Business Highlights: Apple’s sales dip, tech stock rally
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Apple suffers 1st quarterly sales decline in nearly 4 years
CUPERTINO, Calif. (AP) — Apple has posted its first quarterly revenue drop in nearly four years. It suffered from pandemic-driven restrictions on its China factories that curtailed sales of the latest iPhone during the holiday season. The company’s sales of $117.15 billion for the October-December period represented a 5% decline from the same time in the previous year, a deeper downturn than analysts had projected. It marks Apple’s first year-over-year decrease in quarterly revenue since the January-March period in 2019. The company’s profit also tumbled by 13% from the previous year, a steeper slide than analysts anticipated. Apple’s stock fell nearly 5% in extended trading.
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Alphabet posts lower Q4 profit amid ad squeeze, competition
MOUNTAIN VIEW, Calif. (AP) — Google parent company Alphabet has posted lower profit and a small revenue increase for last year’s fourth quarter. A decline in online ad spending and competition from rivals are weighing on the search giant. Alphabet’s profit declined 34% in the October-December quarter, while revenue grew only 1%. But while overall revenue grew, advertising revenue fell by nearly 4% and revenue at YouTube declined 8% year-over-year. This appeared to spook investors, who sent the company’s stock lower in after-hours trading.
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Amazon beats Q4 revenue estimates, but profits slump
NEW York (AP) — Amazon reported worse-than-expected profits, but its revenue beat expectations boosted by sales in its cloud-computing unit AWS. Amazon said it made $300 million in profits, or 3 cents per share, well below the $2.03 billion analysts surveyed by FactSet had been expecting. The company said its profits were dented by a $2.3 billion write-down of the value of its stock investment in electric vehicle start-up Rivian Automotive. Shares in Amazon.com Inc. fell 7% in after-hours trading. The earnings report closes a rough 2022 for Amazon, when it lost nearly half of its value amid a broader sell-off of tech shares tied to rising inflation, interest rates and concerns about the wider economy.
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Ford 4Q profit drops 90%, company says more cost cuts coming
DETROIT (AP) — Ford says its fourth-quarter net income fell 90% from a year earlier. That led company officials to say Thursday that the automaker’s costs are too high and to pledge more belt-tightening this year. CEO Jim Farley said in a statement that Ford should have done better last year, and it left $2 billion in profits on the table. He said Ford will correct that with improved execution this year. Chief Financial Officer John Lawler told reporters the global shortage of computer chips and other parts hit Ford hard at the end of last year, costing it production of roughly 100,000 vehicles. He would not rule out further white-collar layoffs. Ford said it made $1.26 billion from October through December.
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Starbucks misses sales, revenue estimates as China falters
SEATTLE (AP) — Starbucks reported lower-than-expected sales in its fiscal first quarter, hurt by COVID restrictions in China and lower consumer demand in other markets. Global same-store sales, or sales at stores open at least a year, were up 5% in the October-December period, but that was partly due to higher prices. Store transactions were down 2%. Starbucks fell short of Wall Street’s forecast for same-store sales, according to analysts polled by FactSet. Starbucks said its revenue rose 8% to a record $8.7 billion, but that also fell short of analysts’ expectations.
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Wall Street piles more onto big start to year as tech surges
NEW YORK (AP) — Wall Street’s bang to start the year got even bigger, as tech stocks and a surge for Facebook’s parent company led the market higher. The S&P 500 rallied 1.5% Thursday, a day after hitting its highest level since August. The Nasdaq composite soared by more than double that, while the Dow Jones Industrial Average lagged because it has less of an emphasis on tech. Stocks have jumped this year on hopes that the Federal Reserve may soon pause on raising interest rates. The next big milestone for the market is Friday morning’s jobs report, which economists expect will show a slowdown in hiring.
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Biden’s top economic aide leaving White House
WASHINGTON (AP) — President Joe Biden’s top economic adviser, Brian Deese, is leaving his post. Biden says in a statement that Deese will step down as director of the White House National Economic Council. That position had him coordinating policy across the government. He also negotiated with Congress on coronavirus aid, the budget, infrastructure, the tax code, clean energy incentives, investments in computer chip plants and other measures that the president counts as key victories.
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US filings for jobless aid lowest since April
WASHINGTON (AP) — U.S. applications for jobless aid fell again last week to their lowest level since April, further evidence that the job market has withstood aggressive rate hikes by the Federal Reserve as it attempts to cool the economy and bring down inflation. Applications for jobless aid in the U.S. for the week ending Jan. 28 fell by 3,000 last week to 183,000, from 186,000 the previous week, the Labor Department reported Thursday. It was the third straight week claims were under 200,000 and the third straight weekly decline. Jobless claims generally serve as a proxy for layoffs.
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European Central Bank hikes rates, vows ‘we are not done’
FRANKFURT, Germany (AP) — The European Central Bank has hiked interest rates by another half-point and vows a similar hike at its next meeting. ECB President Christine Lagarde said Thursday that even beyond an intended hike in March, “we know that we are not done.” The bank is aggressively raising rates to fight inflation that has slowed but is still way too high at 8.5% annually. The ECB got a later start in raising rates than the U.S. Federal Reserve and as a result is now moving faster. The Fed hiked interest rates by a quarter-point Wednesday, while the Bank of England went bigger with a half-point hike Thursday.
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The S&P 500 rose 60.55 points, or 1.5%, to 4,179.76. The Dow Jones Industrial Average lost 39.02 points, or 0.1%, to 34,053.94. The Nasdaq composite jumped 384.50 points, or 3.3%, to 12,200.82. The Russell 2000 index of smaller companies tacked on 40.41 points, or 2.1%, to 2,001.22.