Results – Tech giants slowed down due to inflation and shortages

The tech giants, which pranced on highs during the pandemic, have been overtaken by inflation, shortages, competition and regulators, all challenges that will mark 2022.

Published: 29.04.2022, 02:06

Illustrative image.

AFP

Google, Meta and Apple for Silicon Valley, Microsoft and Amazon, neighbors of Seattle, all released their quarterly results this week.
Their turnover of several tens of billions of dollars remains impressive, and more or less in line with market expectations. But the economic situation, linked to the health crisis and the war in Ukraine, is weighing on their growth and their prospects.
Amazon has thus disappointed investors with weaker than expected sales forecasts for the current quarter: between 116 and 121 billion dollars, instead of the 125 billion expected by the consensus of analysts FactSet.
Its chief financial officer, Brian Olsavsky, estimated Thursday at $ 6 billion the additional costs over the first three months of the year, due in particular to the loss of productivity, inflation and the cost of labor – during the pandemic, the online retail giant doubled its staff to 1.62 million employees worldwide. Its stock fell about 9% in electronic trading after the stock market closed.

The TikTok spur

Apple also saw its growth slow over the period from January to March, as expected. Its quarterly revenue reached $97.2 billion, up 9% year-on-year. This is the first time since the summer of 2020 that Apple has posted single-digit growth.
The Cupertino group has so far managed to limit the supply problems affecting the entire electronics sector, particularly in the semiconductor industry. But the disruption caused by the resurgence of coronavirus cases should deprive it of 4 to 8 billion dollars of income for the current quarter, announced Thursday the leaders of the group.
“Our transition to short formats is not yet generating substantial revenue at this time, but we are optimistic,” assured Mark Zuckerberg, the founder of Meta. “It will take several years,” said Sheryl Sandberg, its director of operations.

Radiant cloud

We are possibly witnessing a “post-pandemic hangover”, according to analyst Paul Verna of eMarketer. The big tech companies “admittedly didn’t celebrate, but the health crisis has boosted their business enormously,” he explained. "That kind of growth couldn't last."
Google's parent company made a profit of $16.4 billion in the first quarter, 8% less than a year ago. Meta, for its part, published a net profit better than expected, 7.47 billion dollars, but down 21% over one year.
The social networking giant, which plunged on the stock market at the start of the year after losing users on Facebook for the first time, gained slightly this time around.
Some 3.64 billion people worldwide use at least one of the group's platforms (Facebook, Instagram, Messenger, WhatsApp) every month.
One sector of activity, however, is resisting the current constraints, driven by the habits adopted during the pandemic, from teleworking to entertainment and online shopping: the cloud. Revenues from Azure, Microsoft's remote computing platform, jumped 46% over one year, as in the previous quarter. AWS, Amazon's service, generated $18.4 billion in revenue in the first quarter (+36% year-on-year).
It is the industry leader with 33% of global cloud spending at the end of 2021, ahead of Microsoft (22%) and Google Cloud (9%), according to research firm Canalys. These five groups will also have to deal with recently passed European laws, which aim to regulate the practices of American technology leaders.

AFP

Published: 29.04.2022, 02:06

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