Although
these companies make their money in different ways, the results served as
another reminder of the clout they wield and why government regulators are
growing increasingly concerned about whether they have become too powerful.
The massive
profits pouring into each company also illustrated why they have a combined
market value of USD 6.4 trillion -- more than double their collective value
when the COVID-19 pandemic started 16 months ago.
APPLE
Apple's
first iPhone model capable of connecting to ultrafast 5G wireless networks
continued to power major increases in quarterly revenue and profits for tech's
most valuable company.
With iPhone
sales posting double-digit growth over the previous year for the third
consecutive quarter, Apple's profit and revenue for the April-June period
easily exceeded analyst estimates. The Cupertino, California, company earned
USD 21.7 billion, or USD 1.30 per share, nearly doubling profits earned during
the same period last year. Revenue surged 36 per cent to USD 81.4 billion.
But in a
Tuesday conference call with analysts, Apple CEO Tim Cook lamented that the
steadily spreading delta variant of the coronavirus is casting doubt on how the
rest of the year will unfold. The road to recovery will be a winding one, Cook
said. That uncertainty has already led Apple to delay employees' mass return to
its offices from September to October. Most of Apple's stores, though, are
already open.
The iPhone
12, released last autumn, is shaping up to be Apple's most popular model in
several years, largely because it's the first to work on the 5G networks that
are still being built around the world. Apple's iPhone sales totaled nearly USD
40 billion in the latest quarter, up 50 per cent from a year ago.
Apple's
services division, the focal point of a high-profile trial revolving around the
commissions it collects from iPhone apps, saw revenue climb 33 per cent from
last year to USD 17.5 billion. A potentially game-changing decision from the
trial completed in May is expected later this summer.
Among
Apple's upcoming challenges is whether shortages of computer chips and other
key parts will force the company to delay its next iPhone this year, as it did
last year. While Apple expects revenue to rise 10 per cent in the current
quarter, it said it may have more trouble getting parts for iPhones and iPad
during the upcoming months. Executives skirted questions about another possible
iPhone delay.
ALPHABET
Google's
earnings improved markedly over the year-ago period, when the pandemic was
starting to bite consumer spending and its partner, advertising. Now that
vaccines have allowed people to shed the shackles of the pandemic and splurge
again, a big chunk of that pent-up demand has spurred advertisers to spend more
too, with a big chunk going to Google and its corporate parent Alphabet Inc.
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Google, Alphabet earned USD 18.53 billion, or USD 27.26 per share, during the
quarter, a nearly threefold increase from last year's earnings of USD 6.96
billion, or USD 10.13 per share. Google's advertising revenue soared 69 per
cent to USD 50.44 billion thanks to what CEO Sundar Pichai called a rising tide
of online activity among consumers and businesses.
Retail,
along with travel and entertainment ads, were the biggest contributors to the
revenue increase, the company said. Total revenue surged 62 per cent from last
year to USD 61.88 billion. Revenue after subtracting TAC, or traffic
acquisition costs, was USD 50.95 billion.
The
April-June quarter looks particularly strong since the 2020 downturn forced
Google to report its first decline in quarterly ad revenue from the previous
year.
Analysts
were expecting Alphabet to earn USD 19.24 per share on revenue of USD 56.2
billion, and USD 46.2 billion after subtracting TAC. Alphabet's stock jumped
USD 135, or 5.1 per cent, to USD 2,773 in after-hours trading after the
results.
MICROSOFT
Microsoft
on Tuesday reported fiscal fourth-quarter profit of USD 16.5 billion, up 47 per
cent from the same period last year. Net income of USD 2.17 per share beat Wall
Street expectations. The software maker also topped forecasts by posting
revenue of USD 46.2 billion in the quarter that ended on June 30, a 21 per cent
increase over the same time last year.
Analysts
were expecting Microsoft to earn USD 1.91 per share for the April-June quarter
on revenue of USD 44.1 billion. Microsoft profits have soared throughout the
pandemic thanks to ongoing demand for its software and cloud computing services
for remote work and study. After an initial dip in after-hours trading, the
company's shares later recovered and were up by less than 1 per cent.
Growth in
sales of Microsoft's cloud services, which compete with Amazon and other
companies, and its Office productivity tools for handling work documents and
email both outpaced overall revenue growth. The company's historical pillar
personal computing grew just 9 per cent in the quarter.
Microsoft
noted that supply issues were affecting its personal-computing division,
including for its Surface and Windows products. The company recently unveiled
the next generation of Windows, called Windows 11, its first major update in
six years. It will be available later this year. -AP