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Tech giants report higher profits — some more than others

AP
Alphabet’s rebound was propelled by ad spending.
Camera IconAlphabet’s rebound was propelled by ad spending. Credit: Jeff Chiu/AP

Five technology giants reported their earnings in the US overnight, providing the latest indication of whether they are rebounding from an economic slowdown earlier this year.

The results come a day after the chief executives of Facebook, Google and Twitter testified before the Senate Commerce Committee, rebuffing accusations of anti-conservative bias and promising to aggressively defend their platforms from being used to sow chaos in next week’s election.

Apple and Google’s parent Alphabet also reported results. Here’s how they did ...

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Google’s corporate parent Alphabet returned to robust financial growth in the three months to the end of September. In the previous quarter, it suffered its first-ever quarterly decline in revenue amid the economic slowdown stemming from the COVID-19 pandemic.

The company’s revenue for the July-September period rose 14 per cent from the same time last year to $USUS46.2 billion ($US65.6b). Its profit soared 59 per cent to $US11.2b, or $US16.40 per share.

Both figure easily surpassed analyst estimates, lifting Alphabet’s stock price by 9 per cent in Thursday’s extended trading after the numbers came out.

The rebound, as usual, was propelled by the ad spending that has established Google has one of the world’s most proficient moneymaking machines. But US Justice Department is now seeking to throw a monkey wrench into Google’s financial gears in a recently filed lawsuit that accuses the company of abusing its dominance of search to boost its profits and stifle competition

FACEBOOK

Facebook said Thursday its third-quarter profit and revenue continued to grow along with its worldwide user base, but looking ahead to 2021 the company predicted a “significant amount of uncertainty”.

Facebook earned $US7.85b, or $US2.71 per share, in the July-September period. That’s up 29 per cent from $US6.09b, or $US2.12 per share, a year earlier. Revenue grew 22 per cent to $US21.22b from $US17.38b.

Analysts were expecting earnings of $US2.18 per share on revenue of $US19.80b, according to a poll by FactSet.

The California-based company’s stock slipped $US7.83, or 2.8 per cent, to $US273 in after-hours trading after the results came out. The stock had closed up nearly 5 per cent at $US280.83.

The social media giant’s average monthly user base was 2.74 billion as of September 30, up 12 per cent from a year earlier.

AMAZON

Amazon continued to benefit from shopping trends during the pandemic, reporting record profit and revenue during the third quarter. The company reported net income of $US6.3b in the three months ending September 30, nearly triple that of the previous-year period.

Earnings per share came to $US12.37, about $US5 more than Wall Street analysts expected. Revenue soared 37 per cent to $US96.1b, also beating expectations.

The online shopping giant is also expecting a big end to the year as the holiday shopping season picks up. Amazon said Thursday that it expects fourth-quarter sales to rise between 28 per cent and 38 per cent from a year ago to between $US112b and $US121b.

The last three months of the year are always Amazon’s biggest, due to the holidays. But this year, Amazon also held its Prime Day sales event during the quarter for the first time after postponing it from July to October due to the pandemic. Prime Day has become one of the company’s busiest shopping events of the year.

“We’re seeing more customers than ever shopping early for their holiday gifts,“ said Amazon CEO and founder Jeff Bezos. “Which is just one of the signs that this is going to be an unprecedented holiday season.”

AP

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