Apple shares fall while Meta and Amazon soar on key earnings

Meta shares rise by 14% in after-hours trade as it announces dividend

Thu, 01 Feb, 2024 - 22:15

Eamon Quinn

Apple posted quarterly earnings tonight that exceeded expectations, while Meta Platforms, which owns Facebook, Instagram, and WhatsApp, beat revenue estimates by a wide margin, sending its shares soaring 14% in after-hours trading.

The tech giants, along with Amazon, were among the last of the Big Tech giants to report earnings for the key Christmas season.

The reports are attracting even more attention than usual amid investor jitters that their huge winning streak on stock markets may be coming to an abrupt end. Much of their stock gains last year were propelled by investor hopes for a new wave of spending on artificial intelligence products.

Apple reported sales and profit that beat estimates, powered by growth in its iPhone business. But China sales missed analysts' targets.

"We did feel good about the plus 6% [revenue growth] for iPhone," Apple chief executive Tim Cook said.

"We had particularly strong double-digit growth on iPhone in emerging markets outside of China. The iPhone is doing well in those markets," he said.

"China is the most competitive smartphone market in the world, and that hasn't changed."

For the quarter, Apple reported sales of $119.58bn (€109.98bn).

Shares in Apple, the world's most valuable company, fell almost 2% in after-hours trading. Coming into last night, the shares in the iPhone giant had shed 4% in the past few days, but had risen by 28% from this time last year.

Apple employs 6,000 people in Ireland and is closely watched here for the unspecified amounts in corporation tax it contributes to the Irish exchequer. Picture: Larry Cummins

The company employs 6,000 people in Ireland and is also closely watched here for the unspecified amounts in corporation taxes it contributes to the Irish exchequer.

For its part, Meta Platforms exceeded expectations by a large amount. Meta also announced its first-ever dividend, returning capital to shareholders even as it spends billions of dollars on new infrastructure to support artificial intelligence. Shares in the Facebook and Instagram owner, soared by 14% in after-hours trading.

Ahead of the latest earnings report, shares in Meta, which employs 3,000 people here, had surged by 159% from a year ago. Its revenue rose 25% to $40.1bn for the quarter to the end of December. Analysts had been expecting revenue of $39.2bn from Meta.

Amazon, which also had quarterly earnings on Thursday night, beat revenue expectations on robust growth in online spending by consumers, despite high borrowing costs. Revenue in the fourth quarter rose 14% to $170bn, helping its shares rise 6% after hours. Amazon Web Services, or AWS, which is the largest cloud services unit in the world, brought in revenue of $24.2bn in the quarter.

Earlier this week, Google owner Alphabet and Microsoft reported earnings that had failed to ignite a further round of buying on stock markets. Google shares had fallen since Tuesday night's earnings report which had disappointed some investors for its growth in ad revenues, while Microsoft shares were little changed in recent days, despite it beating expectations for second-quarter revenues.

Many watchers worry about the growing risks that the so-called "Magnificent 7" group of tech giants, which includes Apple, Meta, Microsoft, Amazon, and Alphabet's Google, have been propelled too high by the hype surrounding the prospects of AI. Google employs 4,800 people across Ireland, and Microsoft has 3,500 people here.