E-commerce giant Amazon reported Thursday that its sales grew more-than-expected in the recently ended quarter despite inflation and other economic turbulence.
Amazon’s revenue topped $121 billion in the quarter, but the company posted a $2 billion loss as it continued to work to contain costs — but its shares were still up 10 percent in after-hours trading.
A crowded streak of earnings from the world’s biggest tech companies has largely disappointed, but investors seemed relieved the news was no worse.
Recession fears, a strong dollar, shrinking advertising budgets and inflation – the boom in tech companies during the pandemic has now tipped into a downturn.
Microsoft and Facebook owner Meta both cited the damage to their businesses from a strong dollar, with the social media giant pointing to the greenback’s role in the company’s first annual revenue decline since its IPO in 2012.
In addition to generally bumpy economic times, companies like Netflix and Meta are grappling with stiff competition from rivals — and both said they’ve lost some ground.
Meta lost about 2 million monthly users between quarters, and Netflix lost nearly a million paying customers, which was fewer than expected.
Still, Netflix stock is up about 1 percent over the past five days, with investors possibly feeling hopeful after the company forecast an imminent subscriber recovery.
Markets appeared similarly reassured, although Google parent Alphabet was absent from revenue and earnings.
The Silicon Valley giant’s bad news didn’t come as a surprise as the inflow of online advertising money that fuels the company’s fortunes has slowed as inflation, war and other troubles plague the broader economy.
“Nevertheless, Google, with its tremendous market share in search advertising, is relatively well positioned to weather the stormy weather ahead,” said analyst Evelyn Mitchell.
As advertisers tightened their belts and Apple’s privacy changes impacted the companies’ sales of expensive but highly targeted ads, the damage has been uneven.
Meta’s earnings have suffered badly, and with a share price down about half of its value since February, it’s clear that investors are still concerned about the company’s future.
Analysts noted that Meta’s reported 14 percent decline in average price per ad was a sharp change that came on top of the first quarter, when ad prices fell 8 percent.
“The good news, if we can call it that, is that its digital advertising peers are also experiencing a slowdown,” said analyst Debra Aho Williamson.
Snapchat’s parent company, for example, reported that its loss nearly tripled to $422 million in the recently ended quarter, despite revenue up 13 percent amid conditions that it said were “more challenging” than expected.
“We are not satisfied with the results we are delivering, notwithstanding the current headwinds,” California-based Snap said in a letter to investors last week.
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