On Wednesday, CEOs from four of the world's biggest and most powerful technology companies testified before a US House of Representatives subcommittee looking into antitrust issues in the sector. On Thursday, one of them - Amazon - demonstrated the extent to which its economic fortunes have been buoyed by the pandemic.
Amazon said yesterday that its second quarter revenue was up 40 percent to $88.9 billion, with profit doubling to $5.2 billion, driven by pandemic-induced demand that stressed even its systems.
The Wall Street Journal notes that profits increased despite "coronavirus-related costs, hiring hundreds of thousands of workers, increasing pay and taking dozens of steps to ensure warehouse safety after facing early criticism from some employees. Amazon’s workforce now exceeds 1 million people and it is the second-largest employer in the U.S."
The other thee companies also reported quarterly numbers.
From the Wall Street Journal:
• "The global pandemic dealt a rare losing hand to Google’s venerable digital advertising operation, pushing revenue down compared with a year earlier for the first time in company history … Google’s parent, Alphabet Inc., reported advertising revenue of $29.9 billion for the second quarter. That metric, which includes ads on Google’s own properties as well as those placed on other websites, fell short of the $32.5 billion haul a year earlier."
• "Facebook brought in $18.7 billion in revenue in the quarter, up from $16.9 billion a year earlier and beating analyst expectations of $17.34 billion, according to data from FactSet. The 11% growth is a sharp deceleration from the average gains of nearly 25% annual growth that the company had posted over the last four quarters. Earnings rose to $5.18 billion, or $1.80 a share, compared with the $3.96 billion, or $1.39 a share, expected by analysts."
And from CNBC:
• "Apple reported a historically strong quarter on Thursday, including $59.7 billion in revenue and double-digit growth in its products and services segments, blowing away analyst estimates in a period deeply impacted by the coronavirus pandemic. The company also announced it plans to give investors three additional shares of Apple per share already owned at the end of August as part of a 4-1 stock split.
"Apple saw widespread retail closures during the quarter, especially in the United States, but touted both work-from-home trends and strong online sales as delivering a boost to overall operations."
- KC's View:
I see those numbers, and I keep thinking about how each of these companies' CEOs kept saying, almost plaintively, to the subcommittee, words to the effect of, "We're not really that big."