Tech titans rake in £165bn in just 3 months
AMAZON and Apple raked in £165bn in three months as the online shopping boom and a new iPhone sent sales soaring.
They smashed their own quarterly records – capping off a bumper week for US tech firms that has also seen Microsoft, Alphabet and Facebook spiral to new highs.
But Amazon and Apple both sounded the alarm over what they believe will be a tricky Christmas period and reported earnings that fell short of analysts’ forecasts.
Amazon’s revenue hit £81bn in the July to September quarter – or £880m a day.
But profits slid by nearly half to £2.3bn as it was forced to pour cash into shoring up its supply chain, hiring and logistics.
The retail behemoth shocked Wall Street with a much lower sales forecast for the current quarter than analysts were expecting, after 18 months of booming business since the pandemic struck. Shares sank 4pc in after-hours trading following the release.
The firm – founded by Jeff Bezos in 1994 and led by chief executive Andy Jassy since July – is battling an employment boom in the US and supply shortages worldwide, as well as reopened high street stores.
It estimates it will make between £95bn and £102bn in the three months to December – which includes the key Christmas period. Analysts thought it would be £103bn.
Jassy said the company expects to take on ‘several billion dollars’ of extra costs as a result of the shortages, rising wages and higher shipping costs. He admitted: ‘It’ll be expensive for us in the short term.’ Apple also missed analysts’ revenue forecast – with turnover of £61bn falling short of estimates of £62bn. This still worked out at £663m a day. Profits rocketed by almost two-thirds to £15bn.
But Apple said it too was battling with logistical hurdles, with boss Tim Cook saying the company was experiencing ‘larger than expected supply constraints’ and manufacturing disruption in Asia.
The iPhone and iPad maker said a global shortage of microchips is now affecting ‘most of our products’. Cook said it is doing ‘everything we can do operationally to make sure we’re moving just as fast as possible’.
Apple’s sales were boosted by its latest smartphone, the iPhone 13 Pro – though overall iPhone sales were lower than expected. Boasting of ‘breakthrough’ camera technology it also uses the latest 5G technology, which is much faster than the current 4G most phones run on.
Apple and Amazon’s results came amid a busy week of results for US tech firms. Google-owner Alphabet recorded the highest growth in a decade as profits surged by more than two-thirds to £13.7bn as online ad sales soared. Rocketing demand for cloud computing services – which stores data remotely on servers – helped push Microsoft revenues to £32bn.
Also this week Facebook reported a 17pc jump in quarterly profits to £6.7bn, as it saw the number of daily active users on its site and apps balloon. Last night Facebook revealed it was rebranding as ‘Meta’, after years of scandals that have chipped away at the firm’s reputation.