Vodafone Talks Up Opportunities in Europe and Africa

 

Vodafone reported a 2.6% rise in service revenues in the year to March 31st on an organic basis to 38.2 billion euros. However, in the final quarter of the financial year, the growth dropped to 2%. Nick Read, CEO of Vodafone said: "We are not immune to the macro economic challenges in Europe and Africa. But we are very well structured to deal with it." Source: Vodafone presentation.

Apple Expects Covid-Related Hit

Apple said its year-over-year revenue performance during the June quarter will be impacted by "supply constraints caused by Covid-related disruptions and industry-wide silicon shortages". It expects these constraints "to be in the range of 4 billion to 8 billion US dollars which is substantially larger than what we experienced during the March quarter."

"The Covid-related disruptions are also having some impact on customer demand in China," Apple added. "With respect to foreign exchange, we expect it to be a nearly 300 basis point headwind to our year-over-year growth rate. Additionally, we paused, all sales in Russia during the March quarter. This will impact our year-over-year growth rate by approximately 150 basis points."

In the March quarter, Apple's sales rose 9% year-on-year to 97.3 billion dollars, with product revenue up 7% and services revenue up 17%. The company said it now has more than 825 million paid subscriptions across the services on its platform, which is up more than 165 million from a year earlier. Source: Apple earnings call transcript

Amazon Leans Heavily On AWS

Amazon forecast that its revenue in the second quarter will be between 116 billion and 121 billion US dollars - growth of between 3% and 7% compared with second quarter 2021. This guidance anticipates an unfavourable impact of approximately 200 basis points from foreign exchange rates.

In the first quarter of 2021, Amazon's sales rose 9% (in constant currencies) to 116.4 billion dollars. The cloud services business AWS was the main growth engine - its sales leapt 37% year-on-year. 

Amazon's push into the gaming sector is gaining momentum. It reported that Lost Ark, the free-to-play multiplayer online game, exceeded 20 million global users and became the second-highest played title of all time by peak concurrent players on the distribution platform Steam. Published by Amazon Games in Australia, Europe, Latin America, New Zealand, and North America, the game was developed by Smilegate RPG, which is based in South Korea.

Amazon has also made its Amazon Luna cloud gaming service widely available. It includes the Prime Gaming Channel, where Prime members can access a rotating selection of games on Luna for free. Source: Amazon statements

YouTube Sees Slowdown

Alphabet reported revenue growth of 26% year-on-year for the first quarter, at constant currencies, to just over 68 billion US dollars. The top line was held back by a relatively weak performance by YouTube, which saw advertising revenues rise by just 14% on a reported basis, after growing 25% in the previous quarter. The company said that direct response advertising on YouTube saw only "modest" growth.

Amid concerns about competition from Tik Tok, Sundar Pichai, CEO of Alphabet and Google, said: "YouTube Shorts is now averaging over 30 billion daily views -- that’s four times as much as a year ago. ... On average, viewers are watching over seven hundred million hours of YouTube content on televisions every day. And in the year ahead, we’ll give YouTube’s Connected TV viewers new smartphone-controlled navigation and interactivity features, allowing people to comment and share content they’re watching on television directly from their devices." Sources: Alphabet statements

Verizon Flags 5G Momentum

Verizon forecast that its reported wireless service revenue growth will now be at the lower end of the previously guided range of 9% to 10% for 2022. The telco is planning capital spending of between 21.5 billion and 23.5 billion US dollars in 2022, as it invests between 5 billion and 6 billion dollars in its C-Band 5G network.

For the first quarter of 2022, Verizon reported an increase in operating revenues of 2.1% year-on-year to 33.6 billion dollars.  Wireless service revenue grew 9.5%, reflecting the first full quarter of TracFone ownership. Verizon also reported strong demand for fixed wireless broadband. Source: Verizon statement

Tesla Shrugs Off Supply Issues

Tesla reported a 81% year-on-year increase in revenues for the first quarter to 18.8 billion US dollars. It achieved this growth despite "global supply chain, transportation, labor and other manufacturing challenges, limiting our ability to run our factories at full capacity."

Tesla said energy storage deployments increased by 90% to 846 MWh, in the first quarter mainly driven by strong Powerwall deployments. "We are in the process of ramping production at a dedicated Megapack factory to address the growing demand," it added. However, solar deployments decreased by 48% to 48 MW. "This reduction was caused by import delays beyond our control on certain solar components. Solar roof deployments continued to grow, " Tesla said.

The carmaker is aiming to release FSD (full self driving) Beta software to all U.S. FSD customers before the end of this year. Initial release of FSD Beta to some customers in Canada started in March 2022. Source: Tesla collateral

Meta Hits Competitive Headwinds

After announcing revenue growth of 21% (at constant currencies) for the fourth quarter of 2021, Meta forecast revenue growth of just 3% to 11% for the current quarter. That would equate to first quarter 2022 total revenue to be between 27 billion and 29 billion US dollars.

Meta (owner of Facebook) expects year-over-year growth in the first quarter to be impacted by headwinds to both [ad] impression and price growth.  "On the impressions side, we expect continued headwinds from both increased competition for people’s time and a shift of engagement within our apps towards video surfaces like Reels, which monetise at lower rates than Feed and Stories," explained Dave Wehner, CFO. "On the pricing side, we expect growth to be negatively impacted by ... Apple’s iOS changes ... and regulatory changes....and we’re hearing from advertisers that macroeconomic challenges like cost inflation and supply chain disruptions are impacting advertiser budgets." Source: Meta collateral

Qualcomm Lifted by 5G and IoT

Chip supplier Qualcomm reported a 30% year-on-year rise in revenues for the quarter ending December 26th to 10.7 billion US dollars. QCT revenues (from sales of chips, rather than licensing) rose 35%. Qualcomm anticipates revenues of between 10.2 billion and 11 billion dollars in the current quarter, which would represent an increase of between 29% and 39%.

Qualcomm estimated that shipments of 3G, 4G and 5G handsets grew 7% in calendar 2021, including approximately 535 million 5G handsets. For calendar 2022, the chip designer anticipates sales of more than 750 million 5G handsets.

Qualcomm reported IoT revenue growth of 41% year-over-year in the quarter ending December 26th across consumer, edge networking and industrial. "In consumer IoT, our early investments, collaboration with Microsoft and the recent acquisition of NUVIA uniquely positions us to drive the PC industry transition to ARM-based computing for next-generation connected laptops," Qualcomm said. "We're also seeing strong growth in premium and high-tier Android tablets, further highlighting the convergence of mobile and PC."

The company also reported that its "Wi-Fi 6 immersive home platforms" are seeing significant growth in China, one of the fastest-growing markets for Wi-Fi 6 for both retail and carrier deployments. It also said that "5G as wireless fiber" continues to gain scale and expand globally, while combined smart utility meter, tracking robotics and retail revenues more than doubled over the past year. Source: Qualcomm collateral