What have we learned from Big Tech earnings?

Four Big Tech companies reported Q2 earnings after the session closed yesterday. In this short post we will highlight key takeaways from earnings releases and earnings calls from Amazon (AMZN.US), Alphabet (GOOGL.US), Apple (AAPL.US) and Facebook (FB.US).

Amazon

• EPS: $10.30, or +97.3% yoY

• Revenue: $88.9 billion, or +40.2% YoY

• AWS cloud revenue: $10.8 billion, or +29% YoY

• Total operating income: $5.84 billion

• AWS cloud operating profit: $3.36 billion

• Unit sales increase 47% YoY

• More than $4 billion in incremental coronavirus-related costs

• Online grocery sales tripled in Q2 2020

• Video streaming revenue doubled in Q2 2020

• Q3 revenue forecast: $87-93 billion

• Q3 operating profit forecast: $2-5 billion

Alphabet

• EPS: $10.13, or -28.7% YoY

• Revenue: $38.3 billion, or -1.5% YoY

• Advertising revenue: $29.9 billion, or -8.1% YoY

• Cloud revenue increased almost 50% to $3 billion

• Sales dropped for the first time in 16 years

• Operating margin dropped to 17% from 24% year ago

• Number of employees increased by almost 20 thousand year-over-year

• Company authorized $28 billion stock repurchase programme

Facebook

• EPS: $1.80, or +97.8% YoY

• Revenue: $18.7 billion, or +11% YoY

• Ad revenue: $18.3 billion, or +10.2% YoY

• Monthly active users: 2.7 billion, or +12% YoY

• Daily active users: 1.79 billion, or 12% YoY

• Weakest revenue growth since IPO in 2012

• User growth normalized as shelter-in-place measures were being eased

• User growth will be flat or negative in regions that lifted coronavirus restrictions

• Q3 revenue growth forecast: 10% YoY

Apple

• EPS: $2.58, or +18% YoY

• Revenue $59.7 billion, or +11% YoY

• Smartphone sales: $26.42 billion, or -2.8% YoY

• iPad sales: $6.58 billion, or +31% YoY

• Mac sales: $7.08 billion, or +21.6% YoY

• Sales drop was eased by iPhone SE launch in April

• Business improved in May and June compared to April

• Sales were negatively impacted by store closures

• iPad and Mac sales benefited from work-from-home shift

• Company expects strong back-to-school season

• Apple announced 4-to-1 stock split. Trading with split adjusted shares will begin on August 31

Nasdaq (US100) rallied yesterday after a session close as results from Big Tech companies turned out to be better than expected and, in many cases, better than a year ago. The index is testing the resistance at 10,930 pts at press time. However, recent price action hints that an attack on 11,050 pts could be looming. Source: xStation5