Tech ti­tans earned record prof­its while Covid peaked

The Daily Telegraph - Business - - Front Page - By James Tit­comb in San Fran­cisco

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.

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