The coronavirus crisis could cause widespread economic turmoil around the world, but the world’s largest technology companies are thriving.
Amazon̵7;s sales rose 40% in the three months ended June, while Apple saw a sharp increase in purchases for its iPhones and other hardware.
On Facebook, the number of people on their platforms, including WhatsApp and Instagram, has grown by 15%.
Profits come when companies face control of their size and strength.
At a hearing in Washington on Wednesday, lawmakers grilled companies over whether they were abusing their dominance to suppress rivals, noting a stark contrast between their wealth and many other companies.
Their positions are likely to be further strengthened as the pandemic shifts more and more online, said David Kicilline, a Democrat who leads the committee.
“Before the coronavirus pandemic, these corporations already excelled in our economy as titans,” he said.
“After the COVID-19 project, however, they are likely to emerge stronger and stronger than ever before.”
Profits were not a surprise to analysts – although how many companies did it were.
Amazon’s quarterly profit of $ 5.2 billion (GBP 4 billion) was the largest since the company’s inception in 1994, despite high spending on protective equipment and other virus-related measures.
“This is an exceptional quarter on all fronts in extreme circumstances,” Moody’s vice president Charlie O’Shea said of the rise of the Amazon stock market.
What were the results?
The company’s e-commerce sales for the three months ended June 30 rose 40% to $ 88.9 billion (GBP 67.9 billion) – the strongest year-over-year growth in recent years. Profit rose to $ 5.2 billion from $ 2.6 billion in the same period in 2019.
The flood of online shopping has limited the company’s capacity. Amazon has hired about 175,000 people this quarter and is working to expand its warehouse space in anticipation of continued growth.
“We have reached a gap,” CFO Brian Olsavsky said in a call with analysts about the results.
Apple, meanwhile, said quarterly revenue rose 11 percent year over year to $ 59.7 billion.
The transition to teleworking and school has helped increase demand for new devices, such as Macs and iPads, which have made double-digit profits. Profit was $ 11.25 billion, from $ 10 billion in the same period last year.
Apple said the release of the low-cost iPhone SE in April helped boost sales and put giant electronics in a better position, despite the financial impact of the coronavirus crisis.
“The last few months have highlighted the importance of users – including homes – owning higher quality equipment, connections and services,” said Paolo Pescatore, a technology analyst at PP Foresight. “Apple broke it.”
Facebook revenue grew 11% – slower than in other quarters – but was still ahead of analysts’ expectations as advertising held better than expected. The company earned nearly $ 5.2 billion in the quarter.
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The resilience was helped by an increase in the number of users that made the company attractive to advertisers, said Sophie Lund-Yates, a stock analyst at Hargreaves Lansdown.
The company said that on average, 2.4 billion people were active on its social media platforms and messaging applications in June, 15% more than last year. This included almost 1.79 billion active Facebook users, up 12% year-on-year.
As the locks eased, Facebook said it was “showing signs of normalization in user growth and engagement,” warning that the numbers could catch up or fall in the coming months.
Ms Lund-Yates said the company remained vulnerable to social and political pressures that could push users away just as quickly.
“But this is not the first time Facebook has gone through regulatory or social speeds and has deep pockets to solve problems,” she said.
The alphabet owned by Google and YouTube was the weakest of the four.
The search giant said revenue was $ 38.3 billion, down 2% from a year ago when businesses cut advertising spending.
This was the first year-over-year decline in quarterly revenue for the search giant as Google became a listed company in 2004.
Profit fell about 30% year-on-year to about $ 7 billion. But even these falls failed to captivate analysts who expected damage.
“We expected April to be at the bottom of the digital advertising market, returning to growth in May and June, and these results suggest that the acceleration was stronger than expected,” said Nicole Perrin, chief eMarketer analyst.