By Deepta Bolaky
Apple Inc. and Amazon.com, Inc
The last two of the five most prominent technology companies, Apple Inc. (AAPL) and Amazon (AMZN), which form part of the FAANG group, have reported interesting quarterly earnings and highlighted their actions during this unprecedented uncertainty.
The company missed on earnings estimates but reported better-than-expected revenue:
iPad, iPhone, and Mac all reported a decrease (year-on-year) of 10%, 7%, and 3%, respectively. The shortfall was compensated by strong performance in the services and wearables category. The pandemic-induced environment has driven revenue for Services to an all-time high and a quarterly record for Wearables.
|Net sales by category:||
Three Months Ended March 28, 2020
$ (in millions)
Three Months Ended March 30, 2020
$ (in millions)
|Wearables, Home and Accessories||6,284||5,129|
|Total Net Sales||$58,313||$58,015|
The current crisis has made the stock cheaper, and as widely expected, the board has also authorised an increase to the existing share repurchase program despite the uncertain environment. However, investors took note of an increase of only $50B compared to the forecasted amount of $75B-$100B.
In the month of April, the company’s share price substantially pared the losses seen since February 2020. Its stock price rallied by more than 20% this month and is currently trading at $293.80.
After the release of the results, the company’s share price fell by around 2% in after-hours trading.
Amazon, the leading e-commerce retailer, has also reported its first quarterly earnings after the bell on Thursday:
While the founder and CEO provided an upbeat outlook of how Amazon has navigated through the current crisis with the availability and adaptability of different products from online shopping to Amazon Web Series to Prime Video and Fire TV, many investors focused on the company’s intentions to use Q2 operating profit for COVID-related expenses:
“If you are a shareowner in Amazon, you may want to take a seat, because we’re not thinking small. Under normal circumstances, in this coming Q2, we would expect to make some $4 billion or more in operating profit. But these are not normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on COVID-related expenses getting products to customers and keeping employees safe.”
The company’s share price rose by nearly 30% in April, pairing all the losses made towards the end of February and in March. As of writing, the share is currently trading at $2,474.
After the release of the results, the company’s share price tumbled by around 5% in after-hours trading.
By Deepta Bolaky
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