Apple and Facebook reported sharp increases in quarterly revenue Wednesday as both companies continue to take advantage of pandemic trends...
Apple and Facebook reported sharp increases in quarterly revenue Wednesday as both companies continue to take advantage of pandemic trends that have devastated other parts of the economy.
At Apple, revenue rose to $89.6 billion - good for earnings of $1.40 a share, which beat Wall Street analysts' expectations, which called for 99 cents.
That was a 54 per cent jump in revenue from the first quarter of 2021. Sales of iPads leapt by 79 per cent, while iMac sales grew by 70 per cent, and iPhone sales rose by 65 per cent.
Profits for the quarter surged to $23.6 billion, more than double the year-ago period, the company said on Wednesday.
Apple's main revenue driver continues to be the iPhone: Revenue for the iPhone rose 65 per cent to $47.9 billion. That beat the expectations of Wall Street analysts, who were expecting a 42 per cent increase.
The increasing uptake of 5G phones also helped boost demand for iPhones, Apple said.
Revenue from their Macs was $9.10 billion, versus a pre-results estimate of $6.86 billion. The increase in Mac revenue was 70.1 per cent, year-over-year.
And from iPads, Apple reported revenues of $7.80 billion - exceeding the estimate of $5.58 billion, and a 78.9 per cent increase, year-over-year.
At Facebook, total revenue, which primarily consists of ad sales, rose by 48 percent compared to the same quarter last year - to $26.17 billion. That beat analysts' average estimate of $23.67 billion, Reuters reported, for earnings of $3.30 a share, beating analysts' expectations of $2.37.
Apple's stock rose sharply in after-hours trading, gaining more than 3% after it reported better-than-expected quarterly earnings
Facebook's stock rose even more sharply, rising more than 5.4 percent after its earnings blew past expectations: Still, it flagged possible issues in the future if people opt out of 'tracking'
The iOS 14 update is at the center of a months-long feud between Apple CEO Tim Cook (left) and Facebook CEO Mark Zuckerberg (right). Zuckerberg claims Apple's moves are self-serving and will help cement its dominance in the mobile space, while hammering their profits
With people sitting at home on lockdown, they've taken to scrolling their phones and computers: That's led many of them to think it's time for an upgrade, boosting Apple.
And it's led advertisers to realize they've got a hugely captive audience with nothing else to do, boosting Facebook - which has sucked up all that ad revenue.
Shares of both companies rose sharply in after-hours trading after both reported the better-than-expected earnings for the first quarter, which ended March 31.
'This quarter reflects both the enduring ways our products have helped our users meet this moment in their own lives, as well as the optimism consumers seem to feel about better days ahead for all of us,' said Tim Cook, Apple's CEO.
'Apple is in a period of sweeping innovation across our product lineup, and we're keeping focus on how we can help our teams and the communities where we work emerge from this pandemic into a better world.'
Even as the companies were celebrating, though, there was trouble brewing: Facebook flagged that a fight with Apple on 'opting out' of tracking could dent future ad sales.
In the latest rollout of its operating software, Apple is asking people whether they will allow apps to 'track' their activity across the web: Apps, such as Facebook, use this information to target advertisements.
So, for instance, if you've gone to the Nike website lately to look at the latest pair of shoes, an ad for Nike shoes might show up on your Facebook feed later.
If customers opt out of such tracking, the idea is that fewer advertisers will buy such ads.
Those ads pay for a lot of the content seen on sites across the web, and they also allow small businesses to reach customers.
Both groups have protested Apple's moves; Facebook, especially, has a lot to lose - and it said so in Wednesday's report.
Facebook flagged 'ad-targeting headwinds' in the future, depending on how many people opt out of tracking on Apple's devices.
The strong results for Apple and Facebook come after Google's parent company, Alphabet, reported its own soaring revenue on Tuesday: Its quarterly sales were $55.3 billion - a 34 per cent increase compared to the same time last year.
Alphabet beat quarterly revenue estimates of $51.7 billion, as the recovering economy and surging use of online services combined to accelerate its advertising and cloud businesses.
Alphabet also announced on Tuesday a $50 billion share buyback, with shares rising about 4 per cent to $2,375 in extended trading.
The results are the first sign that Google services may hold on to gains in usage brought on by lockdowns and other pandemic restrictions that forced people to shop and communicate online over the last year.
Google ad sales surged 32 per cent in the first quarter compared with a year ago, above expectations of analysts tracked by Refinitiv.
Cloud sales increased 45.7 per cent, in line with estimates.
Sundar Pichai, CEO of Google and Alphabet, said: 'Over the last year, people have turned to Google Search and many online services to stay informed, connected and entertained.
'We've continued our focus on delivering trusted services to help people around the world.'
Sundar Pichai, CEO of Alphabet and Google, said they were helping the digital transformation
Amazon will report its Q1 earnings on Thursday, coming off a remarkable fourth quarter with $125 billion in sales.
Analysts on Wall Street expect Amazon to report revenue of $104.36 billion and earnings per share of $9.45, which would be increases of 38.3 per cent and 88.6 per cent, respectively, year over year.
The online retailer has seen sales swell during COVID, when tens of millions of Americans came to rely on it for goods including food and clothing.
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