Amazon’s sales and profit soared in the latest quarter as shoppers turned to the online giant to deliver goods to their homes in the pandemic.
Four other 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 four— 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.
Here’s a look at the results:
- AMAZON
Amazon said Thursday sales grew 37% to $96.1 billion during the three months ended September 30, and profit increased 197% to $6.3 billion compared with the same period last year, beating analyst forecasts. The results do not include Amazon’s Prime Day event, which took place October 13-14 this year after being postponed over the summer because of the pandemic.
In North America, sales grew 39%, while international sales increased 37%. Revenue from Amazon Web Services, the company’s cloud computing business and largest profit driver, grew 29%.
Amazon expects sales to be between $112 billion and $121 billion during its final quarter of the year and operating income to be between $1 billion and $4.5 billion, including approximately $4 billion of costs related to the coronavirus.
Amazon opening its ‘4-star’ store today at Raleigh’s Crabtree Valley Mall
Amazon’s stock was down nearly 1% during after-hours trading. Heading into Thursday, Amazon’s stock had rallied more than 70% this year.
Amazon has strengthened its position during the pandemic, drawing existing Prime members to its platform more frequently and adding new subscribers.
Amazon’s core Prime shoppers skew higher income, which make them less susceptible to job losses stemming from the pandemic and a new stimulus bill not being passed in Congress, analysts say. Prime shoppers are spending less on travel and other leisure activities than they did before the pandemic and have shifted their spending to electronics, kitchenware and other items.
Amazon’s growth comes at a time when the company is under scrutiny from lawmakers over concerns about its marketplace power, along with Facebook, Google and Apple. The House Judiciary Committee released a report earlier this month that found that “Amazon has engaged in extensive anticompetitive conduct in its treatment of third-party sellers” and other tactics that stifle competition. (Amazon has denied wrongdoing.)
- APPLE
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 7% 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.
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Apple’s stock dropped more than 4% in extended trading. Investors may have been jarred by a significant decline in iPhone sales, which plunged 21% 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.
- ALPHABET
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 14% from the same time last year to $46.2 billion. Its profit soared 59% to $11.2 billion, or $16.40 per share. Both figure easily surpassed analyst estimates, lifting Alphabet’s stock price by 9% 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 29% from $6.09 billion, or $2.12 per share, a year earlier. Revenue grew 22% 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 2.8%, to $273 in after-hours trading after the results came out. The stock had closed up nearly 5% at $280.83.
The social media giant’s average monthly user base was 2.74 billion as of Sept. 30, up 12% from a year earlier.
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 22% 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 14% to 936.2 million from $823.7 million.
Twitter had 187 million daily users, on average, in the third quarter. That’s up 29% from a year earlier, thanks to people signing up to follow U.S. 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 U.S. election and said it is “hard to predict how advertiser behavior could change.”
Twitter’s stock fell $6.06, or 11.6%, to $46.37 in after-hours trading. The stock had closed up $3.92, or 8.1%, at $52.43.
