How did the large American high-tech groups behave financially in the face of the covid-19 pandemic in the first quarter of the year? Hint: not that bad …
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For the first three months of 2020 (corresponding to its second fiscal quarter), Apple presented honest results given the health situation which directly impacted it since February (very sharp slowdown in production, closure of points of sale, etc.). Thus, the overall turnover of the firm reached 58.3 billion dollars (+1% year on year), with 62% of sales made outside the United States.
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Note that this good performance is not due to iPhone sales (down 7%), nor to iPad or Mac. Indeed, it is currently thanks to other products that Apple maintains its sales, in particular AirPods headphones and Watch watches (+ 23%). As for services, they continue to grow: subscriptions to iCloud, Apple Arcade, Music and TV + brought in 13.3 billion dollars (against 11.5 billion a year earlier). The App Store even shows double-digit growth ($ 515 million).
Another remarkable point, Europe is a promising territory for Apple, the Old Continent settling behind the United States (25.596 billion) among the most profitable regions, with a turnover of 14.294 billion dollars. China, of course, accuses the blow (9.455 billion, -8%).
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By presenting these reassuring figures to shareholders, Tim Cook has necessarily returned to the situation and the challenge imposed by the covid-19. He said that working conditions would undoubtedly remain disrupted for many more weeks at Apple Park, but that certain subsidiaries of the group remained very productive. He also recalled that the release schedule had been little disrupted by the pandemic until then, pressing on the fact that new MacBooks and iPads were launched, as well as the iPhone SE 2020. As for future innovations, the general manager promised that their development would continue.
Amazon and Microsoft do not know the crisis
Resistance to covid-19 is not unique to the Gafams: the major American tech players are all showing solid resistance to the health crisis which is shaking many economic sectors. As proof, Microsoft has published quarterly results where growth is the common denominator, its three main branches having all seen their revenues increase between January 1 and March 31: + 16% year on year to 11.7 billion dollars for Productivity (Office, LinkedIn, etc.); + 27% to $ 12.3 billion for the Cloud (Azure, GitHub, etc.); + 3% to 11 billion dollars for the PC (Surface, Windows, Xbox, etc.).
In total, Microsoft’s quarterly revenues increased by 15% over one year ($ 35 billion), nevertheless showing a slight decrease of $ 2 billion compared to the last quarter of 2019 (driven by the end of the year).
Amazon is also smiling. Over this period, the firm of Jeff Bezos – favored by containment measures vis-à-vis traditional trade – saw its turnover jump by 26%, to 75.5 billion dollars, on which a net profit 2.5 billion could be released. Amazon sales grew the most in the United States (+ 29%, compared to 18% elsewhere in the world). If the sales exceed the expectations of the Stock Exchange, the gain per share is nevertheless in decline (5.01 dollars, against 6.25 expected).
In response to criticism, Amazon took the opportunity to speak to present these results by announcing a $ 4 billion plan to protect its personnel (masks, equipment, tests). The shareholders retain, them, that Amazon plans not to generate profits during the following quarter, driving down the share price.
What about social media?
Let’s finish this brief overview by mentioning the situation of large social platforms. Facebook and Twitter – largely dependent on their advertising revenue – have also shown a certain resilience to the coronavirus, driven by the reinforced role of networks of this type during containment. The number of active users of Facebook services (including Instagram, Messenger, Whatsapp) increased by 11% to more than 3 billion. Revenues are up 18% to $ 17.7 billion and earnings reach 4.9 billion, twice as much as a year ago.
At Twitter, the number of users to monetize increased by 166 million, bringing sales up 2.7% to $ 808 million. The situation is nonetheless more delicate for the blue bird, with advertising revenues stagnating (+ 0.4%) at $ 682 million.
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