Tech titans earned record profits while Covid peaked
SILICON Valley giants Amazon, Apple and Facebook enjoyed a dramatic boom during the worst months of the pandemic, posting rises in quarterly profits last night that will add fuel to claims they are becoming too dominant.
Shares in the companies jumped in after-hours trading as they revealed that rises in online shopping and internet use during lockdowns meant soaring revenues in the three months to the end of June, despite wider economic pain.
Meanwhile, Google’s parent company Alphabet reported a 2pc drop in revenues, its first ever sales decline.
Apple revealed an 11pc revenue increase to $59.7bn (£45.6bn), flouting forecasts that sales would fall, due to strong demand for apps, Mac computers and iPads.
However, it admitted that its new iPhones would be delayed amid the coronavirus pandemic. Chief financial officer Luca Maestri said they would be released “several weeks” after the traditional late September launch.
The results were in stark contrast to US figures that revealed a 32.9pc annualised contraction in the world’s biggest economy during the same period, sending Wall Street down earlier in the day.
Amazon revealed sales in the quarter had increased 40pc to $89bn (£68bn). Profits doubled to $5.2bn despite its chief executive Jeff Bezos previously warning that they would be wiped out by heavy spending on the pandemic.
Facebook’s revenues increased 11pc year on year, and monthly users swelled by 12pc to a new high of 2.7bn.
ASTRAZENECA beat forecasts for the second quarter as demand for cancer and diabetes medication held up.
First-half revenues jumped 14pc to $12.6bn (£9.7bn) after a strong end to the period triggered sales growth in every region of the globe.
The robust performance was driven by strong trading in key drugs for cancer, diabetes and respiratory illnesses such as asthma, the firm said. The pandemic helped to boost pharmaceutical companies as patients stockpiled medication more than usual.
Astra is working with Oxford University on a Covid-19 vaccine that is viewed as a front-runner in the race to beat the disease, and reiterated it is on track with late-stage trials for the jab.
Pascal Soriot, Astra’s chief executive, said he was pleased with the firm’s robust growth in new markets and the success of its latest medicines. He added: “While we continue to anticipate variations in quarterly performance, the continuation of our strategy makes us confident about the future.”
Recent optimism over its coronavirus vaccine has sent Astra surging towards the top of the FTSE 100, making it worth £114m and Britain’s secondmost valuable listed company after consumer goods titan Unilever.
The firm maintained its 2020 outlook yesterday and its shares rose 1.6pc to close at £87.51. The stock has climbed more than 15pc this year. Analysts at Shore Capital said the pipeline of new medicines from the firm continues to look strong. They said: “We think continued success and momentum in the pipeline is critical, alongside the ongoing strong performance commercially, in order for AstraZeneca to maintain its premium rating. ”
Separately, heroin substitute maker Indivior swung to a £171m pre-tax loss for the half to the end of June after a decline in market share for its bestselling opioid addiction treatment Suboxone.