Apple, Meta, Amazon Q4, Amer Sports Raises $1.37 Billion in IPO
No Change in interest rates, $78 Billion Tax Bill
Apple reported its first sales growth in a year, revenue for the quarter ending Dec. 30 was $119.58 billion, surpassing the expected $117.91 billion with earnings per share of $2.18 compared to the expected $2.10.
Net income for the quarter was $33.92 billion, up 13% from the same period last year.
IPhone sales grew from $65.7 billion to $69.7 billion in the last quarter of 2023.
Apple reported having 2.2 billion active devices in use, up from 2 billion at the same time last year.
Mac's revenue was $7.78 billion, meeting the expected $7.73 billion.
iPad revenue fell short at $7.02 billion, compared to the expected $7.33 billion.
Other Products revenue, including wearables and accessories, was $11.95 billion, surpassing the expected $11.56 billion.
Services revenue reached $23.12 billion, slightly below the expected $23.35 billion. Apple's gross margin was 45.9%, exceeding the expected 45.3%. The company spent nearly $27 billion on dividends and share repurchases during the quarter.
Sales growth was reported in all regions except for China, which fell nearly 13% from the same time last year.
Amazon Fourth-Quarter
Amazon reported stellar results for the fourth quarter of 2023 with revenue growing by 14% to $170.0 billion and net income of $10.6 billion, or $1.00 per diluted share, surpassing projections of $8.59 billion or 83 cents per share.
The 11-day Black Friday and Cyber Monday sales event proved to be a significant contributor to Amazon's success, with over 1 billion items purchased on the platform.
The company achieved record-breaking delivery speeds for Prime members globally, delivering more than 7 billion units the same or the next day.
North American sales for the quarter reached $105.5 billion, a 13% increase, while international sales grew by 13% as well, totaling $40.2 billion.
AWS, the cloud and computing segment, experienced a 13% increase in sales, reaching $24.2 billion.
Amazon shares responded positively to the impressive results, rising by 9.5% to $174.34 in after-hours trading.
Advertising revenue reached $14.7 billion, 27% year-over-year growth. Amazon provided a strong outlook for Q1 2024, forecasting net sales between $138.0 billion and $143.5 billion, with an operating income range of $8.0 billion to $12.0 billion.
Additionally, Amazon introduced Rufus, an AI shopping assistant, designed to assist customers with questions, recommendations, and product discovery.
Meta's Q4 Performance
Meta Platforms reported a profit exceeding $14 billion for the fourth quarter ending December 2023, showcasing a growth of over 200% compared to the same period the previous year. Sales for the quarter reached over $40 billion, reflecting a substantial 25% increase year-over-year.
For the full year of 2023, Meta Platforms reported a revenue of $134.90 billion, and a 69% year-over-year increase in profits, amounting to $39 billion.
The company announced its first-ever cash dividend over-allotment share, payable on March 26 to shareholders of record as of February 22, along with a $50 billion share buyback plan.
Meta plans significant investment in artificial intelligence (AI) in 2024, with expected capital expenditures between $30 billion and $37 billion, driven by AI and non-AI servers, in data centers, and new data center construction.
Meta reported more than $16 billion in losses for its Reality Labs unit in 2023, with anticipation of increased operating losses in the coming year.
Daily active users on Facebook grew by 6% year-over-year to more than 2.1 billion. Threads, Meta's rival to Twitter, reached 130 million monthly active users.
No Change in interest rates
The Federal Reserve, in a recent statement following its two-day meeting, indicated a pause in interest rate hikes but clarified it's not ready to cut rates yet.
Chairman Jerome Powell, during a subsequent news conference, emphasized that although the Fed does not foresee more rate hikes, a reduction in the target range would only be considered once there's increased confidence in inflation sustainably approaching the 2% goal, downplaying the likelihood of a rate cut in March.
Amer Sports Raises $1.37 Billion in U.S. IPO
Amer Sports, the owner of prominent brands like Arc'teryx, Wilson, and Salomon, successfully secured approximately $1.37 billion in a U.S. initial public offering (IPO).
The company, recognized for its Wilson tennis rackets, sold 105 million shares at $13 each, deviating from its expected range of $16 to $18. Additionally, an over-allotment option for up to 15.75 million additional shares was granted.
Founded in 1950 in Finland, Amer Sports underwent a significant development in 2019 when a Chinese consortium led by Anta Sports Products acquired it for about $5 billion. Despite a net loss of around $115.6 million and $3.05 billion in revenue for the nine months ending September, Amer Sports is trading on the New York Stock Exchange.
FCC Takes Action Against AI-Generated Robocalls
The Federal Communications Commission (FCC) has announced plans to outlaw AI-generated robocalls, particularly those exploiting voice cloning technology.
Following a recent incident where an AI voice resembling President Joe Biden was used in a robocall targeting New Hampshire voters, the FCC aims to designate such practices as illegal under the Telephone Consumer Protection Act (TCPA).
The proposed move seeks to curb misinformation by addressing the misuse of AI voices imitating celebrities, politicians, and family members, a trend that has seen a significant rise in recent months.
$78 Billion Tax Bill
The House of Representatives has passed a $78 billion bipartisan tax bill. Named the "Tax Relief for American Families and Workers Act," the legislation cleared the House with a bipartisan majority, securing a 357-70 vote.
The bipartisan tax bill aims to enhance the child tax credit by raising the maximum credit per child from $1,600 to $2,000 through 2025, adjusting for inflation in 2024 and 2025.
The tax bill restores the provision enabling businesses to annually deduct research and development costs rather than over a five-year period.
The legislation restores the ability for businesses to immediately deduct 100% of their investment in machinery and equipment, encouraging new manufacturing in the United States.
Tightened limits on the deductibility of interest expenses are relaxed, especially beneficial for companies with high levels of debt.
Adidas Yeezy Sneakers
Adidas plans to sell the remaining stock of Yeezy sneakers from its terminated partnership with Kanye West at a cost equivalent to production expenses. The decision follows Adidas severing ties with Kanye West in 2022 after he made antisemitic comments.
Adidas plans to sell its remaining Yeezy footwear inventory, valued at $324 million (€300 million), at the cost to mitigate losses, aiming to generate around $270 million.
In 2023, Adidas reported net sales of $23.1 billion, and operating profit of $289 million (€268 million), a notable decline from $772 million in 2022 but surpassing its earlier forecasted loss of $108 million.
Byju's U.S. Arm of Files for Chapter 11 Bankruptcy
Byju's Alpha Inc., the American arm of Indian edtech giant Byju's, has filed for Chapter 11 bankruptcy in the U.S. Court of Delaware. The filing comes as the company grapples with a $1.2 billion debt, leading to a court-appointed agent taking control of the shell company.
The bankruptcy petition disclosed that Byju’s Alpha listed assets of at least $500 million and liabilities exceeding $1 billion.
Byju’s Alpha Inc. plans to take legal action against a hedge fund in Florida, alleging wrongful assistance to Byju’s parent in concealing over $500 million in cash that rightfully belongs to creditors.
Byju's, once valued at $22 billion in 2022, has seen a decline in its valuation, with some investors estimating it between $1 billion and $3 billion.
The company has recently announced plans to raise $200 million through a rights issue to address immediate liabilities and cover operational costs.
Activist investor Elliott takes stake in Etsy
Activist investor Elliott Management has acquired a roughly 13% stake in Etsy and secured a seat on the company's board of directors.
Elliott, known for its aggressive tactics, is now Etsy's largest shareholder. Marc Steinberg, an Elliott partner specializing in technology, will join Etsy's board. Elliott believes there is "significant value creation" potential at Etsy.
Steinberg also sits on the board of Pinterest, and the stock price of Pinterest has increased by 100% since Elliot's Investment in July 2022.