Apple, Amazon, Meta: What to Expect from Earnings

Amazon
Web
Services
(AWS)
growth:
this
seemed
like
it
bottomed
last
quarter
and
started
to
improve.
Similar
trends
were
seen
at
Microsoft
for
Azure.
We’re
expecting
a
good
performance
here.

Advertising
growth:
advertising
has
been
a
bright
spot,
and
we
expect
it
to
remain
robust.
We
will
be
watching
for
relative
growth
versus
Alphabet and
Meta
Platforms.

E-commerce
in
general:
we
will
be
interested
in
consumer
behaviour
(trading
down,
more
staples,
etc)
to
get
signals
as
to
what
other
companies
might
be
looking
for
in
the
broader
macro
environment
in
the
first
half
of
2024.

Profitability:
a
year’s
worth
of
restructuring
has
already
started
to
bear
fruit,
as
profitability
was
strong
in
the
third
quarter.
We’re
expecting
more
of
the
same
for
the
fourth.

Earnings
outlook: Amazon
guides
one
quarter
at
a
time,
and
only
on
the
revenue
and
operating
profit
lines.
We’re
expecting
guidance
to
be
mostly
in
line
for
revenue
and
a
little
better
for
profitability.

Read
the
full
original
article
on
Morningstar.com

What
to
Watch
for
in
Apple’s
Earnings

William
Kerwin

New
iPhone
15:
the
main
focus
of
Apple’s
earnings
report
will
be
iPhone
sales,
which
are
the
primary
driver
of
the
firm’s
results.
We’re
expecting
typical
seasonal
strength
for
the
December
quarter,
given
the
launch
of
the
iPhone
15
lineup.

Apple
Watch
Sales:
we
are
also
looking
for
commentary
on
Apple
Watch
sales,
given
the
company’s
ongoing
patent
dispute
with
Masimo,
which
provides
the
oximeter
for
the
Watch.
We
expect
the
impact
on
sales
to
be
minimal,
both
in
the
quarter
and
over
the
long
term.

Vision
Pro:
finally,
we’re
hoping
to
hear
further
commentary
on
the
launch
of
the
Vision
Pro,
Apple’s
new
augmented
reality
headset,
which
is
slated
for
February
2.
We
don’t
expect
significant
sales
in
its
first
year,
but
forecast
a
rapid
ramp-up
over
the
next
five
years.

Read
the
full
original
article
on
Morningstar.com

What
to
Watch
For
in
Meta’s
Earnings

Ali
Mogharabi

The
194%
jump
in
Meta’s
stock
in
2023
was
due
to
user
growth,
engagement,
and
monetization
with
a
leaner
operation.

We
look
for
further
improvement
in
revenue
generated
from
Reels.
It
keeps
attracting
more
advertisers,
and
its
impact
on
Meta’s
advertising
revenue
is
likely
positive
after
being
neutral
last
quarter
and
negative
in
the
past.

We
expect
further
improvement
in
Meta’s
data
analytics,
campaign
planning,
and
measurement
tools
using
artificial
intelligence.

Some
data
indicates
that
ad
prices
have
increased
from
last
year,
including
for
social
media,
which
bodes
well.
However,
we
do
see
revenue
growth
deceleration
in
2024
as
the
transition
from
traditional
to
digital
is
nearly
complete.
In
addition,
Morningstar
has
projected
a
slowdown
in
U.S.
economic
growth
in
2024.

While
headcount
is
expected
to
grow,
we
see
a
slowdown
in
hiring
as
the
firm
is
focusing
on
making
individuals
more
efficient
and
productive.
We
expect
further
indications
of
cost
controls
remaining
intact.

Read
the
full
original
article
on
Morningstar.com

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