On February 1st local time, the US stock market opened high and rose, with the three major indexes collectively closing higher. As of the close, the Nasdaq rose 1.3%, the S&P 500 index rose 1.25%, and the Dow rose 0.97%, setting a new historical closing high.
Large technology stocks generally rose, with Amazon and Nvidia rising more than 2%, Meta, Apple, and Microsoft rising more than 1%, and Tesla, Google, and Netflix slightly rising. Ferrari rose over 12%, its stock price reached a historic high, and its market value exceeded $70 billion, surpassing BMW. The New York Community Bank fell more than 11%, and the stock fell more than 37% yesterday.
After the closing, Meta, Amazon, and Apple released their latest financial reports.
Apple's first quarter revenue exceeded expectations, but revenue in Greater China was lower than expected
On February 1st local time, technology giant Apple released its Q1 2024 financial report (i.e. Q4 2023 performance).
The financial report shows that Apple's quarterly revenue was $119.58 billion, higher than analyst expectations of $117.97 billion, returning to year-on-year growth. In the first quarter, iPhone revenue was $69.7 billion, higher than the expected $68.55 billion.
Apple's first quarter service revenue was $23.12 billion, with analysts expecting $23.37 billion; Earnings per share of $2.18, analyst expectation of $2.11; Mac revenue is $7.78 billion, with analysts expecting $7.9 billion; IPad revenue is $7.02 billion, with analysts expecting $7.06 billion; Wearable devices, home furnishings, and accessories revenue is $11.95 billion, with analysts expecting $12.02 billion.
Apple Financial Report
Apple's first quarter revenue in Greater China was $20.82 billion, with analysts expecting $23.5 billion. Apple stated that it has achieved sales growth in all regions except Greater China, while sales in Greater China have decreased by nearly 13% compared to the same period last year.
The sales of iPhone were slightly lower than the revised Wall Street expectations, increasing by nearly 6% to $69.7 billion, which is a positive signal for the iPhone 15 model released in September. This is Apple's first full quarter to include revenue from iPhone 15.
Apple's profitable services business grew by 11% in the quarter, with revenue reaching $23.11 billion, but still slightly below expectations. Investors are closely monitoring the growth of Apple's services business, which includes subscription services such as Apple Music, warranty, search license revenue, and payment revenue from Apple Pay and Apple advertising.
Apple stated that there are currently 2.2 billion active devices in use, and many analysts believe that this indicator provides important information for predicting Apple's service growth. Compared to the 2 billion active devices in the same period last year, this number has increased.
Mac's sales increased by less than 1% in the quarter, reaching $7.7 billion, in line with expectations. For this product line, this is a significant recovery as its sales decreased by nearly 34% year-on-year in the quarter ending in September.
IPad sales continued to decline, with quarterly sales dropping by 25% to $7.02 billion, slightly lower than Wall Street's expectations. In 2023, Apple did not release a new iPad model for the first time.
Cook said that the performance of the iPad "did not surprise us.". Cook said, "If you remember, the iPad faced a very difficult comparison in this quarter a year ago when we launched the iPad Pro and the tenth generation iPad."
Apple's wearable device business (sometimes referred to as "other products") includes AirPods headphones and Apple Watch. Although its sales exceeded Wall Street's expectations, it also experienced a difficult quarter, falling 11% year-on-year to $11.95 billion. The latest Apple Watch was taken off the Apple Store for a few days in December due to a patent dispute with medical device company Masimo.
Apple stated that it spent nearly $27 billion on dividends and stock repurchases during the quarter.
Apple CEO Cook said that Apple will announce new artificial intelligence features this year.
As of the close on February 1st local time, Apple was trading at $186.86, up 1.33%, with a market value of $2.9 trillion. After the financial report was released, Apple fell more than 2% after hours.
Facebook's parent company, Meta Platforms, released its financial report after hours on February 1st local time. Benefiting from the continued strength of the digital advertising market, the company's Q4 performance and Q1 guidance generally exceeded expectations, especially with a higher than expected number of active users in the Q4.
The financial report shows that Meta's revenue for the fourth quarter was $40.11 billion, higher than analyst expectations of $39.01 billion. Among them, advertising revenue was 38.71 billion US dollars, higher than the analyst's expected 37.81 billion US dollars; The revenue of the APP family was 49.04 billion US dollars, higher than analyst expectations of 38.16 billion US dollars; Reality Labs revenue was $1.07 billion, higher than analyst expectations of $812.6 million.
The fourth quarter EPS was $5.33, higher than analyst expectations of $4.91. The operating profit of the APP family was 21.03 billion US dollars, higher than analyst expectations of 19.65 billion US dollars; The operating loss of the reality laboratory was $4.65 billion, which was lower than the analyst's expected loss of $4.1 billion.
Meanwhile, Meta's daily active users in the fourth quarter reached 2.11 billion, higher than analyst expectations of 2.07 billion; The monthly active users in the fourth quarter were 3.07 billion, higher than the analyst's expectation of 3.06 billion.
Meta Financial Report
Meta stated that as of December 31, 2023, the company had completed its layoff plan launched in 2022. As of December 31, 2023, Meta reported that the number of employees was 67317, a decrease of 22% year-on-year after layoffs.
Meta has been investing record breaking amounts in developing artificial intelligence technology, including expanding its core advertising business by improving advertising positioning and AI recommendation content, as well as the necessary infrastructure for operation. At the same time, it has not given up on its efforts to build a virtual reality metaverse. Zuckerberg attributed the accelerated growth of advertising business to the advancement of artificial intelligence.
Meta also made its first-ever dividend payout, paying a cash dividend of $0.50 per share. The company announced an increase of $50 billion in stock repurchases.
Meta CFO Susan Li stated that the significant increase in revenue in the fourth quarter was due to high expenses from Chinese advertisers and video content recommended by artificial intelligence. The daily viewing time of the company's applications increased by 25% compared to the same period last year. During a earnings conference call, Susan Li stated that in 2023, revenue from Chinese advertisers accounted for 10% of Meta's total revenue, contributing 5 percentage points to global revenue growth.
In her previous financial report, Susan Li also emphasized the importance of business from China. Although she did not name specific companies, rapidly growing emerging companies from China, Temu and Shein, have been investing heavily in advertising on Facebook and Instagram.
As of the close on February 1st local time, Meta was at $394.78, up 1.19%, with a market value of $1.0 trillion. After the financial report was released, Meta rose more than 14% after hours.
Amazon's Q4 and Q1 performance guidance was better than expected, with an increase of nearly 8% after hours
Amazon released its fourth quarter financial report after hours on February 1st local time, showing that the quarterly and first quarter performance guidance was roughly better than expected.
The financial report shows that Amazon's net revenue in the fourth quarter was $169.96 billion, a year-on-year increase of 14%, higher than analysts' expectations of $166.21 billion; The operating profit was 13.21 billion US dollars, higher than the analyst's expected 10.49 billion US dollars. Earnings per share were $1.00, higher than analyst expectations of $0.78.
Among them, the net sales in North America in the fourth quarter were $105.51 billion, with analysts expecting $102.88 billion; Net sales of physical stores reached 5.15 billion US dollars, with analysts expecting 5.23 billion US dollars; AWS net sales of $24.2 billion, with analysts expecting $24.22 billion; Excluding foreign exchange factors, AWS net sales increased by 13%, with analysts expecting a growth of 11.8%.
For the first quarter, Amazon expects a net revenue of $138-143.5 billion, while analysts expect $142.1 billion. Expected operating profit for the first quarter is 8-12 billion US dollars, with analysts expecting 9.12 billion US dollars.
Amazon easily exceeded Wall Street's earnings expectations, indicating that CEO Andy Jesse's efforts to control costs are paying off. Compared to $278 million (3 cents per share) a year ago, net income surged to $10.6 billion, or $1.00 per share.
Amazon laid off 27000 employees between the end of 2022 and mid-2023, and has been searching for ways to cut expenses in other areas, such as its fulfillment business. In January of this year, the company announced layoffs in departments such as Prime Video, MGM Studios, and Twitch. Amazon's CFO Brian Olsavski stated that the company will continue to approach new investments with caution, but does not consider 2024 to be a "year of efficiency.".
"We will continue to invest in new things, new fields, and things that resonate with our customers. We will also do the same in places that can improve efficiency and do more with less money," said Olsavsky
In the fourth quarter, revenue jumped by 14% to $170 billion. This period reflects the performance of the holiday shopping season and Amazon's Prime Member Day event in October, both of which Amazon stated exceeded expectations.
"This fourth quarter has set a record for the holiday shopping season, marking a successful end to Amazon's strong 2023. As we enter 2024, our team is rapidly delivering results, and there are many exciting things ahead of us," said Jassy in a statement
The sales of Amazon Web Services climbed 13% to $24.2 billion in the fourth quarter, in line with Wall Street's expectations. In the past year, AWS's growth has slowed down due to companies reducing cloud spending.
Prior to Thursday's earnings report, Amazon announced the launch of a generative AI shopping assistant called Rufus, which is currently being tested among a small group of users in the United States.
Amazon's profitable advertising division saw a year-on-year increase of 27% in sales to $14.7 billion. Last month, the company began displaying advertisements on Prime Video content, and analysts expect this move to bring a significant amount of new revenue to the company. Olsavski stated that the company saw "great enthusiasm" from advertisers, but Amazon plans to maintain a lower advertising load.
As of the close on February 1st local time, Amazon reported a price of $159.28, an increase of 2.63%, with a market value of $1.6 trillion. Amazon's US stock market rose nearly 8% after hours.
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