US Big Tech Companies Smiled in Q2 Despite Consecutive Setbacks

by Kwon Jaehee

Published 02 Aug.2020 12:42(KST)

COVID-19 and US Congress Antitrust Investigation Amid Consecutive Adversities
Apple Breaks Its Record for Highest Earnings

[Image source=AP Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Big tech companies leading the US Nasdaq market posted record-breaking earnings in the second quarter. Despite the impact of the novel coronavirus disease (COVID-19) and regulatory pressure from the US government, Apple and Amazon achieved their highest-ever results.

Apple announced that its revenue for the second quarter of this year (US fiscal third quarter, April to June) reached $59.69 billion (approximately 71 trillion KRW), an 11% increase compared to the same period last year. Initially, the market had forecasted Apple's second-quarter revenue to decline by about 3% year-over-year to $52.1 billion, but the actual results far exceeded expectations.

CNBC reported, "Apple achieved overwhelming quarterly results by recording revenue growth across all business segments and regions."

The driving force behind Apple's performance was the devices segment, including iPads and AirPods. iPad revenue rose 31% year-over-year to $6.58 billion, which is 35% higher than market expectations. Sales of other products such as AirPods also grew 16.7% during the same period, reaching $6.45 billion. However, iPhone sales showed some stagnation. iPhone revenue was $26.42 billion during this period, higher than the market forecast of $23.3 billion, but the year-over-year growth rate was only 1.66%.

Apple CEO Tim Cook commented, "These results achieved during the uncertain times of the COVID-19 pandemic are proof of Apple's relentless innovation."

Amazon, which emerged as a beneficiary of COVID-19, also posted surprising second-quarter results. Amazon's revenue surged 40% year-over-year to $88.91 billion. Net profit reached a record high of $5.2 billion.

Amazon CEO Jeff Bezos described this as "a very extraordinary quarterly performance."

Facebook, which has been suffering from an advertising boycott, also delivered results that exceeded market expectations. Facebook's second-quarter revenue increased 11% year-over-year to $17.7 billion, while the market had forecasted $17.3 billion.

Earlier, on the 29th of last month (local time), big tech companies faced regulatory pressure from US authorities, including being summoned to a hearing by the House Judiciary Committee's antitrust subcommittee. They were accused of abusing market dominance to enjoy monopolistic privileges.

David Cicilline, chairman of the House Judiciary Committee's antitrust subcommittee and a Democrat, criticized, "These companies stifle entrepreneurship, destroy jobs, drive up prices, and reduce quality. In short, they have too much power."