Tech gi­ant shares see re­newed in­vestor in­ter­est amid im­pres­sive re­sults

Business Day (Nigeria) - - COMPANIES & MARKETS -

Shares of Ap­ple, Ama­zon and Face­book jumped, with Google’s Al­pha­bet also climb­ing, as quar­terly re­ports from the four Big Tech gi­ants fu­eled in­vestors’ in­ter­est, push­ing the Wall Street to a four-month rally.

The four tech gi­ants re­leased their re­ports the same day, with Ap­ple, Ama­zon and Face­book surg­ing 5per­cent or more while Al­pha­bet traded up about 0.5per­cent. The Big Tech quar­tet ac­count for nearly a fifth of the S&P 500’s stock mar­ket value. In­dex funds track­ing the S&P 500 and tech-heavy Nas­daq rose 0.8per­cent and 1.6per­cent.

Ap­ple printed rev­enue gains across ev­ery cat­e­gory and in ev­ery geog­ra­phy as con­sumers work­ing and learn­ing from home dur­ing the COVID-19 pan­demic turned to its prod­ucts and ser­vices.

Ap­ple’s fis­cal third-quar­ter rev­enue and prof­its were $59.69 bil­lion and $2.58 per share, com­pared with an­a­lyst ex­pec­ta­tions of $52.25 bil­lion and $2.04 per share.

Sales in its ser­vices seg­ment, which also in­cludes of­fer­ings such as icloud and Ap­ple Mu­sic, rose 14.8% to $ 13.16 bil­lion, com­pared with and an­a­lyst ex­pec­ta­tions of $13.18 bil­lion.

Ac­cord­ing to Ap­ple CEO Tim Cook, Ap­ple has 550 mil­lion pay­ing sub­scribers on its plat­form, up from 515 in the pre­vi­ous quar­ter. Sales in the wear­ables seg­ment that in­cludes the Ap­ple Watch rose 16.7% to $6.45 bil­lion, com­pared with es­ti­mates of $6.0 bil­lion.

Cook said that af­ter dis­rup­tions in April, sales be­gan to pick back up in May and June, helped by what he called a “strong” launch for the $399 iphone SE in­tro­duced in April.

The world’s big­gest so­cial net­work, Face­book also out per­formed an­a­lysts’ es­ti­mates for quar­terly rev­enue de­spite an un­prece­dented boy­cott and the eco­nomic dis­rup­tion of the coro­n­avirus pan­demic.

Face­book posted rev­enue growth of 11%, its slow­est ever but still far above an­a­lysts’ ex­pec­ta­tions of 3%. Ad sales, which con­trib­ute nearly all of Face­book’s rev­enue, rose 10% to $18.3 bil­lion in the sec­ond quar­ter as peo­ple un­der lock­down spent more time on­line and busi­nesses rapidly piv­oted to e-com­merce. Monthly ac­tive users rose to 2.7 bil­lion, ahead of es­ti­mates of 2.6 bil­lion. Net in­come came in at $5.2 bil­lion, or $1.80 per share, in the three months ended June 30. A year ear­lier it earned $2.6 bil­lion.

Jeff Be­zos -owned Ama­zon, printed the big­gest profit in its 26-year his­tory as on­line sales and its lu­cra­tive busi­ness sup­port­ing third-party mer­chants bal­loned dur­ing the coro­n­avirus pan­demic with rev­enue jump­ing 40per­cent from a year ear­lier to $88.9 bil­lion.

On­line store sales jumped 48% to $45.9 bil­lion in the sec­ond quar­ter; its cloud ser­vices also saw higher de­mand as com­pa­nies switched to vir­tual of­fices in the pan­demic. Rev­enue from Ama­zon Web Ser­vices (AWS), which sells data stor­age and com­put­ing power in the cloud, rose nearly 29% to $10.81 bil­lion.

For Google, the world’s most pop­u­lar search en­gine, Al­pha­bet shares were barely changed at $ 1,552, above their pre-pan­demic high, af­ter it said rev­enue fell 2% in the sec­ond quar­ter, less than an­a­lysts’ es­ti­mate of a 4% de­cline. Al­pha­bet, whose ad sales ac­count for about 78% of its rev­enue, has strug­gled dur­ing past eco­nomic slow­downs, as mar­ket­ing is of­ten the first bud­get item to get slashed.

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