Tech giants defy the corona crisis with billions in profits

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In an unusual constellation, four tech heavyweights presented their quarterly figures in one day. Everyone exceeded expectations – even if one experienced the first drop in sales.

San Francisco (dpa) – The business of the big tech companies shows enormous resilience in the corona crisis. Amazon benefited massively from the online shopping boom in the past quarter, Apple surprised with a plus in the iPhone business.

Online advertising is less rosy: Google recorded a drop in sales for the first time and Facebook grew significantly slower than usual. But all four industry giants continued to make billions in profits and exceeded market expectations.

Amazon clearly stands out as the winner of the crisis from the other tech heavyweights. Revenue soared 40 percent year-over-year to $ 88.9 billion in the second quarter, the world’s largest online retailer announced on Thursday after the U.S. closed. At $ 5.2 billion, the profit was about twice as high as a year earlier – even though Amazon spent $ 4 billion on corona measures such as protective equipment, cleaning and employee bonuses in the quarter.

In addition to online trading, the cloud platform AWS also remained a lucrative business for Amazon – among other things because the increased number of homeworkers increases demand. The Amazon share rose in pre-exchange trading on Friday by more than five percent.

At Apple, iPhone sales rose 1.7 percent year over year to $ 26.4 billion. Analysts had only expected $ 21 billion in revenue. According to calculations by the analysis company IDC, Apple also managed to increase iPhone sales by a good 11 percent – while the smartphone market slumped overall by 16 percent, which was the most violent slump in the industry to date. Apple helped, among other things, the reissue of the cheaper model iPhone SE.

Apple’s consolidated revenue grew 11 percent to $ 59.7 billion in the past quarter – a record for the June quarter. Profits increased 12 percent to $ 11.25 billion. At the same time, Apple announced that the new iPhone models will not go on sale this year in September as usual, but “a few weeks later”. This had been speculated since spring in view of the effects of the corona crisis on the manufacturing chain. Apple’s stock rose by around six percent on Friday.

Meanwhile, Facebook’s business is growing significantly slower than before amid the corona crisis and a boycott of advertising customers in protest against hate speech on the platform. Last quarter, sales increased 11 percent to $ 18.8 billion. There was similar growth in the first weeks of July. Before the crisis, growth rates of over 20 percent were the order of the day in Facebook’s business. The stock gained around six percent pre-exchange.

Facebook earns its money almost exclusively from advertising – and the corona crisis hit many small companies in particular, which as a result place fewer ads. In July, more than 1,000 advertisers – including heavyweights like Coca-Cola and the consumer goods giant Unilever – followed the boycott calls by civil rights groups and temporarily stopped ads on the world’s largest online network.

At the same time, the number of users on Facebook continues to grow rapidly. Another 100 million monthly active users were added in the past quarter – now there are a total of 2.6 billion. 3.14 billion users accessed at least one Facebook product – the group also includes the Instagram photo platform and the WhatsApp chat service. That was an increase of 150 million within three months. However, Facebook warned that the growth in user numbers will likely slow down if the restrictions on going out in different regions of the world are relaxed.

Meanwhile, Google’s parent company Alphabet was hit by higher costs and falling advertising revenue. Profits plummeted from $ 9.95 billion to $ 6.96 billion year on year. Alphabet’s money machine – Google’s advertising business – suffered in the crisis. For the first time in the company’s 22-year history, revenue decreased 8 percent to $ 29.9 billion. Alphabet CFO Ruth Porat, however, emphasized that the advertising business had recovered at the end of the quarter. The Alphabet share only rose by a comparatively meager 0.62 percent on Friday.

The four technology giants released their numbers the day after a US House of Representatives hearing at which MPs accused companies of abuse of market dominance and promised tougher regulation.

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