Big tech companies exceed market expectations in latest earnings releases

The four big tech corporations ended a week in which their CEOs appeared in front of Congress to testify against anti-competition practices by releasing their latest quarterly earnings, with all exceeding Wall Street expectations, and all but one seeing sharp rises in trading post-bell.


Revenue for Apple between April and June 2020 went up by 11% year-on-year to $59.7 billion, which was up from market projections, which expected revenue of $52.3 billion, with 60% of this being made up of international sales.

Earnings per diluted share jumped by 18% to $2.58, up from a predicted $2.04, and shares went up by 4.7% during after-hours trading.

Services revenue increased by 15% to $13.2 billion as Apple expanded its Apple TV and Apple News portfolios for customers, meeting its 2016 goal to double its services revenue within four years.

iPad sales were up by 31% year-on-year to $6.6 billion, and despite the release of this year’s new iPhones being delayed by “a few weeks” due to supply chain problems, according to Apple CFO Luca Maestri, this segment also saw growth, albeit a slimmer margin of just over 1%.

“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” said Tim Cook, CEO of Apple. “In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation.

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“This is a challenging moment for our communities, and, from Apple’s new $100 million Racial Equity and Justice Initiative to a new commitment to be carbon neutral by 2030, we’re living the principle that what we make and do should create opportunity and leave the world better than we found it.”

Annette Zimmermann, research vice-president at Gartner, commented: “In our preliminary smartphone sales alert published 2 weeks ago, we expected Apple to ship up to 36 million units. This was a higher estimate than the general consensus. We may end up with more than 36 million, we still need to analyse sell-in vs. sell through.

“The iPhone SE was a driver of these positive results. As I had mentioned back when the device was launched – it was good timing for this device as it would help with affordable upgrades in difficult times for iPhone users.”

Julie Ask, research vice-president at Forrester, added: “It looks like Apple killed it again – computers, tablets and other mobile devices feel essential.

“I know they didn’t break out the services revenue, but this is no surprise given consumers are home – games, TV, music and more – let alone contactless payments are on the uptake.

“There aren’t many surprises here. It seems like no matter the environment, consumers crave Apple products and the associated ecosystem of devices and services.”


The big tech corporation that owns Google, despite exceeding market expectations, saw revenue drop by 2% from $38.9 billion in Q2 2019, to $38.3 billion in the latest earnings, spelling the first drop in revenue in the company’s history.

The company’s earnings per share also fell, from $14.21 to $10.13, with shares ending up being flat following the report.

Google Cloud revenue grew by 43% to $3 billion, with plans to cut spending in this area being revealed, while growth in YouTube advertising revenue slowed to 5.8%, and Google ‘search and other’ revenue dropped by 9.8%.

In addition, Alphabet‘s ‘other bets’ segment, which includes autonomous vehicles and drones, recorded negative income of $1.12 billion.

“We’re working to help people, businesses and communities in these uncertain times,” said Sundar Pichai, CEO of Alphabet. “As people increasingly turn to online services, our platforms — from Cloud to Google Play to YouTube — are helping our partners provide important services and support their businesses.”

Greg Sheppard, chief revenue officer at Templafy, said that Google Cloud provides a bright spot for Alphabet.

“Google’s recent partnership with Deutsche Bank reaffirms that it’s not just the Internet’s biggest search company, it’s a cloud pioneer,” said Sheppard. “And when considering revenue for its cloud division ballooned 52% year-over-year in Q1, it’s clear Google is a force to be reckoned with in the cloud market.

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“While the partnership with Deutsche Bank may seem like just another drop in the bucket for the tech giant, it’s much bigger than that — it’s an inflection point for the modernisation of financial institutions, which have been slower to join the cloud adoption and digital transformation party due to heavy-handed regulations.

“Until recently, fintech start-ups have been the lead drivers in the modernisation of the financial services industry, and one might even argue their mere existence is an indication that traditional providers cannot survive if they don’t make digital transformation a priority.

“Deutsche Bank tapping Google mirrors what we’re seeing here at Templafy: running a business without a cloud-based infrastructure is fast becoming untenable. With this partnership comes proof of concept, and this is just the beginning of a major overhaul that will open up a vast new vertical market for cloud companies.”


Amazon recorded quarterly revenue of $88.9 billion, up from $63.4 billion year-on-year, in its earnings release, while the big tech company’s earnings per share totalled at $10.30, eclipsing market projections of $1.46. Additionally, shares went up by 4.9% during after-hours trading.

Growth within AWS revenue slowed to 29%, reporting a figure of $10.81 billion, with spending in this department being cut by many companies, while online sales grew by 53%.

In addition, operating income increased from $3.1 billion to $5.8 billion as viewership on Amazon Prime doubled in hours during the quarter.

“This was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe,” said Jeff Bezos, CEO of Amazon. “As expected, we spent over $4 billion on incremental Covid-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand—purchasing personal protective equipment, increasing cleaning of our facilities, following new safety process paths, adding new backup family care benefits, and paying a special thank you bonus of over $500 million to front-line employees and delivery partners.

“We’ve created over 175,000 new jobs since March and are in the process of bringing 125,000 of these employees into regular, full-time positions, and third-party sales again grew faster this quarter than Amazon’s first-party sales.

“Lastly, even in this unpredictable time, we injected significant money into the economy this quarter, investing over $9 billion in capital projects, including fulfillment, transportation, and AWS.”

Martin Garner, COO of CCS Insight, commented: “Amazon had a blow-out quarter, with Q2 revenue up 41% and beating its previous Q4 for the first time ever. The Prime flywheel was a key driver, with rapid growth of new Prime users, as well as existing Prime users buying more and more frequently.”

“Amazon’s capacity and logistics were stretched to the maximum during Q2, as it scrambled to cope with increased demand for its own products and a rapid increase in third party sellers switching to online selling. The company is expanding its capacity as fast as it can in anticipation of continued growth in the second half of 2020.”

“AWS saw its annual run rate hit £43 billion although its growth rate softened to 29%. Many of its customers are looking to save money, including spending less with AWS, and AWS says it is helping them do that. That is offset by new customers shifting their work more quickly to the cloud as a way of reducing costs.”


The latest quarterly earnings release from Facebook saw revenue growth of 11% to $18.7 billion, its slowest growth in revenue since 2012, while earnings per share totalled $1.80, and shares rose by 6% in extended trading.

In addition, revenue per user has been revealed to be above expectations, as the user base in the US and Canada rose from 195 million in the last quarter to 198 million.

Facebook’s ‘other’ segment, which includes Oculus headsets and Portal video chat devices, also increased in revenue, by 40% to $366 million.

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“We’re glad to be able to provide small businesses the tools they need to grow and be successful online during these challenging times,” said Mark Zuckerberg, CEO of Facebook. “And we’re proud that people can rely on our services to stay connected when they can’t always be together in person.”

Yuval Ben-Itzhak, CEO of Socialbakers, commented: “Facebook may have taken a beating on the PR front this year, culminating with the #StopHateforProfit movement in July, but it’s encouraging to see that their Q2 results remain strong.

“Likely, most of the fluctuations in ad spend have been on the part of large, global companies. These brands may have high profiles, but they actually account for a relatively small portion of Facebook’s advertising revenue compared to smaller businesses.

“No other platform can offer brands and advertisers the reach and scale that Facebook can offer. As long as Facebook and its family of applications continues to attract users, their advertising business is likely to remain strong. With both daily active user and monthly active users up, Facebook is still attracting new audiences – and advertisers need to be where the users are.”

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Aaron Hurst

Aaron Hurst is Information Age's senior reporter, providing news and features around the hottest trends across the tech industry.