Apple and Amazon sales up despite rising prices

Image source, Reuters

Amazon and Apple posted better than expected sales, which reassured investors that the tech giants will be able to weather the global economic downturn.

Amazon said in a trading update that higher fees for its Prime membership would boost its bottom line.

Despite rising prices, both firms said they were controlling running costs.

The updates caused shares to go up.

Customers are closely watching the quarterly updates from Apple and Amazon.

The US economy shrunk for the second quarter in a row, a milestone that in many countries would be considered an economic recession, but not in the US.

"Despite the challenging operating environment, our June quarter results continued to demonstrate our ability to manage our business effectively," said Apple's chief operating officer Luca Maestri.

Apple sales increased 2% between April and June to $83 billion. The company's gains were powered by the sales of the iPhone.

The company's services business, which includes Apple Pay, grew 12%.

Despite its e- commerce business being hit recently, Amazon said its revenues were up. In the second quarter, online sales fell for the second straight quarter.

The company is protected by the strength of its clouding computing division, Amazon Web Services.

Amazon spooked investors this spring as its online sales softened and it warned it had spent too much to hire and add warehouses in order to keep up with the times.

This time, it gave a more positive outlook.

Andy Jassy said that despite continued inflationary pressures in fuel, energy, and transportation costs, they are making progress on the more controllable costs.

Prime Day, when discounts typically drive a surge of buying, was moved from June to July and Amazon said its e- commerce sales were poised to look weak.

"Amazon proved that the strong can survive even the toughest environments, even though big tech has been mixed this earnings season," said Laura Hoy, equity analyst from Hargreaves Lansdown.

Scott Kessler, global sector lead at Third Bridge, said that Apple and Amazon are too big to be unaffected by a slowing global economy.

Their size makes them able to navigate those challenges and negotiate prices.

He said that Apple has done an excellent job of managing those costs and that they are typically one of the biggest buyers.