Amazon, Alphabet, Facebook Post Strong Profits; Apple sees a slump in income

Big tech powerhouses delivered robust quarterly earnings reports on Thursday that considered the needs of pandemic-hit consumers as a closer look at their economic stamina.

Profits for Facebook, Amazon, and Google Parent Alphabet rose while Apple saw a slight decline in profits due to weak iPhone sales.

The results, which showed a combined profit of $ 38 billion (approximately Rs.282,074) for the four companies, underscored the massive economic power of the tech companies that have managed to fight the global coronavirus pandemic better than most companies .

However, critics say they are too big and too powerful.

The US authorities have filed an antitrust complaint against Google and are reportedly considering action against Facebook.

In the meantime, lawmakers have tightened attacks on social media companies for dealing with political content and “hate speech”.

“Even the strongest free speech advocates don’t believe you should shout ‘fire’ in a crowded theater,” said Mark Zuckerberg, CEO of Facebook, on a call for earnings.

“Our policies seek to balance freedom of expression and security.”

Zuckerberg reiterated that he was in favor of regulation when it comes to deciding what to allow on social media, but feared poorly crafted laws could undermine online platforms.

“I am concerned that some proposals, particularly in the EU, and actions planned by platform companies like Apple, could have a significant negative impact on small businesses and the economic recovery in 2021 and beyond,” Zuckerberg said.

Sundar Pichai, CEO of Alphabet, said during a call for earnings that the tech giant is confident that the platform’s popularity comes from delivering a valued service without abusing market power.

Holiday business early?

Amazon’s third-quarter earnings tripled year over year to $ 6.3 billion (approximately Rs.46,764 billion) due to strong retail sales and growth in cloud computing. Revenue soared 37 percent to $ 96 billion (approximately Rs.7.12.824 billion) for the tech and retail giant.

Amazon’s shares fell around one percent in over-the-counter trading after the results, as the outlook for the vacation quarter turned out to be weaker than expected.

“There is no doubt that Amazon’s latest results continue to be a winner of the disruption caused by the pandemic,” said Neil Saunders of research firm GlobalData.

But Saunders said growth was slower than in recent quarters as rivals increased competition and that “Amazon’s stake in the wallet has decreased somewhat”.

Amazon executives said they are pushing sales and delivery operations for a year-end blockbuster online shopping season.

The company advised those planning to shop online during the holidays to take care of it early to ease the pressure on delivery processes that are stretched thin.

Online advertising is recovering

Facebook’s earnings rose 29 percent to $ 7.8 billion (roughly Rs.57.916 billion) for the quarter as the social network saw the online ad market rebound despite an advertising boycott about how to deal with abusive content.

Revenue rose to $ 21.2 billion (around Rs.1.57.415 billion) as Facebook continued to benefit from people who rely on the internet to stay connected amid the pandemic.

“Facebook has recovered well from both early pandemic advertisers when marketers ran ads across all media to repeat messaging or save money, and from the ad boycott in July,” said Debra Aho Williamson, an analyst at eMarketer.

“Despite the challenges of campaigning and content moderation, it remains a one-stop shop for advertisers,” she continued.

Google parent company Alphabet announced that its profits rose to $ 11.2 billion (around Rs 83.162 billion) in the most recent quarter, which was also boosted by a rebound in digital advertising.

The money from cloud computing offerings and from the Google Play shop for smartphones with Android software also helped drive revenue for the quarter by 42 percent to $ 46.2 billion (approximately Rs.3.43.125 billion). rose.

“None of the political machinations made a difference,” said Patrick Moorhead analyst of Moor Insights and Strategy. “We had a Facebook boycott and a lot of government control over Google. Digital advertising is back.”

Ruth Porat, CFO, said blockbuster revenue for the quarter was driven by an increase in ad spend on Google’s search engine and video streaming platform YouTube.

Slow to 5G?

Apple, the richest member of the quartet with a market value of nearly $ 2 trillion (approximately 1.48,53,900 billion rupees), had the group’s most disappointing results.

Apple’s profits fell 7 percent to $ 12.7 billion (around Rs 94.319 billion).

Total revenue for the tech giant rose to $ 64.7 billion (around Rs.4.80.510 billion) for the quarter year over year, but revenue from iPhone sales, Apple’s top income driver, declined around 20 percent year over year and troubled investors.

Apple’s revenue in its important Greater China market, where 5G capabilities play a role in smartphone purchase decisions, fell nearly 25 percent to $ 7.9 billion (roughly Rs 58,671 million).

Apple has just introduced its first 5G models in a new iPhone 12 range.

China is a market that is “hardest hit by the absence of the new iPhones in the quarter,” said Apple CEO Tim Cook in a call for earnings.

The company’s share price fell more than four percent in after-hours trading.

“Financial performance aside, I don’t think this year will be a time that any of us can look back on with great fondness or nostalgia,” said Cook.


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