One day after the CEOs of four of the world’s biggest tech companies — Apple, Amazon, Facebook and Alphabet —were peppered with hostile questions about their business practices in a House subcommittee hearing that dragged on for more than five hours, all four companies posted stronger-than-expected June quarter results, driving their stock prices higher.
It was a clean sweep. Four for four.
Depending on how you want to look at it, today’s flurry of strong earnings reports either justifies the interest in the companies expressed by regulators and legislators, or it demonstrates why investors have generally reacted to the added scrutiny by ignoring it and focusing instead on their continued stellar financial performance.
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Let’s do a quick review.
Apple crushed it...The company posted revenue of $59.7 billion, with profits of $2.58 a share, way above the Street at $52.1 billion and $2.09 a share. Apple saw strength in all of its vertical markets, with an especially strong quarter for Macs and iPads—and it could have sold even more had it not been supply constrained. Apple (ticker: AAPL) also tipped its hand on the 5G iPhone launch—it’s coming in October. In late trading, the stock rallied 6%, topping $400 a share for the first time. But it won’t stay there: Apple also declared a four-for-one stock split, which shouldn’t really matter, but plays to the investors in the cheap seats. As for the App Store, the topic of most questions to CEO Tim Cook yesterday, it had record revenue in the quarter.
...so did Amazon…Did you think you were the only one getting more Amazon packages? The company’s $88.9 billion in sales was almost $8 billion above the high end of the company’s original guidance range. Profits at $10.30 a share were about five times the Street consensus. AWS revenues were a hair light, but nobody is paying attention to that. September quarter guidance beat Street expectations as well. The stock (AMZN) rallied 5% in late trading.
...and Facebook…Remember how investors were ignoring the advertiser boycott? Well, here’s why. The social network posted revenue of $18.7 billion and profits of $1.80 a share, above the Street consensus at $17.3 billion and $1.39. The company now has a remarkable 3.14 billion people using at least one of its networks— Facebook, WhatsApp, Instagram and Messenger—40% of the population of the Earth. The company noted that the ad boycott is not materially affecting July revenue. After hours, the stock (FB) is up 6.2%, to $249, just a hair below its record intraday high at $250.12.
...as did Alphabet. Google’s parent (GOOGL) was the laggard, with a gain of just 0.5% after hours. Like the others, the search giant beat estimates, with revenue of $38.3 billion and profits of $10.13 a share, ahead of the Street at $37.3 billion and $7.94 a share. But revenue was actually down 2% from a year ago, the result of a downturn in the digital advertising market. YouTube’s ad business grew 6%, though, and Google Cloud revenue jumped 43%. The company also announced a $28 billion stock repurchase plan.
In late trading, the four companies together added $214 billion in market value. And somewhere, House members are planning another hearing.
Write to Eric J. Savitz at eric.savitz@barrons.com
https://news.google.com/__i/rss/rd/articles/CBMiggFodHRwczovL3d3dy5iYXJyb25zLmNvbS9hcnRpY2xlcy9mb3VyLWJpZy10ZWNoLXN0b2Nrcy1hZGQtMjE0LWJpbGxpb24taW4tbWFya2V0LXZhbHVlLWFmdGVyLWNydXNoaW5nLWFuYWx5c3QtZXN0aW1hdGVzLTUxNTk2MTUzNDEx0gGGAWh0dHBzOi8vd3d3LmJhcnJvbnMuY29tL2FtcC9hcnRpY2xlcy9mb3VyLWJpZy10ZWNoLXN0b2Nrcy1hZGQtMjE0LWJpbGxpb24taW4tbWFya2V0LXZhbHVlLWFmdGVyLWNydXNoaW5nLWFuYWx5c3QtZXN0aW1hdGVzLTUxNTk2MTUzNDEx?oc=5
2020-07-30 23:56:00Z
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