Apple and Amazon Report Consecutive Earnings Surprises (Comprehensive)

After-hours trading stock prices diverge
Poor sales cause Apple to drop 2%
Amazon rises 8% with strong Q3 outlook

Apple, the company with the largest market capitalization, and Amazon, the world's largest e-commerce company, both recorded earnings surprises that exceeded expectations on the 3rd (local time). However, in Apple's case, product sales revenue was weak, and with forecasts of poor performance in the next quarter, the stock price movement in after-hours trading has been mixed.

Apple announced after the New York Stock Exchange closed that its earnings per share for the second quarter (third quarter of the fiscal year) were $1.26. This far exceeded the Refinitiv consensus estimate of $1.19. Quarterly revenue was $81.8 billion, down 1% year-over-year, but still above Wall Street's forecast of $81.69 billion.

This strong performance is attributed to the services segment, which recorded revenue of $21.2 billion, up 8.2% year-over-year. Apple CEO Tim Cook explained, "Revenue growth was driven by over 1 billion paid service subscriptions."

However, total revenue declined 1% year-over-year, marking the third consecutive quarter of decline. The decrease was largely due to reduced product sales. Specifically, iPhone revenue fell 2% year-over-year to $39.67 billion, Mac revenue dropped 7% to $6.84 billion, and iPad revenue decreased by as much as 20% to $5.79 billion.

The outlook for the third quarter is also bleak. Apple CFO Luca Maestri stated during the conference call that third-quarter results are expected to remain at a similar level to this quarter.

Despite the earnings beating expectations, weak product sales revenue and uncertain outlook have caused Apple's stock to trade down about 2% in after-hours trading. Apple also closed the regular session down 0.73%.

On the same day, Amazon reported second-quarter revenue that increased 11% year-over-year. Amazon's second-quarter revenue was $134.4 billion, with earnings per share of $0.65. This also exceeded Wall Street estimates ($131.45 billion, $0.35). Amazon Web Services, the cloud computing division, recorded revenue of $22.1 billion. The advertising segment also earned $10.7 billion, surpassing market expectations.

Notably, Amazon also provided a third-quarter outlook that exceeded initial expectations. The third-quarter revenue forecast ranges from $138 billion to $143 billion. Amazon's stock is currently trading more than 8% higher in after-hours trading. Amazon closed the regular session up 0.55%.

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