Some of the biggest U.S. technology companies reported mixed quarterly earnings on Thursday, a day after their CEOs were grilled by lawmakers over their market power and alleged monopolistic practices.
The staggering economic fallout caused by the coronavirus pandemic was reflected in reports from Amazon, Apple, Facebook and Google's corporate parent, Alphabet.
Amazon posted blowout results, with revenue for the quarter soaring 40% to $88.9 billion as Americans turned online for everything from household goods to entertainment. Grocery sales tripled from last year, and Prime members watched twice as many videos as they did one year ago, Chief Financial Officer Brian Olsavsky said on an earnings call.
Amazon's profits roughly doubled to $5.2 billion. The company, which has now over 1 million employees, also plans to expand its facilities, which are projected to grow 50% this year, Olsavsky said.
"This phenomenal set of results from Amazon underlines how much shopping habits shifted during the pandemic period both in the U.S. and around the world," Neil Saunders, an analyst at GlobalData Retail, said in a note. "Given Amazon's extensive offer and its solid presence in many markets, it was a first port of call for customers across a lot of categories and managed to drive trade with both new and existing shoppers."
Amazon's seller fees, which it collects from other businesses selling on its platform, grew 52% during the quarter, thanks "in part to higher volumes and partly because greater numbers of third-party businesses use more of the various services Amazon offers," according to Saunders.
Apple, too, posted a record quarter, with $11.2 billion in profit on sales of $59.7 billion. The company saw "double-digit growth in both Products and Services and growth in each of our geographic segments," CEO Tim Cook said in a statement, adding, "In uncertain times, this performance is a testament to the important role our products play in our customers' lives."
"These earnings from big tech and communication names are simply amazing. Yes, estimates were low and we all assumed they would be beat, but this is another sign that the strong have only gotten stronger," Ryan Detrick, chief investment strategist at LPL Financial, said in a note.
Advertising drop hurts Facebook, Google
Alphabet, Google's holding company, reported its first-ever drop in quarterly revenue compared to 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 during the Great Recession, more than a decade ago. Alphabet's profit for its most recent quarter plunged 30% to $6.7 billion.
Facebook, which also makes most of its money from digital ads, recorded its slowest growth since going public eight years ago. The social-networking company saw revenue increase 11% from the prior year and profits nearly double to roughly $6 billion from the same time last year. Part of the big jump stemmed from special charges last year.
CBS News' Irina Ivanova contributed reporting.