The Strategist

Tech giants prove they are not afraid of COVID-19


07/29/2021 - 04:21



Quarterly reports from the world's biggest technology companies showed that the sector, which not long ago enjoyed record profits during the pandemic, has adapted well to the new conditions, that is, the gradual decline of the epidemic and the lifting of coronavirus restrictions.



Mike Mozart
Mike Mozart
The combined profits of the three largest technology companies in the latest quarter were $56.8 billion, almost double what they made a year earlier and 30% higher than Wall Street analysts forecasted.

That means the three companies made almost $5 billion in profit each week and about $620 million each day during the quarter.

The combined revenues of Apple, Alphabet and Microsoft were $189.4 billion, up 39% from the same period a year earlier and $15 billion more than Wall Street analysts expected. The combined market capitalisation of the three giants reached about $6 trillion.

Analysts' modest projections for the companies can partly be explained by the fact that the world's leading high-tech companies performed strongly against the backdrop of the COVID-19 pandemic, which led to an explosion in sales of gadgets, games, apps and more among users who were under severe coronavirus restrictions. Now that restrictions in some countries are increasingly loosening and people are no longer staying at home, analysts expect a slowdown in some indicators, but companies have shown that they are able to adapt to this new environment as well.

Apple's revenue for the quarter rose 36% to $81.4 billion, compared with expectations of $73.3 billion and net income was $21.7 billion compared with $16.6 billion. 

Revenue at Microsoft, driven by strong demand for its cloud services, Microsoft Teams applications and video games grew 21% to a record $46.2 billion (analysts had forecasted $44.2 billion), net income was $16.5 billion versus an expected $14.5 billion and sales of its Azure cloud platform, currently Microsoft's main business, grew 51%.

For Alphabet, the end of the quarter was a record both in revenue and profit. Revenue rose 62% year-on-year to $61.9 billion from the $56.16 billion analysts expected, while net income more than doubled to $18.53 billion.

source: ft.com