GAFAs in better shape than ever despite the entry into recession of the US economy
Sylvie Claire / July 31, 2020
The American economy has entered a recession and industrial groups have lost billions, but Silicon Valley is resisting the pandemic and even posting insolent profits, like revenge the day after a hearing where American elected officials accused them of all the ailments.
Written on Wednesday on respecting the competition, Google, Apple, Facebook and Amazon on Thursday released quarterly results largely beyond market expectations, showing how the digital economy is emerging from the pandemic.
Amazon emerges in the second quarter with $ 5.2 billion in net income, double that of a year ago, despite its 4 billion in operating income directly invested in managing the health crisis.
"We have created more than 175,000 jobs since March […] and sales by third parties have again grown faster than direct sales from Amazon," prided his boss Jeff Bezos, attacked the day before on his dual role of judge and party on the online sales platform.
The group has increased its delivery capacity by 160% and plans to invest two billion more to protect its employees and respond to the explosion in demand.
For Apple, Facebook and Google, analysts predicted slowdowns, because of the guesswork and also cuts in the advertising budgets of advertisers.
Not even hurt
But visibly unaffected, the iPhone maker posted nearly $ 60 billion in sales (+ 11%), and more than $ 11 billion in net profits, two billion more than expected. Facebook's revenues also climbed 11% to $ 18.7 billion, from which the California-based company took out more than $ 5 billion in net profits.
The opportunity for his boss, Mark Zuckerberg, to recall the major role played by the platforms during the Great Containment, the day after a session of virulent questions from politicians on his monopoly position.
“Imagine living this pandemic two decades ago, when the internet was born. Facebook did not even exist. […] You would have had no connection with your friends and the economy in general,” he said. assaulted during a conference call to analysts.
He even allowed himself to judge very disappointing that "the Covid-19 is gaining ground quickly in the United States", "because it seems that (the country) could have avoided this wave if our government had managed the situation better. « .
Only Google is backing down
Alphabet, the parent company of Google and YouTube, is the only one to have stumbled. Its net profit reached nearly $ 7 billion, three billion less than last year.
The world leader in online advertising is more exposed than Facebook to large advertisers, such as tour operators, whose revenues are collapsing due to the coronavirus. Its revenues fell some 2% to $ 38.3 billion - a billion more than expected on Wall Street.
Not even afraid
Alphabet CEO Sundar Pichai said he saw "the first signs of stabilization." "But of course, the economic climate remains fragile," he added, as outbreaks of Covid-19 again force some officials to take targeted containment measures.
For Facebook or Amazon, the return to "normal" is not necessarily reassuring. The global social network, now used by nearly 1.8 billion people daily, acknowledged that its active user counts could "drop slightly" in the third quarter.
Facebook is also boycotted at the moment by hundreds of companies because of its moderation of content deemed too lax, but the consequences for its revenues will undoubtedly be limited.
Amazon at the top
Amazon has also set the bar high. "Our revenue in the second quarter was higher than the fourth quarter (the holiday season), which is unprecedented," admitted Brian Olsavsky, chief financial officer of Amazon. But according to GlobalData Retail analyst Neil Saunders, "These phenomenal results prove how shopping habits have changed during the pandemic, in the United States and around the world. »
Apple, for its part, has confirmed the release of its new smartphone this fall, but a few weeks later than expected.
Nothing to worry analysts about. “The stage is set for pent-up demand for the iPhone 12 to explode this fall for the iPhone 12,” said Daniel Ives of Wedbush Securities. "They have too much power," said David Cicilline, the elected Democrat who led the GAFA hearing the day before. "Some must be split, all must be better regulated and made responsible". Threats that already seem distant.
Credit : RTBF