The pandemic has had serious economic and financial consequences for companies. However, companies like Amazon, Alphabet (Google), Facebook and Apple, recorded above average profits.
This Thursday, the four companies – Amazon, Apple, Alphabet and Facebook – registered US $ 28 billion. Considering the negative impact of the pandemic, the results were quite healthy.
Wednesday, the US Congress questioned CEO’s Jeff Bezos (Amazon), Tim Cook (Apple), Mark Zuckerberg (Facebook) and Sundar Pichai (Alphabet) about their power in the market and business practices. It was part of a survey of regulators and legislators about the dominance that technological giants have in the market. Together, the companies represent US $ 5 billion.
Despite all the controversy in the fall of advertisements and financial efforts to monitor hate speech, Facebook appears to be growing unaffected by the pandemic. Second quarter revenue increased 11% over the previous year, to $ 18.7 billion, while profits increased 98%, to $ 5.2 billion. The results were well above analysts’ estimates of $ 17.3 billion in revenue, with a profit of $ 3.9 billion, according to data provided by FactSet.
Despite increasing scrutiny by regulators, questions about their role in subverting elections and how people use the platform to spread misinformation, neither users nor advertisers have shown a trend towards Facebook’s disuse.
Currently, more than three billion people regularly access Facebook or one of their application families, as services are spread across much of the developed world. And about 2.47 billion people use one or more Facebook apps every day.
The company also confirmed that the number of users has grown by 12% compared to last year a year ago.
Even with the increased economic difficulties in terms of consumption, given that the pandemic affected purchasing power a lot, online shopping on Amazon resulted in US $ 88.9 billion in quarterly sales, an increase of 40% over the year previous. Profit doubled to US $ 5.2 billion, despite the company having invested in expanding warehouses and other structures in order to increase production capacity.
“Simply put, Covid-19, in our opinion, injected growth hormones into Amazon,” said Tom Forte, an analyst at investment bank D.A. Davidson & Company, wrote in a recent note to investors.
In April, Bezos told investors not to expect operating profit, and perhaps even a loss, as the company planned to spend about $ 4 billion on coronavirus-related expenses. Expenses like temporary increases in wages, a decline in warehouse efficiency due to social distance and $ 300 million to test your workforce during the pandemic.
But even those costs have not matched the explosive growth in demand, with sales in the online department increasing 48%.
In a press release, Amazon declined to talk about a possible bonus or salary increases for employees during or after the pandemic. However, he stressed that pandemic-related expenses would fall to $ 2 billion in the quarter.
Despite the global economic slowdown, people continued to bet on buying Apple devices en masse.
Apple said sales increased 11% to $ 59.7 billion and profits increased 12% to $ 11.25 billion. Both numbers easily exceed analysts’ expectations, with Wall Street predicting declines in both areas.
Sales were particularly strong for iPads and Mac computers, as teleworking became a reality for many workers. Revenue has also increased in the Internet services business, which includes cutting Apple sales on the App Store, the subject of “antitrust” investigations in the United States and Europe.
Even the iPhone, which remains the company’s best-selling product, has seen a slight increase in sales, only for the second time in the past seven quarters.
Apple also announced a stock split on Thursday that would quadruple the number, allowing people to buy a company share for a quarter of the current share price, which closed at $ 384.76 on Thursday.
Google’s parent company Alphabet reported its first decline in quarterly revenue, affected by a slowdown in advertising by other companies. The company posted revenue of $ 38.3 billion and a profit of $ 6.96 billion – significantly higher than Wall Street analysts had predicted.
Alphabet’s chief financial officer, Ruth Porat, said advertising revenue “gradually improved” over the course of the quarter. The decline came in large part from the drop in sales of ads that run alongside search results on Google, but the company’s efforts to diversify its business have paid off as revenue from YouTube ads and the computing business in cloud increased.
Pichai said the company would have to learn to live with the investigations. “The scrutiny will continue here. We are committed to working with this new reality, ”he said.
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