Amazon, Apple, and Intel Frown Over 'Dark Shadows' Including China's Lockdown (Comprehensive)

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] In addition to the prolonged high inflation and supply chain issues, the impact of China's COVID-19 lockdowns and the Ukraine crisis have darkened the earnings outlook for global companies such as Apple, Amazon, and Intel.

On the 28th (local time), Apple announced that its fiscal second-quarter (January to March) revenue increased by 9% year-on-year to $97.28 billion, but stated that the impact of China's COVID-19 lockdown measures would be reflected in the results for April to June. The estimated revenue loss is expected to range between $4 billion and $8 billion.

Apple Chief Financial Officer (CFO) Luca Maestri said that the lockdown in China not only affects demand but also "supply constraints caused by COVID-19 related disruptions and a shortage of silicon across the industry will impact our production capacity to meet consumer demand." Following the earnings announcement, Apple's stock price rose in after-hours trading but fell after the disclosure of losses related to the China lockdown.

Amazon announced its first-quarter (January to March) earnings on the same day, reporting revenue of $116.44 billion (approximately 147.96 trillion KRW), a 7% increase compared to the same period last year. This represents the slowest quarterly growth since the dot-com crash in 2001. Amazon also posted a first-quarter loss for the first time since 2015.

Amazon CEO Andy Jassy stated, "The pandemic and the Ukraine war have brought abnormal growth and challenges," adding that the company is focusing on offsetting network costs. He also noted that rising inflation and supply chain pressures are having an impact.

Amazon's outlook is also not optimistic. Second-quarter revenue is expected to be between $116 billion and $121 billion, falling short of market expectations of $125 billion. Growth is projected to slow further to between 3% and 7%, compared to the first quarter. Consequently, Amazon's stock price fell more than 10% in after-hours trading following the earnings announcement.

U.S. semiconductor company Intel faced disappointing results due to decreased PC demand from January to March this year. Intel reported that its fiscal second-quarter (December 26 last year to April 2 this year) revenue was $18.35 billion (approximately 23.4 trillion KRW), a 7% decrease year-on-year. This figure fell short of the market expectation of $18.5 billion. Intel noted significant uncertainties due to Russia's airstrikes in Ukraine and China's COVID-19 lockdown measures, stating that prolonged lockdowns in China could impact its performance.

Intel CEO Pat Gelsinger predicted that the semiconductor supply shortage will last longer than initially expected, continuing through 2024. This extends the forecast by one year compared to the outlook released in July last year. He said, "The shortage of semiconductor manufacturing equipment is negatively affecting efforts across the industry to increase supply through expanded production capacity, causing supply-side issues."

This content was produced with the assistance of AI translation services.