The coronavirus crisis may be causing widespread economic turmoil around the world, but the world’s largest tech firms are booming.
Sales on Amazon rose 40% in the three months to June, while Apple saw an increase in purchases of iPhones and other devices.
On Facebook, the number of people on its platforms, which include WhatsApp and Instagram, increased by 15%.
The gains come as firms face control over their size and strength.
At a hearing in Washington on Wednesday, lawmakers rallied companies if they were abusing their dominance over corrupt rivals, citing the stark contrast between their wealth and that of many other firms.
Their positions are likely to become even stronger as the pandemic pushes even more online activity, said Congressman David Cicilline, the Democrat who leads the committee.
“Before the coronavirus pandemic, these corporations already stood out as titans in our economy,” he said.
“In the wake of COVID-19, however, they are likely to emerge stronger and more powerful than ever before.”
The profits came as no surprise to analysts – though how good many of the firms were.
At Amazon, the $ 5.2bn ($ 4 billion) quarterly profit was the largest since the company began in 1994 and came despite huge spending on protective clothing and other measures due to the virus.
“This is an extraordinary quarter on all fronts in extreme circumstances,” Moody’s vice president Charlie O’Shea said of Amazon’s growing blocks.
What were the results?
The e-commerce firm’s sales rose 40% for the three months ended June 30 to $ 88.9bn (. 67.9bn) – its strongest year-on-year growth. Profits rose to $ 5.2 billion from $ 2.6 billion for the same period in 2019.
The flood of online shopping has strained the firm’s capacity. Amazon employed about 175,000 people on a quarterly basis and is working to expand its warehouse space in anticipation of continued growth.
“We have finished the space,” chief financial officer Brian Olsavsky said in a phone call to analysts about the results.
Apple, meanwhile, said quarterly revenue jumped 11% year-on-year to $ 59.7bn.
The shift to distance work and schooling helped push demand for new devices, such as Macs and iPads, both gained double digits. Profits totaled $ 11.25bn, up from $ 10 billion in the same period a year earlier.
Apple said the launch of the low-cost iPhone SE in April had helped boost sales and put the electronics giant in a better position, despite the financial impact of the coronavirus crisis.
“Recent months have highlighted the importance of users – and households alike – owning better quality equipment, connections and services,” said Paolo Pescatore, technical analyst at PP Forecast. “Apple destroyed it.”
On Facebook, revenue rose 11% – slower than in other quarters – but was still ahead of analysts’ expectations, as ads held better than expected. The firm’s profits totaled nearly $ 5.2 billion for the quarter.
- Can a Facebook boycott kill?
- Amazon v EU: Has the giant fulfilled his match online?
Resistance was helped by a rapid increase in users, which makes the firm attractive to advertisers, said Sophie Lund-Yates, a capital analyst at Hargreaves Lansdown.
The firm said 2.4 billion people were active on its social media platforms and messaging apps on average in June, up 15% from last year. That includes nearly 1.79 billion daily active Facebook users, up 12% year-on-year.
As blockages eased, Facebook said it was “seeing signs of normalization in user growth and engagement,” warning that those figures could flatten or fall in the coming months.
Ms Lund-Yates said the firm also remains sensitive to social and political pressure, which could just as quickly drive users away again.
“But this is not the first time there have been fast-paced, regulated or social Facebook movements, and there are deep pockets to solve problems,” she said.
The alphabet, which owns Google and YouTube, was the weakest of the four.
The search giant said revenue was $ 38.3 billion, 2% less than a year ago, as businesses cut advertising spending.
It was the first year-over-year drop in quarterly revenue for the search giant since Google became a publicly listed company in 2004.
Profits fell about 30% year-on-year to nearly $ 7bn. But even those declines failed to deceive analysts, who had expected damage.
“We expected April to be the end of the digital advertising market, with a rising return in May and June, and these results suggest the acceleration was stronger than expected,” said eMarketer chief analyst Nicole Perrin.