Big Tech companies reported mixed quarterly earnings Thursday, a day after their top executives faced a tough congressional grilling over market power and alleged monopolistic practices.
The economic fallout caused by the coronavirus pandemic was reflected in reports released Thursday from Amazon, Facebook, Apple and Google's corporate parent, Alphabet.
Apple delivered surprisingly strong numbers with both its revenue and profit rising, defying analysts' lowered expectations. The iPhone maker's revenue rose 11% to nearly $60 billion, while profit rose 12% to $11.3 billion.
Alphabet, Google's holding company, reported its first-ever drop in quarterly revenue compared with the prior year. Although it was only a 2% decline, it was a telling sign of a downturn in the digital ad market while also serving as a reminder that the economy is struggling even more than it did more than a decade ago during the Great Recession Google's low point during that time came during the second quarter of 2009, when its revenue edged up by just 3%.
Alphabet's profit for its most recent quarter plunged 30% to nearly $7 billion. Revenue from Google's core search business declined nearly 10%, but the company saw ongoing growth in its YouTube video service and its cloud computing business.
Alphabet CEO Sundar Pichai said on a call with analysts Thursday that the company has started to see early signs of stabilization despite the ongoing fragility of the economy.
Facebook, which also makes most of its money from digital ads, recorded an 11% increase in revenue from the prior year, the social networking company's slowest growth since going public eight years ago. The company's profit nearly doubled to $5.2 billion from the same time last year, although it would have fallen if not for $3 billion in tax and legal expense items a year ago, much of that related to a major antitrust settlement with the Federal Trade Commission.
The social network said it expected revenue to grow about 10% in the current quarter, similar to the second quarter, and while that's more than analysts expect, it's factoring in issues including economic uncertainty; less time spent on its apps as the world reopens from the pandemic in many places; the impact of a July ad boycott targeting hate speech; and regulations affecting its business like California's new privacy law.
Amazon, meanwhile, benefited from stay-at-home orders and pandemic fears that help boost its e-commerce sales. The company's earnings also roughly doubled to $5.2 billion, while revenue soared 40% to $88.9 billion.