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00:00At two point seven trillion dollar company Apple that is out. Let's take a look at second quarter revenue ninety seven point three billion dollars for assessments of ninety three point nine eight billion dollars. So a big beat their second quarter EPS down to the bottom line. Big improvement here on earnings per share 152 versus estimates of a one forty two. So again you take a look at the service revenue as well. Also another beat nineteen point eighty two billion dollars for a second quarter service revenue versus estimates of nineteen point seventy eight MAC revenue remain better than expected. iPhone revenue better than expected products revenue better than expected. China revenue. You're up three and a half percent year over year. Wearables home and accessories. Just a slight underperformance here but I paid revenue as well. Better than expected. Are you sensing a theme. It seems like this company at least for now has done it again and indeed authorizing another boost of a 90 billion dollar share buyback program. Additionally here to help support those shares and boosting a quarterly dividend 5 percent to twenty three cents per share from twenty two cents a really sort of here's some big outperformance when you think not only about the fundamentals on the top and the bottom line but a buyback and a dividend program remain. Here the shares higher in the post market trading year by about 3 percent. Bloomberg's Emily Chang actually spoke with the CEO of Apple just a little while ago. Tim Cook what it can tell you. Hey there Romain and I agree with Taylor really a beat across the board and pretty impressive given the macro economic forces we're seeing all of these big tech companies facing. Tim Cook underscored that saying this is a record quarter in so many ways. We grew in each of our categories he pointed out except for ISE where he said they have had significant supply constraints. But despite that really interesting that almost half of the customers who bought new iPods in the quarter were totally new to iPod in terms of more color on the supply issues that they're facing. What he said is they did experience supply constraints but they were significantly lower than what they experienced in December and they were all silicon shortage related. And we know there's an industry wide issue there that affected several of our products. So Apple in this last quarter facing issues around chip supply not unlike many other companies. I did push him on what they're seeing in this current quarter their outlook for the rest of the year. He said they'll get into all of that and current quarter trends on the call. I also asked about the macro environment. Obviously inflation is rising. There is an ongoing war. Customers are under pressure rising gas prices. How does he expect that to impact discretionary spending the buying of gadgets. He pointed out that here in the U.S. for example still very strong growth 21 percent growth in the Americas year over year. He said we are seeing inflationary pressure and you can see that in our operating expenses and gross margins. We're seeing that and navigating that as best we can. I asked some specific questions about Russia. Just how much that's impacting Russia. As we know Apple pause product sales in Russia. He said they're going to give us an exact number on the call. So I'll be looking out for that just in terms of how much it is hitting their revenue. And then we got into streaming as well. Of course we saw that decline in subscribers for Netflix first decline in a decade. And there are these broader questions about the future of the streaming business. So I asked him Cook about Apple TV plus and just how bullish they are still on streaming as a business. He said We're very bullish. Our philosophy for TV plus from the beginning and it continues unchanged is to create high quality original content that aligns well with our values and to be one of the most desired platforms for storytellers. I feel he says we're doing a pretty good job of that. He pointed out a coda and ted lasso and the successes that they've seen there. OK. So he seems committed to Apple plus. Interesting. They're obviously a great quarter of pretty much all around on those numbers. I'm sure you're gonna be covering this in full on Bloomberg Technology to check out Emily Chang in just about 30 minutes time right here on Bloomberg Television. Want to jump over now to one of our Bloomberg intelligence senior analysts who covers Apple in Iraq. Rana here. This was good right. I mean you wish you were here a while ago. I said it was gonna be good and it's good news. But I'm surprised this is a far better than what I would have expected. And one comment that Emily Chang said that really got my attention was that half the iPod buyers were new buyers. And this is exactly what I've been saying for the last several days. Please trust the public of the ecosystem because once you buy these products you get. I mean it's like a cult. You are part of it. You're going to buy new products. You're going to buy services. And that installed base is not going to be an issue. You point out though they refresh that I paid in a meaningful way. And I pointed out because I was one of the people one of the new iPod customers here. And I have been waiting for a while because they all the refreshes they did were just kind of like they were nothing. And then they did a major one. It was it was a significant one you to the mini. So the fair point is that since you had an old or use it. Yeah. You're going to go buy a new Apple product. If the old one you didn't like it you didn't go out and buy another ecosystem. You were part of the ecosystem. And I think that's the main thing is you stick to the ecosystem and you don't you know go away from it. Only maybe negative spot here is wearables home and accessories coming in lighter than expectation. So of course Tim Cook continues to talk about record numbers across the board. But there have been big expectations for that because we thought the wearables and the new sort of health and the fitness was going to be a big bright spot. Does any of that stickiness worry you. No it doesn't because you know what didn't come back the next quarter. The iPhone numbers are surprising. I mean one would have expected with so much exposure to China and Russia. So I mean Europe in general you would have expected some softness there. I'm I'm a bit surprised about that. Services growth 17 percent. I was expecting slow. I mean not that they had guided to about that number. But I would have expected a little bit slower because the app store revenue wasn't that high. According to our estimates and took us a little bit about the buyback and 90 billion dollar increase. I mean that seems pretty par for the course for Apple. See one of the things we talked about before also that they can spend anywhere from 90 to 100 billion dollars buying back their own stock and nothing's going to happen to their balance sheet. They're not even this is this is just a portion of what they're generating right now. This is not you're not even borrowing a dollar from anywhere else right now. They have excess cash on the balance sheet. And we are so far away from being actually what they call as a net net neutral at this point. I'm curious. The world was business I mean the revenue there. It's not really growth right. I mean but they still talk about this business like it's a key component of their overall strategy. Why. Yeah. But you know it's again part of the ecosystem. You're going to you know those little tags are the headphones or you know all these things just sparked off you know maintaining what you already have. Right. Just kind of keeping you tethered to that. But we heard from Tim Cook of course talked about the streaming business. I know Apple TV and nothing burger when you're talking about billions of dollars. But after Netflix we were really wondering who is committed to this business and it takes commitment. Are you sure that the Apple TV is again keeping me in the ecosystem. Is it where is the juice worth the squeeze. So so this is the thing that we think now with Netflix blowing up. I think it's really good for both Amazon and Apple because they can spend a lot much more on buying new content and creating new content without worrying about you know what investors are going to say. Netflix will have to worry about giving some margin back on you. They can't beat blindly any more than they were before. So it's going to be very interesting of how these two companies go out and gain some market share over the next few years. Is that organic growth. Yes and no. They will buy some content out there. But as Tim is saying you know they go to create their own original content and become a differentiator. So if I would say I'm going to give you an iPhone subscription plan with some of these things bundled around it. I mean that's a good thing. And it keeps the platform even more stickier. All right. Our thanks there to Bloomberg intelligence senior analyst on Iraq Ron. Helping us break down Apple's earnings second quarter sales and profit topping analysts estimates. We do want to get back over to Amazon earnings report a little while ago. They actually weren't warning earnings a net loss of three point eight billion dollars but more importantly. Thank you. Thank you for that. Taylor And but more importantly here is really that forecast that you can forecast an idea that costs continue to rise. We're gonna to cover this story when we come back from the break in just a moment. This is Bloomberg. This is triple take care on Bloomberg focusing again on those big quarterly results we get from big tech. And I've got to walk you and reminds you through the roadmap that we're taking. Yes we just heard from Apple right. We got the view from Tim Cook. Record earnings and sort of record quarterly results record sales when you think about all different areas and segments of the business pushing forward. We want to think about Amazon just a little bit. Some of the business is here in transition when we think about a W W but then maybe some struggles here in the e-commerce department. We're going to continue to digest sort of all of what that means. And then of course the labor drive and this is affecting both of those companies and arguably more than just big tech as well. Some of the big union pushes. What does it mean for some of these higher labor costs of course that continuing to be here on the horizon. Let's go and died back though into the numbers because Amazon remained was a really mixed story here. Right. You had first quarter net sales that came in a little bit. Well maybe right on line where you think about expectations that forward guidance was not good. You have quarterly earnings and sales and maybe a loss actually not in earnings here. When you think about sort of the forward business of next quarter and coming out and making it pretty clear we're no longer going to be chasing this market no longer chasing fiscal or staffing capacity. Unfortunately not enough here to boost the shares you are still down remain more than 9 percent in after hours trading. The big cost story here a 14 percent jump in some of those worldwide shipping costs. Senior analysts over at Bloomberg Intelligence Putnam Goyal joining us right now to walk us through this. And I should point out the CFO is actually briefing reporters now when he talks about how inflation at a 2 billion dollars in costs in the most recent quarter. I guess the big question for investors is how do you get those costs down going forward. You have to find efficiencies in your own processes. So how they ship goods how they actually open up packages how they pack them they need to find efficiencies right now. We spoke about this earlier. You know you order something you put five things in your basket you get five packages. That's not efficient. I mean I'm just hoping you can put this into context for us because again we're watching the stock fall nine point five percent after hours. But we know it's a very punishing environment for tech companies broadly for companies that are missing their earnings. I mean should we trust this market reaction is as bad as the after hours trading would suggest. I think you have to go back to the start of the year. When tech companies started reporting the biggest focus shifted from top line to margin. And that continues to play out. Investors care about profitability. Yes they want to see top line growth which we clearly saw at Amazon. But the margins are much worse than we expected. I think this is the first loss if I recall correctly in seven or eight years. We haven't seen a loss. And and when I think about this guidance I think what's really interesting is I looked more into its prime days moving from June to July this year. Prime days are very promotional event for Amazon. So you would have expected the margins to be a little bit better. Yeah. With that shift. But it's actually the other way. I mean there's even more pressures. And we're actually thinking coming up in the second quarter. I want to talk about some of those pressures remain had pointed to the point in the press release when they talked about the acquisition and trying to close in here of course and I believe closing already on that MGM deal. We were just speaking with your colleague on Rob Reiner and he said that after the Netflix debacle it put Apple and Apple TV in a really good place. They're bringing in 90 billion of free cash flow. They can spend whatever they want on content. We thought that that was the case with Amazon. But are we now sort of rethinking some of the bigger is better themes here when you think about MGM and the content and and the Amazon TV plus. I agree with exactly what he said even for Amazon. Amazon will still continue to make big bets in these businesses whether it's cloud advertising or media. These are once again very very profitable businesses. When you compare them to the retail business. So we think if you think about investments going forward and where cash will be deployed it will be towards these higher margin businesses instead of online. They've already invested a lot in online. There's been a lot of discussion about the size of this company and I guess all the different businesses that has taken on a lot of questions as to whether some of those businesses would be better as standalone businesses. Do you think that's in the cards. I think that's always been something that investors have wanted. Do I think that that will happen. I don't at the moment. I think it will be in Amazon's best interests for themselves to keep the businesses together because to drive growth in online they really need the margin support from these higher margin businesses. And I'm curious to hear your perspective on the international business because we also saw that a three point five billion dollar loss of their sales were falling. What does that say about you know Amazon's growth from here. Put that into context. Well I guess you have to break international. So we've heard from other companies that a pack has been weaker. Part of that is trying to determine where there has been weakness. But in Europe there has been strength in the online business from what we've seen at other companies. So we think it's a mixed bag. Clearly the bulk of Amazon's business is in the US. So that's where our focus is. And we think that's really what's driving the numbers rather than the international play. All right. Always wonderful to get insights from you the best of Bloomberg intelligence there Bruno Goyal. We're going to move now to our from our second take to our third take here as we focus in on some of the big tech earnings and the growing drive to unionize. We talk about workers at an Apple store in Atlanta being the first in the U.S. to file for a union election. And of course we know all the saga going on at the Amazon warehouses including at the one in New York City. A second one starting to have a vote there. Amazon Labor Union President Christian Smalls led the first successful vote in New York. We asked him a little bit earlier what's behind the push to unionize. You can see the cost of living is going up. Inflation is still going up. Gas prices going up. And we're we're still being paid what we've been paid five years ago. When it comes to Amazon they gave us a raise. Back in 2018. But that's still not enough. It's not sustainable for the cost of living especially in New York City area. And I think we definitely rightfully deserve 30 DAX. We're or better. We are talking about how much money this company particularly made during the pandemic. Made three times the amount of money that was offered a tenth of our labor. All right. You look at a guy there like Christian Smalls basically David going up against Goliath. He's had at least one victory here at that Staten Island center here in New York City. Joining us now to talk a little bit more about this unionization push is John Logan professor and director of labor and employment studies at San Francisco State University. John I do want to start off with this idea here of what really precipitated I guess some of the success stories that were now starting to see for some of these union efforts at Amazon at a Starbucks at an apple. Yeah I think a lot of it has to do with changing the labor landscape during the pandemic. I mean a lot of these people Amazon workers Starbucks workers workers in Apple stores. They worked on the frontlines throughout the time to make their jobs get harder. Their jobs got more stressful their jobs more dangerous. And they didn't feel that they had been rewarded adequately for their service. They didn't feel that they'd been treated with respect. And so they became more receptive to the type of message of these union campaigns. But it is really important to stress also if you look at Amazon if you look at Starbucks and now if you look at the Apple stores the one you mentioned in Atlanta is the second store in New York City. It's really the workers who have been organizing themselves. It's not a big outside union. You talk a little bit about that because you write about this sort of unconventional sort of union campaigns. How important is that aspect of it of it not being sort of this national driven. But so it is very very localized and specialized effort. Yeah I think it is really important because you know it became very difficult for Amazon and for Starbucks who traditionally during these campaigns always want to portray the union as an external third party that will get between you and your supervisor or your manager. But here the employees feel in a very real way that they are the union. And you know everything I've read everything everyone I've talked to part about the Apple campaign that is similar to I mean they've been organizing for months and months and months primarily using this card the messaging app like in other ways too. And so to basically organize themselves really really well. And it's only like in the last month. First in New York City store went public with their organizing campaign then Atlanta came out. But a week later saying they're in a position to file for an election. So it was only at that point that they talked about affiliation with a larger outside union to help them with the legal process of going through and now larbi election. But they they had basically already organized themselves. You know it wasn't because of professional union organizers going round up or stores or even Starbucks stores you know. So it's really this process of self organization and its worker led and you know that that's creating difficulties for the company. But I want to hear your perspective on the different workforces when you think about these campaigns that we've seen. I mean if you think about Apple store workers perhaps they're not as crucial as an Amazon warehouse worker as a Starbucks barista arguably. I mean does that give these Apple union push workers less leverage than say a worker at Starbucks or Amazon. Well you know you're right. You know if I'm an Amazon warehouse workers are absolutely critical to the operation. You know Amazon couldn't function without them. Same with the Starbucks baristas. In the case of Apple stores I think about 36 percent of sales take place through the brick and mortar stores. But a lot of the sales are online. Nevertheless the fact that they're organizing at a really high profile company is really beneficial to them. I don't naturally think that will make a difference to their organizing campaign. You know in West Thomas Apple decided at some point that it didn't leak distorts the tall. Then I think through a campaign. You know it seems that they're very solid. Over 70 percent of the workers at Atlanta hype sign union authorization cards. And as you said they're taking place in the context of all of these other campaigns. The Atlanta workers said they were directly inspired by the Amazon workers who had tried unsuccessfully to organize that Bessemer Alabama a year ago. But that's actually what pushed them into trying to form their own union. So yeah I mean they're smaller in number. There's about two hundred seventy stores nationwide. But sixty five thousand workers. But it has the potential to take off again like the Starbucks campaign if they win in Atlanta if they win in New York City. I think you could see this spreading run to country very very quickly because we already know that it's actually a lot of organizing going on that separate Walker Apple stores. So having gone public yet. Yeah. Well when we get that spreading we know that you are the voice to help us walk through all of this. Really appreciate your time as always. John Logan director of Labor and employment studies over at SAN. Go State University. We're going to be next. We're going to be back next with our final take which is next. This is Bloomberg. Welcome back to Triple Take our final take a tale of Two Cities here with the earnings out of Apple and Amazon. It so good. You really see that in the share price reaction with Amazon clearly to the downside and Apple clearly here Katie to the upside. What's that. It's just you're starting to drink a little early. I could use some caffeine. But in any case you add that all together. Actually if you look at the Qs right now the QQQ ETF some of the 1 percent I am so excited for tomorrow's trading session. Yeah. And this is interesting. You're talking about what the highest rated number that's AP and the third highest weighting in the S & P. We'll see which one of these sort of wins that Microsoft might be helping out by tomorrow. You know especially particularly coming off the rally that we saw today. You wonder how much momentum that has into tomorrow. Well the good news is we are all here tomorrow. So that does it for triple. Take you back with us tomorrow and to get us through tomorrow. First you have to watch B Tech which is DAX technology. This is Bloomberg. Have a great.

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Bloomberg Markets: Triple Take (04/28/2022)

Romaine Bostick, Taylor Riggs & Katie Greifeld discuss one topic from three different angles after the closing bell on Wall Street. Today's show tackles Apple and Amazon earnings Guest Today: John Logan of San Francisco State University (Source: Bloomberg)

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