Meta founder and CEO Mark Zuckerberg shows off his company's latest livestreaming smart glasses, made in partnership with Ray-Ban, at the tech giant's Connect developer conference in September 2023, in Menlo Park, California. Photo / AP
Three of Wall Street’s “Magnificent 7″ reported today, all beating expectations.
Meta Platforms Inc tripled its profit and posted sharply higher revenue in the final quarter of 2023, boosted by a rebound in digital advertising as well cost-cutting and layoffs in what CEO Mark Zuckerberg called the “year of efficiency” that saw more than one in five employees laid off.
The owner of Facebook and Instagram also announced its first-ever dividend — of 50c per share — plus a US$50b stock buyback. Meta said it plans to pay a quarterly dividend going forward.
Meta’s shares jumped 14.1 per cent, to US$450.28 in after-hours trading for a market cap of just over US$1.01 trillion.
Meta earned US$14b, or US$5.33 per share, in the October-December period, up from US$4.65b, or $1.76 per share, a year earlier.
Revenue grew 25 per cent to US$40.11b from $32.17b.
Meta also grew the user base on its apps, with monthly active users on its family of apps — Facebook, Instagram, Messenger and WhatsApp — reaching 3.98b as of the end of the year, up 6 per cent from 2022.
The blowout results come a day after Zuckerberg testified before the US Senate along with other social media CEOs about the dangers their platforms pose to children.
For the current quarter, Meta is forecasting revenue of US$34.5b to US$37b, above Wall Street’s expectations.
The company said it had 67,317 employees as of December 31, 2023, a decrease of 22 per cent year-over-year after it laid off thousands to cut expenses.
But Meta expects higher payroll costs this year as it plans to add more highly paid AI specialists to further its ambitions and compete with other tech giants for talent in this area.
The company’s Reality Labs segment, which includes its virtual reality headsets and augmented reality technology, grew its revenue by 47 per cent to US$1.07 billion — but it still reported an overall loss of US$4.65b for the quarter.
Apple snapped out of a year-long sales funk during its holiday-season quarter, propelled by solid demand for the latest model of its iPhone and still-robust growth in a services division facing legal threats that could undermine its prospects.
The modest revenue growth announced today as part of Apple’s October-December results ended four consecutive quarters of year-over-year sales declines.
After years of holding that mantle, Apple recently ceded the top spot to its long-time rival Microsoft, which has been elevated largely through its early leadership in artificial intelligence technology.
Apple is hoping to shift the narrative back in its favour with tomorrow’s release of its Vision Pro headset that transports users into a hybrid of physical and digital environments — a combination the company is promoting as “spatial computing.” But the first version of the Vision Pro will cost US$3500 — a lofty price tag analysts expect to constrain demand this year.
Despite recurring worries that Apple may be entering a period of slower growth compared with its track record over the past 20 years, the Cupertino, California, is still thriving.
Apple’s revenue for its most recent quarter rose 2 per cnt from the same time in the previous year to US$119.58b.
The company earned US$33.92b, or US$2.18 per share, a 13 per cent gain from the same time last year.
As usual, the iPhone accounted for the bulk of Apple’s revenue. Sales of the company’s marquee product totalled US$69.7b in the past quarter, a 6 per cent increase from the same time in the prior year. Those results include the latest iPhone that came out in late September, including a premium model that includes a special video recording feature designed for playing back on the Vision Pro.
READ MORE: Microsoft profit soars 33% on AI, cloud gains; Google’s parent returns to double-digit growth
Apple’s services division, which is tied largely to the iPhone, posted an 11 per cent rise in revenue from the previous year to $23.12b.
Both the revenue and earnings for the quarter exceeded analysts’ projections.
But investors appeared unimpressed with the showing as Apple’s stock price dropped 1 per cent in extended trading after the numbers came out.
While it has been consistently generating double-digit revenue growth, Apple’s services division is under legal attack. The results of the legal challenges could siphon away a significant chunk of revenue flowing from a search deal with Google and commissions collected through the iPhone app store when consumers complete digital transactions on the device.
Apple’s agreement to make Google the default search engine on the iPhone and Safari browser — a deal that brings in an estimated US$15b to $20b annually — is the focal point of antitrust case brought by the US Justice Department that will shift into its final phase in May.
Another antitrust case brought by video game maker Epic Games and new regulatory rules in Europe already have forced Apple to revise its commission system in the iPhone app store, although critics say the concessions are illusory and are pledging to push for even more dramatic changes.
The past quarter also pointed to faltering sales in China, a major market for Apple and an area that investors have been fretting about because of that country’s weakening economy and reports that the government there may prohibit its workers from buying iPhones. Apple’s revenue in China dropped 13 per cent from the previous year to US$20.82b.
Amazon on Thursday reported better-than-expected revenue and profits for the fourth quarter, driven by strong consumer spending during the holiday shopping season.
The Seattle-based e-commerce company said it earned $170b in revenue and $10.6b in profits during the last three months of 2023, beating expectations.
In a statement, Amazon CEO Andy Jassy called it a “record-breaking” holiday shopping season for the company, which saw a 14 per cent growth in revenue compared to the same period in 2022.
Despite challenges posed from increasing credit card debt and delinquencies, along with higher prices and borrowing costs, US consumer spending was up in November and December, following a slip in October after six straight months of gains.
Like other retailers, Amazon aimed to lure holiday shoppers through fast-shipping and discount events, including a prominent sales event for Prime members held in October. The company said its online retail business earned US$70.5b in revenue during the quarter, a 9 per cent jump compared to $64.53b during the same period in 2022.
On a call with reporters on Thursday, Amazon’s Chief Financial Officer Brian Olsavsky said the company is seeing more purchases from Prime members who are being lured by better delivery speeds for online orders. He also said revenue is being driven by fees from third-party sellers and the company’s advertising business, which is poised to grow as the tech giant brings ads to Prime Video.
“There’s a lot of enthusiasm from advertisers,” Olsavsky said, while noting customers who don’t want ads to intrude their streaming experience can pay an additional US$2.99 per month to avoid it. (The ad-subsidised version of the service is not scheduled to be released in NZ, at least not this year.)
Meanwhile, the company’s cloud computing unit AWS earned US$24.2b during the last quarter. That represented a 13 per cent jump in revenue compared to the same period in 2022, but its growth has slowed down compared to prior years.
Olsavsky also said he expects AWS to accelerate this year, saying businesses that use the cloud service are cutting costs less than before and are more interested in generative AI products Amazon has rolled out in the past year, like the chatbot Q.
Generative artificial intelligence has been a major area of focus for the company, which initially appeared to be falling behind the AI arms race sparked by San Francisco startup OpenAI’s release of ChatGPT in late 2022. But since then, it has been making investments to capitalize on the surging public and business interest in new AI tools.
Roughly an hour before it released its earnings, Amazon announced a new generative AI-powered shopping assistant called Rufus. The company – which has also integrated AI-generated summaries of product reviews into its online shopping site – says Rufus will answer customer questions on products and help them discover new items.
Amazon is also pouring up to $4b into an artificial intelligence company called Anthropic, an investment that’s under scrutiny by federal regulators concerned about the relationship tech companies are forging with AI startups.
The company’s sway has long been under scrutiny by regulators in the US and abroad. This week, Amazon and iRobot called off an acquisition deal after receiving pushback from regulators in Europe. The Federal Trade Commission is also suing Amazon over allegations it inflates online prices and overcharges sellers.
Overall, the company reported it earned US$30.4b in profits last year after losing US$2.7b in 2022.
In an effort to increase profitability and cut down on costs, Amazon laid off roughly 27,000 corporate employees between late 2022 and early last year. The company and subsidiaries, such as the streaming platform Twitch and the audiobook service Audible, also cut thousands of jobs last month.
Amazon’s stock rose as much as 8 per cent in after-hours trading.
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