Amazon and Google reported strong quarterly sales and profits during debate on market sway
According to The Wall Street Journal, the financial results announced Thursday, which also included record revenue at Facebook Inc., illustrated again how increased remote working and living has elevated use of everything from online retail and social media to cloud-computing services and digital advertising—accelerating shifts in consumer and business behavior that are expected to continue beyond the Covid-19 pandemic.
Amazon, which had delivered record sales in the second quarter of the year, topped that level in the three months through September, with revenue soaring 37% to a record $96.2 billion WSJ notes. Profit nearly tripled to $6.3 billion, propelled by strong online sales as well as digital advertising and growth in its lucrative cloud-computing arm.
Amazon expects sales to be between $112 billion and $121 billion during its final quarter of the year and operating income to be between $1 billion and $4.5 billion, including approximately $4 billion of costs related to the coronavirus.
Amazon’s (AMZN) stock was down nearly 1% during after-hours trading. Heading into Thursday, Amazon’s stock had rallied more than 70% this year.
“We’re seeing more customers than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season,” Amazon Chief Executive Jeff Bezos said.
Facebook, owner of Instagram and WhatsApp, reported a whopping 2.5 billion daily users on average in September across its platforms. That’s up 15% from September a year ago – but only a 3% rise from June, when people stuck-at-home turned to social media, generating a flood of activity.
According to BBC, Apple sales hit $64.7bn, up slightly from a year ago – handily beating most analyst expectations, as sales of laptops and iPads surged.But shares in the firm sank in after-hours trading anyway, as investors digested a more than 20% drop in iPhone revenue. The hit was especially evident in Apple’s Greater China region – where it typically generates about 20% of its sales and sales dropped almost 30%. Apple expressed confidence that buyers were simply holding out for its latest phone, which went on sale later than in prior years.
“Despite the ongoing impacts of Covid-19, Apple is in the midst of our most prolific product introduction period ever, and the early response to all our new products, led by our first 5G-enabled iPhone line-up, has been tremendously positive,” chief executive Tim Cook said.
As BBC says, amid the shutdowns earlier this year, many businesses cut advertising spending. The move led sales to slow at Facebook and pushed Alphabet, the parent company of Google and YouTube, to its first year-on-year decline in quarterly revenue since becoming a publicly-listed company in 2004. But spending from those businesses has returned.
According to BBC, at Google, revenue was up 14% year-on-year – far better than analysts had expected. The rise helped profits jump an eye-popping 59% year-on-year to more than $11bn, sending the firm’s shares up more than 6% in after-hours trading.
Twitter also saw revenue rise 14%, while at Facebook it jumped 22% and the firm said it expected that growth to accelerate.