As coronavirus crisis tears through corporate Britain, US tech titans are raking in £2bn a day
America’s technology titans are raking in nearly £2bn a day even as the coronavirus pandemic ravages the global economy, it was revealed last night.
In a blowout set of earnings, Amazon, Apple, Google, Facebook and Twitter all reported quarterly results within minutes of each other – unveiling combined revenues of £177billion and profits of £29billion for July to September.
The astonishing figures stand in stark contrast to the fortunes of many traditional businesses, which have been devastated by the Covid-19 crisis, as consumers flock online to buy goods and switch to working from home.
Making a fortune: Jeff Bezos – pictured with partner Lauren Sanchez
Perhaps no tech company has benefited from this trend as much as e-commerce giant Amazon, which said its third-quarter revenues rose 37 per cent to £74.3billion while profits trebled to £4.9billion.
As families under lockdown have turned to internet shopping, the firm’s sales have soared and its share price has surged 70 per cent.
That has in turn boosted the fortune of Amazon founder Jeff Bezos, the world’s richest man, from £89billion to £145billion this year.
And to help deal with the massive boom in demand, the 56-year-old’s company has taken on more than 175,000 temporary workers during the pandemic.
For the fourth quarter including the crucial Christmas period, the company predicts sales could rise by as much as 38 per cent to £93.5bn – an astonishing £1billion per day.
Bezos said: ‘We’re seeing more customers than ever shopping early for their holiday gifts, which is just one of the signs that this is going to be an unprecedented holiday season.’
However shares in Amazon dipped 1 per cent in after-hours trading as the company warned of higher-than-predicted costs related to Covid-19.
Shares in iPhone maker Apple also fell by more than 4 per cent as the firm reported a 1 per cent rise in revenues to £50billion and a 7 per cent drop in profits to £9.8billion.
This was slightly better than expectations but Apple did not offer any forecasts of sales for the festive season, leaving investors in the dark about how well the firm thinks its new iPhone 12 handset will sell. However the company reported a 21 per cent drop in iPhone revenues in the July to September quarter, worse than analysts had predicted, with strong sales of its Macbook computers and iPad tablets failing to make up for the decline.
Lots to like: Facebook’s Mark Zuckerberg
At the same time, Google parent Alphabet’s shares roared almost 8 per cent higher in post-session trading after the firm blew analysts’ expectations out of the water.
It reported a 14 per cent rise in third-quarter revenues to £35.7billion and a 60 per cent rise in profits to £8.7billion, significantly exceeding forecasts of £33.2billion and £6billion respectively. The company, which makes most of its income from digital ads, benefited from higher spending by businesses seeking to attract online shoppers over the summer as well as a 45 per cent rise in sales at its cloud computing division. Elsewhere, the return to higher advertising spending by businesses also buoyed the rival ad businesses of social networks Facebook and Twitter. Facebook reported a 22 per cent rise in revenues to £16.6billion and a 29 per cent rise in profits to £6.1billion.
It said daily users rose 12 per cent to 1.82billion during the quarter.
Twitter said its third-quarter revenues were up 14 per cent to £723.6m – well above the £601m predicted by analysts – but profits fell 21.5 per cent to £22m as the company took on more staff and ploughed more cash into research and development.
It pulled in some 187m daily users, an increase of 29 per cent from a year ago, with the additional eyeballs allowing it to make more money from advertising.