Amazon and Apple posted better-than-expected sales, reassuring investors that the tech giant would be able to weather the slowdown in global economies.
Amazon predicted in a trading update that higher fees for its Prime membership would boost its bottom line, while Apple said demand for its all-important iPhone remains strong.
Both the firms said that despite the sharp rise in prices, they are making progress in controlling the running costs. Shares sent the update rose. Apple and Amazon’s quarterly updates are seen as an indicator of how customers react to the economic environment.
On Thursday, official data showed the US economy shrank for the second quarter in a row, a milestone that would be considered an economic slowdown in many countries, but not in the US, which uses additional data to make that call.
“Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment,” said Apple’s chief operating officer Luca Maestri, adding the company expected growth to pick up again in the months ahead.
However, both companies have seen sales growth slow from last year and profits fall.
Apple’s profits dropped almost 11% from a year ago to $19.4bn (£15.9bn) as it wrestled with Covid-19 lockdowns in China. In comparison, Amazon lost $2bn, hit by changes to the value of its investment in electric carmaker Rivian Automotive.
Apple boss Tim Cook said the company saw a “mixed bag” of economic signals, with iPhone demand holding steady but areas like digital advertising slipping.
Overall, sales of Apple products and services rose 2% between April and June to $83bn annually. Sales of iPhones continued to power the company’s gains as supply constraints held back sales of other products.
Its services business, which includes Apple Pay and its streaming music and television services, also grew 12%.
Meanwhile, Amazon said its revenues were up 7% to $121.2bn, despite its e-commerce business being hit in recent months. Online sales shrank 4% in the second quarter of decline.
But the company continues to be shielded by the strength of its clouding computing division, AWS, which saw sales soar by 33%.
In spring Amazon spooked investors as its online sales softened, and it warned it had spent too heavily to hire and add warehouses in a bet that pandemic-era shopping patterns would continue.
But it provided a more optimistic outlook this time.