Apple Down Before the Bell
Apple’s third-quarter earnings report showed a revenue decline in the company’s most iconic hardware products — iPhone, iPad and Mac.
However, the services business is growing rapidly, with revenue increasing over 8% to $21.2 billion in the June quarter. Apple’s services business includes a variety of products, such as advertising, AppleCare, cloud services, digital content, and payment services. Apple has over 1 billion paid subscribers, a number that’s doubled in three years. The company’s deal with Major League Soccer to broadcast its games on Apple TV is beating internal expectations for subscribers.
The services business is critical for shareholders because it has stronger margins than hardware products, is more predictable because of recurring billing, and provides more ways for the company to make money from its installed base of over 2 billion devices.
Apple won’t set growth records for its services business, but the business is larger now, and analysts expect it to post almost $60 billion in total sales in fiscal 2023.
Apple shares fell a little over 2% to $187.15 in extended trading after the report.
Amazon Beats Earnings Estimates, Stock Surges
Amazon reported second-quarter earnings on Thursday that beat analysts’ estimates by a wide margin.
The company’s earnings per share (EPS) came in at 65 cents, compared to the 35 cents that analysts were expecting.
Revenue was also strong, coming in at $134.4 billion, which was above the $131.5 billion that analysts were expecting.
The company’s cloud computing business, Amazon Web Services (AWS), also had a strong quarter, with revenue of $22.1 billion.
Advertising revenue was also up, coming in at $10.7 billion.
The strong earnings report sent Amazon’s stock soaring in after-hours trading, with shares up more than 10%.
The company’s guidance for the third quarter also beat expectations, with revenue expected to be between $138 billion and $143 billion.
This is good news for investors, as it suggests that Amazon’s growth is still on track.
The company’s strong performance in the second quarter was driven by a number of factors, including strong demand for its cloud computing services and its advertising business.
Amazon is also benefiting from the ongoing shift to online shopping, which has been accelerated by the COVID-19 pandemic.
Overall, the strong earnings report from Amazon is a positive sign for the company and its investors. It suggests that Amazon is still growing at a strong pace and that its businesses are performing well.