The tech-heavy Nasdaq Composite Futures plunged 1.51% following the disappointment from investors as Wall Street’s big tech stocks yesterday reported lower-than-expected earnings in the previous quarter.
Alphabet Q4 earnings missed expectations as EPS was at $1.05 vs. $1.18 expected. Revenue grew only 1% YoY to $76.05 billion vs. $76.53 billion expected. This is Alphabet’s third slowest growth rate in its history. YouTube advertising revenue also missed forecasts with $7.96 billion vs. $8.25 billion expected.
Meanwhile, Amazon Q4 EPS was $0.03 vs $0.13 expected. Revenue was $149.20 billion vs. $145.42 billion expected, representing only 9% growth, which was the slowest quarter in its history as inflationary pressures and aggressive rate hikes by the Fed to a higher level put consumer spending on hold.
Cost of goods sold grew 6% to $85 billion, higher than expectations while SG&A surged 19% to $39B. R&D expenses also rose 36% to $20 billion.
Additionally, Apple reports first earnings miss in nearly seven years with EPS $1.88 vs. $1.94 expected, while revenue was $117.15 billion vs. $121.10 billion expected, Down 5% YoY, the first YoY sales decline since 2019. Apple recorded its first decline in iPhone revenue since the third quarter of 2020.
CEO Tim Cook said three factors impacted the results; a strong dollar, production issues in China during Covid outbreak, and the overall macroeconomic situation.
A few days earlier, Meta Platform reported lower earnings for its fourth quarter as well. EPS in 4Q22 was $1.76 vs. $2.22 expected. However, fourth-quarter revenue was $32.17 billion that beat expectations for $31.53 billion estimated by Refinitiv.
Despite beating expectations, revenue in the final quarter of 2022 fell 4% from a year earlier, marking its third straight quarter of declining sales as cost and expenses soared 22% to $25.8B.
Microsoft was the only big tech in Wall Street to record higher EPS in thq fourth quarter, posting $2.32 per share, adjusted, vs. $2.29 per share as expected by Refinitiv. Revenue was $52.75 billion, vs. $52.94 billion as expected by analysts.
Business weakened in December, including in growth of consumption of Azure cloud services, Microsoft Chief Finance Amy Hood said. During that stretch of time over the months, growth in new business was lower than management had expected for Microsoft 365 productivity software subscriptions, Windows Commercial products and Enterprise Mobility and Security offerings.
The share price of Alphabet fell 4.6% after hours, while Amazon plunged 5%, Apple dipped 3%, Meta slipped 2% and Microsoft fell 0.67%.
