(Bloomberg) – The biggest US tech companies are booming in a pandemic that has increased dependence on their products and services, while destroying much of the rest of the economy. Quarterly results from Apple Inc., Amazon.com Inc., Facebook Inc. and Alphabet Inc. on Thursday show that the industry is capitalizing on the crisis as closed consumers use technology tools and the internet for entertainment, social networking, shopping, learning and work.
Together, the four companies reported $ 206 billion in revenue and $ 29 billion in net income in the three months to the end of June.
“Right now, it’s the tech world and everyone else pays the rent,” said Wedbush Securities analyst Dan Ives. “They are consumer producers now and this crisis has bought their growth forward for about two years.”
The results of the four companies were hit a day after their leaders faced congressional hearings on whether they had broken antitrust rules and needed to be re-evaluated. On Friday, most of them saw an increase in their shares. Apple and Facebook broke records with the iPhone maker’s market rating briefly surpassing Saudi Arabia Saudi Arabia Co., Amazon gained as much as 6.4%. Google alone increased this trend, sliding 4.3%.
Apple executives were quick to understand how their strong results countered with an economic collapse that has caused millions of job losses, hundreds of thousands of deaths and many bankruptcies.
Earlier Thursday, U.S. government officials reported that gross domestic product contracted by the majority on record – 32.9% on an annual basis – and 17 million Americans claimed unemployment state benefits in mid-July.
“We are aware of the fact that these results lie in severe relief during a time of real economic disaster for businesses, large and small, and of course for families,” CEO Tim Cook said in a conference call. “We do not have a zero approach to prosperity, and especially in cases like this, we are focused on raising the pie, making sure our success is not just our success.”
Cook cut his usual share of praise for his company’s quarterly performance and instead devoted much of his written time to calling to discuss things like a partnership that controls contact with Google, putting on masks and designing a face shield for medical staff.
The numbers paint a clear picture, however. IPad and Mac sales grew in demand from people who work and study from home. Mac had its second strongest quarter ever, while the iPad had its best quarter in June in eight years, Cook noted in an interview with Bloomberg TV.
Amazon posted a record quarterly profit as people avoided fragmented physical stores online. Unit sales at the largest online retailer grew 57%, the fastest growth rate since the company began exploding that metric.
“The penetration of e-commerce is accelerating,” said Hari Srinivasan, a senior analyst with Neuberger Berman. Amazon a major beneficiary of the shift, and “the changes are here to stay,” he added.
Amazon executives, in releasing profits and in conference calls with analysts and the media, did not go out of their way to seek the company’s record sales and profits. Instead, they highlighted hiring the company during the pandemic, as well as investing in employee safety.
A day after testifying to Congress about Amazon’s sometimes harsh treatment of small retailers, CEO Jeff Bezos noted in a statement that such retailers saw faster growth than Amazon’s own retail operation.Facebook reported better results than expected in part because so many small and medium-sized businesses are moving online now to survive, said chief operating officer Sheryl Sandberg.
“A lot of businesses are struggling, but at the same time businesses have to go online,” she added. “We become a place where you can create a website, set up a digital store.”
The company reported that it has more than 9 million advertisers, and over 180 million small businesses using free parts of its service, such as a Facebook or Instagram profile.
CEO Mark Zuckerberg took the spot where he left in Wednesday’s antitrust session, referring to the tech industry as an “American success story.” But he also targeted President Donald Trump for the second time this month.
“It’s extremely disappointing because it looks like the United States could have avoided this increase in cases if our government had handled this better,” Zuckerberg said.
Google Alphabet was the only major tech company to report a significant impact from the pandemic on Thursday. Revenues fell for the first time as advertisers spent less. The company is highly exposed to the travel and retail industry, which have been particularly hard hit by the crisis.
Still, other parts of Google’s business performed well. Sales in Google’s cloud business jumped to 43%, while YouTube ad revenue rose 6% as more people watched online videos at home.
CEO Sundar Pichai expressed concern about a regulatory crackdown on Google, which is facing an imminent antitrust case from the Justice Department.
“We have been clearly operating under control for a while,” he said. “We understand, to our degree, this is appropriate.”
(Stock updates in the fifth paragraph)
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