The coronavirus crisis could be causing widespread economic disruption worldwide, but the world’s largest technology companies are thriving.
Amazon sales soared 40% in the three months ending June, while Apple saw an increase in purchases of its iPhones and other hardware.
On Facebook, the number of people on their platforms, which include WhatsApp and Instagram, increased by 15%.
Profits occur when companies face scrutiny over their size and power.
At a hearing in Washington on Wednesday, lawmakers questioned companies about whether they were abusing their dominance to nullify their rivals, pointing to the stark contrast between their fortunes and many other companies.
Their positions are likely to be further strengthened as the pandemic fuels even more online activity, said Congressman David Cicilline, the Democrat who heads the committee.
“Before the coronavirus pandemic, these corporations already stood out as titans in our economy,” he said.
“However, following COVID-19, they are likely to emerge stronger and more powerful than ever.”
The gains were not a surprise to analysts, although how well many of the companies did.
At Amazon, the quarterly profit of $ 5.2 billion (£ 4 billion) was the largest since the company’s inception in 1994 and came despite heavy spending on protective gear and other measures due to the virus.
“This is an exceptional quarter on all fronts in extreme circumstances,” Moody’s Vice President Charlie O’Shea said of Amazon’s box office success.
What was the results?
The e-commerce company’s sales increased 40% during the three months ending June 30 to $ 88.9 billion (£ 67.9 billion), its highest year-on-year growth in years. Profits increased to $ 5.2 billion from 2.6 billion for the same period in 2019.
The avalanche of online shopping has exhausted the company’s capacity. Amazon hired some 175,000 people in the quarter and is working to expand its warehouse space in anticipation of continued growth.
“We have run out of space,” Chief Financial Officer Brian Olsavsky said in a call with analysts about the results.
Meanwhile, Apple said quarterly revenue increased 11% yoy to $ 59.7 billion.
The switch to remote and school work helped drive demand for new devices, such as Macs and iPads, both of which had double-digit gains. Profits reached $ 11.25 billion, compared to $ 10 billion in the same period last year.
Apple said the launch of the low-cost iPhone SE in April had helped boost sales and put the electronics giant in a better position, despite the financial impacts of the coronavirus crisis.
“The past few months have underlined the importance of better quality devices, connections and services for users, and homes alike,” said Paolo Pescatore, technology analyst at PP Foresight. “Apple broke it.”
On Facebook, revenue rose 11%, slower than in other quarters, but it still exceeded analyst expectations as advertising remained better than expected. The company’s earnings reached nearly $ 5.2 billion for the quarter.
The resistance was helped by a surge in users, making the company attractive to advertisers, said Sophie Lund-Yates, equity analyst at Hargreaves Lansdown.
The firm said 2.4 billion people were active on its social media platforms and messaging apps on average in June, up 15% from last year. That included nearly 1.79 billion daily active users on Facebook, up 12% year-over-year.
As the blockades were reduced, Facebook said it was “seeing signs of normalization in growth and user engagement,” warning that those numbers could flatten or decrease in the coming months.
Ms Lund-Yates said the company also remains vulnerable to social and political pressure, which could quickly push users away again.
“But this is not the first time that Facebook has regulatory or social barriers to browsing, and it has deep pockets to troubleshoot,” he said.
Google offices in New York City closed to prevent looting in June
Alphabet, which owns Google and YouTube, was the weakest of the four.
The search giant said revenue was $ 38.3 billion, down 2% from a year ago, as companies cut advertising spending.
It was the first annual decline in quarterly revenue for the search giant, as Google became a publicly traded company in 2004.
Profits fell 30% yoy to approximately $ 7 billion. But even those falls did not affect analysts, who expected damage.
“We expect April to be the bottom of the digital advertising market, with a return to growth in May and June, and these results suggest the acceleration was stronger than expected,” said Nicole Perrin, principal analyst at eMarketer.
