The Tech Titans
Three of the biggest tech companies reported record quarterly financial results on Thursday as they extended their dominance over swaths of the global economy. Apple Inc., Alphabet Inc. and Amazon.com Inc.-with a combined market value of more than $2 trillion-all boosted growth by broadening their reach into new areas.
Apple’s revenue rose 13% to $88.29 billion, fueled by its move to increase smartphone prices behind its new flagship iPhone X, released in November at $1,000. The company, whose profits topped $20 billion for the first time, is also increasingly benefiting from its services business, including App Store sales and music and payments services.
Amazon ended regular hours trading down 4.2 percent, or $60.89, to close at $1,390. But they gained all that back — and then some — after reporting results that beat expectations for both income and revenue. The e-commerce juggernaut had fourth-quarter net income of $1.86 billion and a profit of $3.75 per share. Adjusted for pretax gains, that profit came to $2.16 per share. The results exceeded Wall Street expectations. The average estimate of 14 analysts surveyed by Zacks Investment Research was for earnings of $1.85 per share.
“Amazon generated another blockbuster quarter on the revenue side,” said Moody’s analyst Charlie O’Shea in a statement. “Retail growth in North America was around 25 percent for the quarter excluding Whole Foods, which was well above our 20 percent threshold for a solid quarter, and even extracting Whole Foods, there was solid margin improvement.”
Alphabet’s profit jumped 28% to $6.84 billion, excluding a giant $9.9 billion charge related to the new U.S. tax law which turned its bottom line into the red. While the ad business makes up nearly all of its profit, Alphabet is investing in a dozen businesses such as self-driving cars and cybersecurity in hopes they will drive future revenue.