(Bloomberg) – America’s largest technology companies are thriving in a pandemic that has increased dependence on their products and services, while affecting the rest of the economy. Quarterly results from Apple Inc., Amazon.com Inc., Facebook Inc and Alphabet Inc. showed Thursday that the industry is capitalizing on the crisis as blocked consumers use technology devices and the Internet for entertainment, social networking, shopping, learning and job.
Together, the four companies reported revenue of $ 206 billion and net revenue of $ 29 billion in the three months ending in late June.
“Right now, it’s the world of big technology and everyone else is paying the rent,” said Dan Ives, an analyst at Wedbush Securities. “They are now consumer staples and this crisis has fueled their growth in about two years.”
The results of the four companies came a day after their leaders faced congressional hearings on whether they had violated antitrust rules and whether they should be controlled. On Friday, most of them saw an increase in their shares. Apple and Facebook hit records with the iPhone maker’s market valuation that briefly surpassed Saudi Arabian Oil Co. Amazon gained as much as 6.4%. Only Google broke the trend, falling 4.3%.
Apple executives quickly realized how its good results contrasted with an economic collapse that has caused the loss of millions of jobs, hundreds of thousands of deaths and many bankruptcies.
Earlier Thursday, US government officials reported that gross domestic product was the most contracting in history (32.9% annualized) and 17 million Americans claimed state unemployment benefits in mid-July.
“We are aware of the fact that these results are a great relief during a time of real economic adversity for companies, large and small, and certainly for families,” Chief Executive Officer Tim Cook said in a conference call. “We don’t have a zero-sum prosperity approach, and especially at times like this, we are focused on growing the cake, making sure that our success is not just our success.”
Cook cut his usual litany of praise for his company’s quarterly performance and instead spent much of his scheduled time on the call discussing things like a Google contact tracking partnership, rolling out skins, and designing a facial protector for medical workers.
However, the numbers paint a clear picture. IPad and Mac sales increased on demand from people who work and study from home. The Mac had its strongest second quarter, while the iPad had its best June quarter in eight years, Cook said in an interview with Bloomberg TV.
Amazon posted a record quarterly profit when people avoided physical stores that shop online. Unit sales at the largest online retailer increased 57%, the fastest growth rate since the company began to break that metric.
“The penetration of e-commerce is accelerating,” said Hari Srinivasan, senior analyst at Neuberger Berman. Amazon is one of the main beneficiaries of the change, and “the changes are here to stay,” he added.
Amazon executives, in publishing the results and in conference calls with analysts and the media, made no effort to promote the company’s record sales and profits. Instead, they highlighted hiring the company during the pandemic, as well as investments in employee safety.
A day after testifying before Congress about Amazon’s sometimes harsh treatment of small merchants, CEO Jeff Bezos said in a statement that those sellers saw faster growth than Amazon’s own retail operation. Facebook reported better-than-expected results in part because many small and medium-sized companies are moving online right now to survive, chief operating officer Sheryl Sandberg said.
“Many companies are struggling, but at the same time companies have to swing online.” “We became a place where you can set up a website, set up a digital store.”
The company reported that it has more than 9 million advertisers and more than 180 million small businesses that use the free parts of its service, such as a Facebook or Instagram profile.
CEO Mark Zuckerberg picked up where he left off at Wednesday’s antitrust hearing, referring to the tech industry as an “American success story.” But he also targeted President Donald Trump for the second time this month.
“It is incredibly disappointing because it looks like the United States could have avoided this current increase in cases if our government had handled this better,” said Zuckerberg.
Alphabet’s Google was the only major technology company to report a noticeable impact from the pandemic on Thursday. Revenue fell for the first time as advertisers spent less. The company is highly exposed to the travel and retail industries, which have been particularly affected by the crisis.
Still, other parts of Google’s business performed well. Sales in Google’s cloud business increased 43%, while YouTube advertising revenue increased 6% as more people watched online videos at home.
CEO Sundar Pichai played down concerns about a regulatory crackdown at Google, which faces an impending Justice Department antitrust case.
“Obviously we have been operating under scrutiny for a while,” he said. “We realize, on our scale, that it is appropriate.”
(Updates with actions in the fifth paragraph)
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