All four were affected by the pandemic, although in strikingly different ways. Google and Facebook reported slowing growth in the April-June quarter due to …
All four were affected by the pandemic, although in strikingly different ways. Google and Facebook reported slowing growth in the April-June quarter due to lagging digital ad sales, while Apple and Amazon saw profits and revenue rise. Shares of all four companies rose in after-hours trading, reflecting financial performance that exceeded Wall Street expectations. 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 more than a decade ago during the Great Recession Google’s previous low point came during the second quarter of 2009 when its revenue edged up by just 3%. Alphabet’s profit for its most recent quarter plunged 30% to nearly $7 billion. Revenue from Google’s core search business declined nearly 10%, though Chief Financial Officer Ruth Porat said there were signs of improvement at the end of the quarter as internet users searched for more commercial products and advertisers began spending more on the platform. Still, she said, it’s “premature to gauge the durability” of those trends because of ongoing economic uncertainty around the world. Facebook, which also makes most of its money from digital ads, recorded an 11% increase in revenue from the prior year, the social networking company’s slowest growth since going public eight years ago. The company’s profit nearly doubled to $5.2 billion from the same time last year, although it would have fallen if not for $3 billion in tax and legal expense items a year ago, much of that related to a major antitrust settlement with the Federal Trade Commission.
