Blockbuster Big Tech earnings reports to culminate with Amazon

SAN FRANCISCO — A week of blockbuster earnings reports from Big Tech is expected to culminate Thursday (April 29) with Amazon revealing profits from pandemic-revved online shopping and reliance on cloud-hosted services.

The e-commerce colossus is among the internet giants whose businesses thrived as precautions against Covid-19 led people around the world to go online for work, school, shopping and socialising.

On Wednesday Apple and Facebook delivered soaring profits that essentially doubled over the previous year at US$23.6 billion (S$31 billion) and US$9.5 billion respectively.

Apple was lifted by strong gains in sales of iPhones and assorted products and services, while Facebook saw robust increases in digital advertising, reflecting people's rising internet usage during the ongoing pandemic.

The results followed what one analyst called a "monster" quarter for Google and its parent firm Alphabet, which along with Facebook dominates online advertising. They also come after a robust report from Microsoft, which is growing its cloud computing operations.

The latest round of results are likely to prompt more attention for the tech giants, which are facing scrutiny for their growing dominance, particularly with their services seemingly ready-made for locked-down consumers.

"The large tech companies are in the right place at the right time," said Dr Darrell West, a fellow at the Brookings Institution's Center for Technology Innovation.

"Covid has accelerated digital transformation in education, healthcare, remote work, and e-commerce and that has boosted the profitability of those firms. But there remains a backlash against the sector because people are worried about privacy, security and human safety."

The surging influence of Big Tech has led to calls for increased regulation, higher taxes and stronger antitrust enforcement to foster more competition.

"Leaders from a variety of different perspectives want tougher action and seeing the large profits is not going to ease the tension with those companies," Dr West said.

FACEBOOK GROWTH

Facebook reported its user ranks increased despite persistent criticism over its efforts to protect user privacy and stem misinformation.

The number of people using the leading social network monthly climbed 10 per cent to 2.85 billion, according to the Silicon Valley giant. And monthly usage of the "family" of Facebook apps including Instagram, WhatsApp and Messenger, was pegged at 3.45 billion.

"This has been an intense year," Facebook chief executive Mark Zuckerberg said on an earnings call.

"Over the past couple of quarters our business has been performing better than we expected."

The boosted earnings have given Facebook the confidence to increase investments in areas such as virtual and augmented reality that have the "potential to change the trajectory of the company over the long term," Mr Zuckerberg added.

On Tuesday, Alphabet said profit in the first quarter leapt to US$17.9 billion from US$6.8 billion in the same period a year ago while revenues jumped 34 per cent to US$55.3 billion, led by gains in advertising and cloud computing services.

"Google had an absolute monster quarter with ads leading the way," said Mr Patrick Moorhead at Moor Insights & Strategies.

Apple meanwhile said Wednesday revenue was the best ever for its fiscal second quarter, up 54 per cent to US$89.6 billion.

Revenue from iPhones jumped 65 per cent from a year ago to US$47 billion, reflecting strong demand for new iPhone 12 models.

Apple also reported gains in sales of iPads, Mac computers, wearables and accessories, and its array of services from digital payments to music.

"This quarter reflects both the enduring ways our products have helped our users meet this moment in their own lives, as well as the optimism consumers seem to feel about better days ahead for all of us," said chief executive Tim Cook.

"Apple is in a period of sweeping innovation across our product lineup, and we're keeping focus on how we can help our teams and the communities where we work emerge from this pandemic into a better world." AFP