Monday, 03 August, 2020

United States stocks up as strong tech earnings offset stimulus fog

Facebook CEO Mark Zuckerberg speaks via video conference during the House Judiciary Subcommittee on Antitrust Commercial and Administrative Law hearing on Online Platforms and Market Power in the Rayburn House office Building Facebook surge leads tech megacaps higher, but Alphabet stumbles
Ginger Lawrence | 01 August, 2020, 01:07

Because literally a day after a meeting attempting to determine if Big Tech was too big, three of the four companies in the hearing got bigger.

A pandemic-hit period, ad boycotts and probes over anti-competition practices, data privacy and security did not stop the four Big Tech firms (Amazon, Apple, Facebook and Alphabet with a combined market cap of almost USD5 trillion) from posting healthy profits in the June quarter.

In the latest quarter, Apple posted revenue of $59.7bn, an increase of 11pc from the same quarter past year.

The California tech giant saw a modest increase in iPhone sales, with more significant rise for accessories and services such as its apps and digital content.

"We're working to help people, businesses and communities in these uncertain times", said Sundar Pichai, Chief Executive Officer of Google and Alphabet.

Analyst Daniel Ives at Wedbush Securities said the results show momentum for Apple as it readies its new iPhone 12.

Amazon meanwhile said profits almost doubled to 5.2 billion USA dollars on sales that climbed 40 percent to 88.9 billion US dollars.

"This was another highly unusual quarter, and I couldn't be more proud of and grateful to our employees around the globe", said Jeff Bezos, Amazon founder and CEO.

New documents released on Ghislaine Maxwell's dealings with Jeffrey Epstein
She was arrested on July 2 at a home in New Hampshire where prosecutors said she had been hiding out. He suggested she go outside and hold her head high, "not as an (escaping) convict".

Amid rising sales in its grocery, video and cloud computing operations, Amazon has told investors it expects to spend all its profits this year on costs related to keeping employees and customers safe during the pandemic.

Riding on surging online sales during the pandemic as people stayed home, Amazon reported a 40 per cent increase in net sales to USD88.9 billion, compared with USD63.4 billion in the same period a year ago. Net profit for the company doubled to reach $5.2bn, from $2.6bn the year prior, which far exceeded analyst expectations.

Alphabet, the parent company of Internet giant Google, posted $ 38.3 (38.94) billion in revenue in the second quarter, slightly less than a year earlier, but remained well above the analyst estimate of $ 37.37 billion.

Williamson said she believes Instagram "has played a major role in Facebook's ability to withstand the effects of the pandemic", even though details from the platform were not disclosed.

Alphabet shares were up less than 1 per cent after the Q2 earnings report. A big sum. The market value of the four companies on Wall Street rose by $ 250 billion.

Revenues dipped two percent to 38 billion USA dollars, as chief financial officer Ruth Porat said: "We continue to navigate through a hard global economic environment". "As people increasingly turn to online services, our platforms - from Cloud to Google Play to YouTube - are helping our partners provide important services and support their businesses".

Members of Congress scored some direct hits against big tech CEOs at Wednesday's antitrust hearing, in an intense series of exchanges lasting more than five hours. "Some need to be broken up, all need to be heavily regulated".