon arena.

In addition, employees at Google and Amazon published an article in the British Guardian newspaper earlier this month in which they called on the managements of the two companies to withdraw from their involvement in the Israeli government’s Nimbus’ cloud project. “We cannot support our employer’s decision to provide the Israeli army and government with technology that will be used to harm the Palestinians,” the workers wrote.

By Editor

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