Amazon and Apple released the latest financial reports that technology giants such as Amazon and Apple are troubled by global supply chain issues. The earnings results of the two companies announced on Thursday were lower than Wall Street analysts expected. They suggested that problems in the supply chain may put stress on the quarter’s performance.
Amazon’s third-quarter revenue and profits were lower than Wall Street analysts expected, which is rare for Amazon. Amazon’s third-quarter financial report showed that the quarter’s revenue was 110.8 billion U.S. dollars, an increase of 15% over the same period last year, but it was lower than the analyst’s average expectation of 111.6 billion U.S. dollars. Net profit for the quarter fell 50% from the same period last year to US$3.2 billion, far below analysts’ expectations of US$4.6 billion.
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Amazon CEO Andy Jassy said in a statement that in the current fourth quarter, the company’s consumer business is expected to incur billions of dollars in additional costs. He said that these costs are mainly “to deal with labor shortages, rising wage costs, global supply chain issues, and rising freight and transportation costs. Every effort is being made to minimize the impact of these unfavorable factors on customers and sales partners.”
Apple’s fourth-quarter revenue was US$83.4 billion, slightly lower than analysts’ average estimate of US$84.85 billion. iPhone sales revenue was also lower than analysts expected, at 38.9 billion U.S. dollars. After the earnings report was announced, Apple CEO Tim Cook emphasized on the earnings call that despite supply constraints, Apple’s fourth-quarter revenue still hit a new high.
He said, “Demand is very strong.” At the same time. Cook also pointed out that it is facing “exceeding expected supply constraints”, among which, chip shortages and “related manufacturing disruptions” have had a negative impact of US$6 billion on the company’s business.
In after-hours trading on Thursday, Amazon shares fell 4% and Apple shares fell more than 3%. In recent months, supply chain disruptions and human resource shortages have hit many industries. Many retailers, manufacturers, and economists have warned that restrictions on the global supply chain will not only lead to decreased discounts during the holiday shopping season this year but also lead to a shortage of products on the shelves.
Over the years, Apple has set a complex supply chain for its various hardware products, and Amazon has also created a superior logistics and distribution business system. For both companies, supply issues have also been dragged into a critical period. The current season is a crucial holiday shopping season for Amazon; and for Apple, it is about the release and sales of new products including the iPhone 13 series of smartphones.
Amazon has previously warned that business growth in the second half of 2021 may slow down compared to last year, as more consumers return to physical stores to shop. Amazon currently predicts that growth in the fourth quarter of this year will be much slower than in the past.
Apple’s chief financial officer Luca Maestri said on Thursday’s earnings call that “considering the ongoing global uncertainty in the short term,” Apple refused to make any adjustments to the current quarter’s revenue. predict. He said, “We estimate that in the December quarter, the impact of supply constraints will be even greater. Despite this challenge, our products still have high market demand.”
