Big Tech earnings grow during epidemic while economy slips

(Bloomberg) – The largest US technology companies are thriving in an epidemic that has increased dependence on their products and services, while the rest is more part of the economy. This resulted in Apple Inc., Inc., Facebook. And Alphabet Inc. is showing the industry in crisis on Thursday as lock-down consumers use technology gadgets and the Internet for entertainment and social connections, shopping, learning and work.

The four companies together reported revenues of $ 206 billion and net income of $ 29 billion in the three months to the end of June.

“Right now, it’s the big tech world and everyone else is paying rent,” said Wesbush Securities analyst Dan Ives. “They are now consumer-oriented and this crisis has pushed their growth forward nearly two years.”

A day after the results of the four companies, their leaders faced Congress hearings over whether they had broken the antitrust rules and needed to be reformed again. Most of them saw a bounce on Friday. Apple and Facebook recorded a market valuation of the iPhone manufacturer, briefly surpassing Saudi Arabian oil company Amazon to achieve 6.4%. Only Google moderated the trend, slipping 4.3%.

Apple executives were quick to recognize how their strong results contrasted with an economic collapse that has led to millions of jobs, hundreds of deaths and many bankruptcies.

Earlier on Thursday, US government officials reported that GDP contracted the most on record – 32.9% on an annual basis – and 17 million Americans claimed state unemployment benefits in mid-July.

“We are aware of the fact that these results stand in relief in times of real economic adversity for businesses, large and small, and of course families,” Chief Executive Officer Tim Cook said on a conference call. “We don’t have a zero-sum approach to prosperity, and especially in times like these, we’re focused on growing the pie, making sure our success is not our success.”

Cook cut his usual litigation of praise for his company’s quarterly performance and instead devoted things like contact-tracing partnerships with Google, deployment of masks, and face shield design to devote his scripted time to calls. Discussed. Medical personnel.

Although the number portrays a clear picture. Sales of iPads and Macs grew on demand from people working and studying from home. The Mac had its second-strongest quarter, while the iPad had the best June quarter in eight years, Cook noted in an interview with Bloomberg TV.

Amazon posted a record quarterly profit as people shopped online to avoid physical stores. Unit sales grew 57% at the largest online retailer, the fastest pace of growth since the company broke that metric.

“E-commerce penetration is accelerating,” said Hari Srinivasan, a senior analyst at Newberger Burman. He said that Amazon is a major beneficiary of the change, and “the changes are here to stay”.

Amazon executives, on release of earnings and conference calls with analysts and media, did not go out of their way to postpone the company’s record sales and profits. Instead, he highlighted the company’s hiring during the epidemic, as well as investing in employee safety.

A day after testifying to Congress about the sometimes harsh behavior of Amazon’s small merchants, CEO Jeff Bezos said in a statement that such sellers saw faster growth than Amazon’s own retail operations. Facebook reported better-than-expected results, partly because so many small and medium-sized businesses are running online right now to survive, said Sheryl Sandberg, chief operating officer.

“A lot of businesses are struggling, but at the same time businesses have to pivot online,” she said. “We become a place where you can set up a website, set up a digital storefront.”

The company reported that it has more than 9 million advertisers, and more than 180 million small businesses that use free parts of its service, such as Facebook or Instagram profiles.

CEO Mark Zuckerberg picked up where he dropped the retaliation hearing on Wednesday, referring to the tech industry as an “American American story”. But he also targeted President Donald Trump for the second time in this month.

“It is incredibly disappointing because it seems that it can be avoided if the US government handles the matter better,” Zuckerberg said.

Alphabet’s Google was the only major tech company to report a significant impact from the epidemic on Thursday. Revenue declined for the first time as advertisers spent less. The company is heavy for the travel and retail industries, particularly in the grip of crisis.

Still, other parts of Google’s business performed well. Sales in Google’s cloud business grew 43%, while YouTube advertising revenue grew 6% as more people watched online video at home.

CEO Sundar Pichai raised concerns about a regulatory crack at Google, which faces an imminent adversary case at the Department of Justice.

“We’ve obviously been under investigation for a while,” he said. “We feel on our scale, it’s fair.”

(Updated with shares in fifth paragraph)

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