There have been some disappointing financial results this week reported in the technology sector, with even Apple managing to amaze its fans and surprise investors by missing expectations.
However, there’s no need for panic that this is the start of a downwards spiral for the firm, since losing chief executive Steve Jobs late 2011.
Apple still managed a profit of $8.8bn in Q2, up 21 per cent from a year earlier, while sales came in at $35bn, up from $28.6bn in 2011. And I’d be willing to put a sizeable bet on the iPhone 5 leading to a rapid switch around between Samsung, which claimed the top smartphone seller spot for the second quarter, and Apple, as the new device helps it climb back to the top of the pile as fans rush to upgrade.
Amazon, though, did disappoint with its results, posting profit of only $7m on revenues of $12.8bn, which could create jitters among investors over the firm’s long-term prospects if it fails to convert sales into earnings.
Unlike Apple, who can expect a turnaround for its next quarter with its next shiny device, the outlook for Amazon is not so rosy as it will face stiff competition for its Fire tablet in its third quarter to wrench sales away from Google, which has recently released its sell-out Nexus 7 Android tablet.
But the most anticipated results came with Facebook posting its first set of results on Thursday since the firm went public in May. And the first showing wasn’t good, revealing a net loss of $157m for the quarter, although Facebook dismissed this as investor payouts.
The stock market reacted badly to the news, sending its share price plummeting by almost 10 per cent to a low of $26.84 by the end of Thursday official trading. In after-hours trading, shares dipped further to $23.94. Compare this to the $38 Facebook shares were initially trading at back in May.
Still, Facebook was positive about its position, insisting there was more money to be made from social and mobile adverts.
The firm certainly has a big enough pool of users to dip into. According to its own figures, 955 million of us use Facebook on a regular basis, while the number of mobile users grew by 67 per cent. The problem is, newer sites like Twitter are overtaking Facebook when it comes to user popularity, as its subscribers get turned off by its underhand privacy tactics.
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