(Bloomberg) – The largest U.S. technology companies are thriving in a pandemic that has increased dependence on their products and services, while hearing much of it from the rest of the economy. The most recent results from Apple Inc., Amazon.com Inc., Facebook Inc. and Alphabet Inc. on Thursday show that the industry is capitalizing on the crisis as captive consumers use technology and the internet for entertainment, social connection, shopping, learning and work.
Together, the four companies reported revenue of $ 206 billion and net income of $ 29 billion in the quarter ended in late June.
“Right now, it’s the world’s biggest technology and everyone is paying rent,” Wedbush Securities analyst Dan Ives said. “These are basic for consumers now and this crisis has bought their growth forward by about two years.”
The results of the four companies hit a day after their leaders faced congressional hearings on whether they violated antitrust rules and need to step in. On Friday, many of them saw an increase in their shares. Apple and Facebook rose to records with the iPhone maker’s market valuation briefly surpassing Saudi Arabia Oil Co. Amazon gained as much as 6.4%. Google just outperformed the trend, sliding 4.3%.
Apple executives quickly recognized how their strong results contrasted with an economic collapse that caused millions of job losses, hundreds of thousands of deaths and many failures.
Earlier Thursday, U.S. government officials reported the highest gross domestic product contracted on record – 32.9% on an annualized basis – and 17 million Americans declared state unemployment benefits in mid-July.
“We are aware of the fact that these results fit well during a time of real economic adversity for businesses, large and small, and certainly for families,” Chief Executive Officer Tim Cook said at a conference. “We don’t have a zero-sum approach to prosperity, and especially in times like this, we’re focused on growing the pie, making sure our success isn’t just our success.”
Cook cut back the usual litany of praise for his company’s quarterly performance and instead devoted much of his written time on the call to discussing things like Google’s contact tracking partnership, deployment of masks, and the design of a face shield for Medical Workers.
The numbers paint a clear picture, though. Sales from the iPad and Mac have increased on demand from people who work and study from home. The Mac had its second-strongest quarter ever, while the iPad had its best June quarter in eight years, Cook noted in an interview with Bloomberg TV.
Amazon posted a record quarterly earnings as people avoided physical stores that were bought online. Unit sales at the largest online retailer rose 57%, the fastest pace of growth since the company began breaking that metric.
“E-commerce penetration is accelerating,” said Hari Srinivasan, a senior analyst with Neuberger Berman. Amazon is a major beneficiary of the change, and “the changes are here to stay,” he added.
Amazon executives, in the earnings release and on conference calls with analysts and the media, have not left their way to point out the company’s record sales and profit record. Instead, they highlighted hiring the company during the pandemic, as well as investments in employee safety.
A day after testifying to Congress about Amazon’s sometimes harsh treatment of small business owners, Chief Executive Jeff Bezos noted in a statement that such retailers have seen faster growth than the retailer’s own retail operation. Amazon.Facebook reported better results than expected in part because so many small and medium-sized businesses are moving online right now to survive, said Chief Operating Officer Sheryl Sandberg.
“A lot of businesses are struggling, but at the same time businesses have to travel online,” she added. “Become a place where you can set up a website, set up a digital showcase.”
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.
Chief Executive Mark Zuckerberg picked up where he left off during the hearing on the antitrust, tech industry as an “American success story.” But he also targeted President Donald Trump for the second time this month.
“It’s incredibly disappointing because it seems the United States could have avoided this sharp rise in cases if our government had handled this better,” Zuckerberg said.
The Google Alphabet was the only major technology company to report a noticeable impact from the pandemic on Thursday. Revenue declined for the first time as advertisers spent less. The company is highly exposed to the travel and retail industries, which have been particularly hit by the crisis.
Still, other parts of Google’s business went well. Sales in Google’s cloud business jumped 43%, while advertising revenue on YouTube rose 6% as more people watched online videos at home.
Chief Executive Sundar Pichai has expressed concern over a regulatory response on Google, which is facing an impending antitrust case by the Justice Department.
“Obviously we have been operating under scrutiny for some time,” he said. “We realize, that’s appropriate,”
(Updates with shares in the fifth paragraph)
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