Coronavirus: Tech giants report mixed results despite bright outlook

Coronavirus: Tech giants report mixed results despite bright outlook
Coronavirus: Tech giants report mixed results despite bright outlook

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Aden - Yasmine El Tohamy - Amazon, Google parent Alphabet, , Apple and Twitter exceeded analyst expectations, but gloomy forecasts led to share-price declines for all but Alphabet in after-market trading.

Five technology giants reported mixed earnings results Thursday, a sign of varying fortunes as they try to rebound from an pandemic-related economic slowdown earlier this year.

While all five — Amazon, Google parent Alphabet, Facebook, Apple and Twitter — exceeded analyst expectations, gloomy forecasts and other uncertainties led to share-price declines for all but Alphabet in after-market trading.

On Wednesday, the CEOs of Facebook, Google and Twitter testified before the Senate Commerce Committee, rebuffing accusations of anti-conservative bias and promising to aggressively defend their platforms from being used to sow chaos in next week’s election.


Apple didn’t get its usual late-September surge in sales from its latest iPhone models, but still managed to eke out a slight increase in revenue during the July-September quarter, although profits fell.

Production problems lingering from factory shutdowns during the onset of the pandemic led to the iPhone delay, although analysts expect it will bounce back with a huge quarter during the October-December quarter that includes the holiday shopping season.

Apple’s revenue rose to $64.7 billion. Analysts surveyed by FactSet Research had braced for a dip to $63.6 billion. Profit, meanwhile, dropped 7per cent from the year-ago quarter to $12.7 billion. But earnings per share amounted to 73 cents, above the average estimate of 70 cents among analysts polled by FactSet.

Apple’s stock dropped more than 4per cent in extended trading. Investors may have been jarred by a significant decline in iPhone sales, which plunged 21per cent from last year to $26.4 billion. Apple offset that erosion with strong sales of its services, including its music and streaming services, as well as its wireless ear buds and internet-connected watch.


Google’s corporate parent Alphabet returned to robust financial growth during the summer. In the previous quarter, it suffered its first-ever quarterly decline in revenue amid the economic slowdown stemming from the Covid-19 pandemic.

The company’s revenue for the July-September period rose 14per cent from the same time last year to $46.2 billion. Its profit soared 59per cent to $11.2 billion, or $16.40 per share. Both figure easily surpassed analyst estimates, lifting Alphabet’s stock price by 9per cent in Thursday’s extended trading after the numbers came out.

The rebound, as usual, was propelled by the ad spending that has established Google has one of the world’s most proficient moneymaking machines. But U.S. Justice Department is now seeking to throw a monkey wrench into Google’s financial gears in a recently filed lawsuit that accuses the company of abusing its dominance of search to boost its profits and stifle competition


Facebook said Thursday its third-quarter profit and revenue continued to grow along with its worldwide user base, but looking ahead to 2021 the company predicted a “significant amount of uncertainty.”

Facebook earned $7.85 billion, or $2.71 per share, in the July-September period. That’s up 29per cent from $6.09 billion, or $2.12 per share, a year earlier. Revenue grew 22per cent to $21.22 billion from $17.38 billion.

Analysts were expecting earnings of $2.18 per share on revenue of $19.80 billion, according to a poll by FactSet.

The Menlo Park, California-based company’s stock slipped $7.83, or 2.8per cent, to $273 in after-hours trading after the results came out. The stock had closed up nearly 5per cent at $280.83.

The social media giant’s average monthly user base was 2.74 billion as of Sept. 30, up 12per cent from a year earlier.


Amazon continued to benefit from shopping trends during the pandemic, reporting record profit and revenue during the third quarter. The company reported net income of $6.3 billion in the three months ending Sept. 30, nearly triple that of the previous-year period.

Earnings per share came to $12.37, about $5 more than Wall Street analysts expected. Revenue soared 37per cent to $96.1 billion, also beating expectations. Shares nevertheless fell 1.3per cent in aftermarket trading.

The online shopping giant is also expecting a big end to the year as the holiday shopping season picks up. Amazon said Thursday that it expects fourth-quarter sales to rise between 28per cent and 38per cent from a year ago to between $112 billion and $121 billion.

The last three months of the year are always Amazon’s biggest, due to the holidays. But this year, Amazon also held its Prime Day sales event during the quarter for the first time after postponing it from July to October due to the pandemic. Prime Day has become one of the company’s busiest shopping events of the year.

“We’re seeing more customers than ever shopping early for their holiday gifts,” said Amazon CEO and founder Jeff Bezos in a written statement. “Which is just one of the signs that this is going to be an unprecedented holiday season.”


Twitter posted much stronger than expected third-quarter results thanks to surging advertiser demand. But while its user base continued to grow, Wall Street grumbled and shares plunged after hours.

The San Francisco company earned $28.66 million, or four cents per share, in the July-September period. That’s down 22per cent from $36.5 million, or five cents per share, a year earlier, due to higher expenses in part related to Covid-19. Excluding one-time items, earnings were 19 cents per share.

Revenue grew 14per cent to 936.2 million from $823.7 million.

Twitter had 187 million daily users, on average, in the third quarter. That’s up 29per cent from a year earlier, thanks to people signing up to follow US politics and current events worldwide, but below analysts’ expectations of 195.6 million. The company no longer discloses monthly user figures.

Analysts were expecting a loss of 10 cents per share, adjusted earnings of 6 cents per share and revenue of $777.3 million, according to a poll by FactSet.

The company predicted uncertainty going forward, due in part to the upcoming US election and said it is “hard to predict how advertiser behaviour could change.”

Twitter’s stock fell $6.06, or 11.6per cent, to $46.37 in after-hours trading. The stock had closed up $3.92, or 8.1per cent, at $52.43.

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