Bad report card fans of US companies fear recession
October 25 (Reuters) – US companies of tech giant Alphabet (GOOGLE.O) and microsoft (msft.o) to ge (Gen) and toymaker metal (mat.o) Tuesday reported a major slowdown in growth or warned that things were about to get worse, fueling fears of a recession and sending stocks down.
This series of disappointing results points to a number of problems facing the US economy. A strong dollar hurts the foreign profits of large firms, while rising inflation has prompted interest rates to rise and companies to raise product prices, even as consumers cut spending. has been forced.
We consumer confidence After two consecutive monthly increases amid concerns of inflation and a possible recession next year, the fall in October, data showed on Tuesday.
After years of turbo-charged development, posted by microsoft Its slowest growth in sales in five years and Google Guardian alphabet extended Barring a small quarterly decline in 2020, only 6% last quarter at its slowest pace since September 2013.
Google, which was expected by many to be more resilient due to its position as the world’s largest digital advertising platform by market share, jolted the market with weaker-than-estimated advertising revenue as the insurance, mortgage and cryptocurrency industries. In the U.S. customers tightened their advertising budgets.
Senior analyst Jesse Cohen said, “Despite being viewed as one of the most underserved companies in the advertising sector compared to peers, Google’s poor quarter is the latest sign that deteriorating infrastructure and a tough macroeconomic environment are driving advertisers to spend. prompting them to cut.” at Investing.com.
Google’s results are dangerous for Facebook parent Meta Platforms (meta.o), which is particularly dependent on the results of the advertisement and report on Wednesday. Last week, its smaller rival Snap Inc. (snap.n) No revenue growth forecast for the holiday quarter, sounding warning bells social media industry,
Alphabet said it plans to cut hiring by more than half.
Conglomerate GE, which is in the process of Breaking in three companies, said it would be Reduce global workforce Ranked fifth in its onshore wind unit, which is battling high raw material costs due to inflation and supply-chain pressures.
Alphabet shares fell 7% in trading after the bell. Microsoft fell 2% and the chipmaker Texas Instruments , which forecast quarterly revenue and lower-than-expected profit, was down 5%. in shares Spotify (spot n), which also cautioned on slowing ad growth, fell 4%. Meta shares fell 4%.
Microsoft’s slowdown in demand for personal computers and laptops was evident in the last quarter, as its Windows business slumped 15%, a sharp turnaround after months of pandemic-fueled sales for those working and studying from home. was.
“During the quarter we experienced expected weakness in personal electronics and extended weakness across the industrial sector,” said TI boss Rich Templeton. The company, like other chipmakers, has had to cut orders with gadget makers to clear stockpiles of chips after the pandemic hit a slowdown in just weeks after a spurt in demand.
mantelThe company, which is susceptible to discretionary spending cuts, lowered its profit forecast for the year, saying it would boost promotions during the busy holiday season to encourage inflation-hit shoppers to buy their Barbie dolls. .
Earlier Tuesday, Post-It maker 3M Co said it expected weak consumer spending To continue into the upcoming holiday season and cut its full year forecast.
Still, the report cards had bright spots.
Chipotle Mexican Grill Inc. (cmg.n) Reported quarterly sales and profits topped the Street as wealthy customers downed their burritos despite higher prices, even though lower-income consumers ate less frequently.
Reporting by Chavi Mehta, Tiyashi Datta, Eva Mathews, Uday Sampath Kumar, Grant Vanaik, Deborah Mary Sophia, Aditya Soni, Mehr Bedi, Kannaki Deka and Abhijith Ganapavaramin in Bengaluru, Jane Lanhee Lee in Oakland, Sheila Dang in Dallas, Hilary Russ in New York and Rajesh Kumar Singh in Chicago; Writing by Sayantani Ghosh; Editing by Richard Pullin
Our Standards: Thomson Reuters Trust Principals.
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