Big Tech makes profits out of virus-hit world
san francisco — Big Tech powerhouses on Thursday delivered robust quarterly earnings reports, leveraging the needs of pandemic-hit consumers amid heightened scrutiny of their economic power.
Profits were up for Facebook, Amazon and Google-parent Alphabet, while Apple saw a modest dip in earnings on weakness in iPhone sales. The results — showing a combined profit of $38 billion for the four companies — highlighted the massive economic power of the tech firms which have been able to ride out the global coronavirus pandemic better than most businesses.
But critics say they are too big and too powerful.
US authorities have filed an antitrust complaint against Google and are reportedly considering action against Facebook.
Meanwhile, lawmakers have sharpened attacks on social media firms for how they handle political content and “hate speech.”
Facebook chief executive Mark Zuckerberg stated anew that he is in favour of regulation when it comes to deciding what should be allowed on social media, but worried poorly crafted laws could undermine online platforms.
Alphabet chief executive Sundar Pichai said during an earnings call that the tech giant is confident it will make its case that the platform popularity comes from delivering a valued service, not abusing market power. Amazon’s third-quarter profits tripled from a year ago to $6.3 billion on strong retail sales and growth in cloud computing. Revenues jumped 37 percent to $96 billion for the technology and retail colossus. —
Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and services tim cook, CEO of Apple
Our strong quarter is...a testament to the deep investments we’ve made in AI and other technologies, to deliver services that people turn to for help, in moments big and small sundar pichai, CEO of Alphabet and Google
dubai — The world’s biggest technology companies reported solid financial results for their respective fiscal quarters, but remained cautious on the road ahead owing to the uncertainty presented by the coronavirus pandemic.
The results from Apple, Google parent Alphabet, Facebook, Amazon and Twitter are also likely to give some respite to investors and the stock market as the US presidential elections approach fast. Republican incumbent Donald Trump and Democratic challenger Joe Biden, exchanging sharp rhetoric in the homestretch of their campaigns, have been keeping investors on edge as they expect volatility next week stemming from the polls’ results.
apple’s run continues
Apple reported another record September quarter, with revenue up 1.1 per cent at $64.7 billion, posting new highs in Macs and services, the latter of which has carried the company significantly in recent years. International sales comprising 59 per cent of the figure, which beat analyst estimates.
The company also earned itself a ‘pandemic-proof’ tag, having been able to post blowout figures in its previous fiscal third quarter amid the coronavirus crisis.
“Apple capped off a fiscal year defined by innovation in the face of adversity with a September quarter record, led by all-time records for Mac and services,” CEO Tim Cook said in a statement.
Investors will be looking forward to its next quarterly report, the first full threemonth period that will include sales of its first 5G iPhones. Apple launched four variants of the iPhone 12 on October 13; the 12 and 12 Pro are already on sale, while the 12 mini and 12 Pro Max will hit shelves on November 13.
In Apple’s fiscal fourth quarter, iPhone sales totalled $26.4 billion, down from $33.4 billion a year ago, missing targets. But its other categories more than made up for it, with Mac, iPad, accessories and services posting 29.2 per cent, 46 per cent, 20.8 per cent and 16.3 per cent growth, respectively.
Apple also returned nearly $22 billion to shareholders during the quarter.
Cook, during a conference call, also teased something that would excite Apple users, implying they’re not done for 2020. “I can tell you that this year has a few more exciting things in store.”
Alphabet ‘searches’ growth
Alphabet’s revenue, meanwhile, grew 14 per cent to $46.2 billion, besting Wall Street views and buoyed by improved advertiser spending on its Search and YouTube platforms, as well as continued strength in its cloud and Play app store.
“We had a strong quarter, consistent with the broader online environment,” Alphabet and Google CEO Sundar Pichai said. “It’s also a testament to the deep investments we’ve made in AI and other technologies, to deliver services that people turn to for help, in moments big and small.”
Search revenue was up 6.5 per cent at $26.38 billion, while YouTube ads soared 32.1 per cent to $5.03 billion. Cloud revenues leapt 44.8 per cent to $3.44 billion.
CFO Ruth Porat added that the Internet giant will continue to focus on making the right investments to support sustainable value in the long term.
Who needs Prime Day?
E-commerce powerhouse Amazon continued its run with a blowout third quarter: Revenues soared 37 per cent to $96.2 billion and net income rocketed 200 per cent to $6.3 billion compared to a year ago.
And Amazon achieved this even without its vaunted Prime Day bonanza, which was postponed from its traditional July slate because of the coronavirus pandemic. It was moved to October, so sales figures from the event didn’t count in its latest results.
Amazon — another winner of the pandemic — was able to achieve the huge figures even while investing more into its workforce; this year alone, the company was able to create over 400,000 jobs.
“Two years ago, we increased Amazon’s minimum wage... and challenged other large employers to do the same... now would be a great time,” founder and CEO Jeff Bezos said. “Offering jobs with industry-leading pay and great healthcare, including to entry-level and frontline employees, is even more meaningful in a time like this,” he added.
Facebook relied upon
Social media giant Facebook received a boost from ads and e-commerce. Advertising and total revenue were both up 22 per cent at $21.2 billion and $21.5 billion, respectively. Net income rose 29 per cent to $7.9 billion.
Chief executive Mark Zuckerberg also touted Facebook’s role during the coronavirus crisis. “We had a strong quarter as people and businesses continue to rely on our services to stay connected and create economic opportunity during these tough times.”
“We continue to make significant investments in our products and hiring in order to deliver new and meaningful experiences for our community around the world.”
User numbers also impressed, with daily active users for September up 12 per cent at 1.82 billion and monthly active users at 2.74 billion, up 12 per cent as well. Facebook’s headcount also climbed, up 32 per cent.
Ads promote Twitter revenue
Twitter also beat estimates, with revenue rising 14 per cent to $936 million thanks to advertising growth. Average monetisable daily active usage soared 29 per cent to 187 million, while its daily audience grew by 42 million in the past year.
Net income, however, was down to $29 million from $37 million a year ago. Operating income hit $56 million, up from $44 million. Advertising was the biggest pull, with revenue climbing 15 per cent year-on-year to $808 million.
“We’re helping people find trusted sources of information by better organizing and surfacing the topics and interests that bring people to Twitter,” CEO Jack Dorsey said.
CFO Ned Segal added that Twitter has made progress on its brand and directresponse products, with updated ad formats, improved measurement and better prediction.
“We remain confident that our larger audience, coupled with ongoing revenue product improvements, new events and product launches, and the positive advertiser response to the choices we’ve made as we have grown the service, can drive great outcomes over time.”
Two years ago, we increased Amazon’s minimum wage... and challenged other large employers to do the same... now would be a great time Jeff Bezos,
Founder and CEO of Amazon