Apple, the world’s largest firm by market capitalisation, led the way as the trio posted a combined $125bn of sales. It beat revenue and earnings expectations but unit sales fell.
Amazon smashed expectations with founder Jeff Bezos hailing the firm’s Alexa technology, while Google-owner Alphabet missed projections.
Shares in Apple rose over three per cent in volatile after-hours trading, leaving it in pole position with a stock market valuation of approximately $875bn. Before global investors digested the news, Alphabet’s stock dipped 2.5 per cent, valuing the firm at around $795bn. Amazon saw its stock jump over six per cent, leaving its market value in the region of $710bn.
Apple revenue and earnings beat Wall Street forecasts. Revenue was $88.3bn compared with expectations of $87.3bn. Fourth quarterly earnings were $3.89 per share, beating $3.86 predicted by analysts. However, unit sales fell and missed guidance. Apple flogged 77.3m phones during the final three months of the year compared with an expected 80m units.
“If Apple is able to deliver another quarter of robust iPhone sales, it might very well be the first company to reach a $1 trillion valuation,” said WPP Mindshare’s Norm Johnston.
“What most analysts will scrutinise is whether Apple has been able to sell enough $1,000 iPhone X’s given the device’s hefty price tag. The answer was an emphatic yes.”
Alphabet disappointed on its bottom line, posting earnings per share of $9.70 compared with consensus expectations of $9.98. Fourth-quarter revenue of $32.3bn – up 24 per cent on the same period last year – beat market projections of $31.86bn, however.
The firm’s advertising metrics beat Wall Street expectations – aggregate paid clicks rose 43 per cent year-on-year, compared with projections of 42.1 per cent. At $6.45bn the costs represent 24 per cent of Google’s advertising revenues. Forrester analyst Collin Colburn said Google appeared to be struggling to compete with Amazon on retail searches, instead relying on tie-ups with retailers like Wal-Mart.
Amazon fourth-quarter revenue was $60.5bn compared with a Thomson Reuters poll of $59.8bn. Earnings per share were $3.75 versus a forecasted $1.85. Sales were 38 per cent higher year-on-year and led to net income more than doubling to $1.9bn.
Bezos, the world’s richest man, gushed at returns from the company’s Alexa voice activity technology. Projections, he said, “were very optimistic, and we far exceeded them.”
“We don’t see positive surprises of this magnitude very often – expect us to double down,” he added.
AJ Bell investment director Russ Mould said: “Amazon looks to have the strongest momentum of the three right now but it’s not going to be all plain sailing on the way to the $1 trillion market cap mark and some issues could still make it hard for all three to get there, assuming they ever do.”
Meanwhile, US President Donald Trump’s controversial tax reforms had “muddied the waters”, Mould added.
Alphabet took a one-time expense of $9.9bn in the fourth quarter, while Amazon’s earnings included a tax benefit of around $789m. Apple is likely to benefit most from the tax changes, expecting a tax rate of 15 per cent in the next quarter compared with projections of 25.5 per cent.