The CEOs of Apple, Alphabet, Amazon and Facebook leaned back on Wednesday to downplay their market leadership in more than five and a half hours before the congress. Mark Zuckerberg, CEO of Facebook, noted that he is catching up in various categories, from messaging to video. Tim Cook, CEO of Apple, described the competitive environment of the smartphone market in street fighting. Amazon's Jeff Bezos said his company is still a small retail player, while Alphabet's CEO Sundar Pichai said Google continues to face competitive threats.
If you only listen to these four men, you would almost feel sorry for them.
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But then everyone went on the next day to claim profits that Scrooge McDuck would be jealous of.
Both Amazon and Facebook were able to double their profits. Amazon's results came from spending $ 4 billion on COVID-19 related security measures for its employees, while Apple saw a slight increase in iPhone sales, despite the fact that many of its stores were closed and much of it was locked. Google was the only company that saw a drop in sales and revenue. (But don't feel bad as the results were better than Wall Street expected.)
The stark contrast between the rhetoric heard before the House Judiciary Subcommittee on Justice and the large earnings and earnings gains on Thursday undermines any managerial effort to gain sympathy as lawmakers seek ways to show the immense power of these companies to limit. The timing of the earnings coming out less than 24 hours after the end of the hearing makes for a more dramatic comparison because it's so fresh in our minds.
The fact that these companies continue to generate billions of dollars in profits in a pandemic and recession that cut tens of millions of jobs in the U.S. alone shows how much more we depend on big tech in this crisis to stay in touch with our friends want and buy family on Facebook, diapers and groceries on Amazon or watch entertainment and use online services from Google and Apple devices.
"The reason is that the world is changing," said Michael Obuchowski, chief investment officer of Merlin Asset Management, who owns shares in all four companies. "It's getting more digital - it's been a while, but the pandemic has broken the back of the non-tech world."
The dollars that go to the Big Four also increase ammunition for legislators who want to limit the power of these companies. Based on the figures for the second quarter alone, it is clear that Congress will take action.
"These companies, as they exist today, have monopoly power," said MEP David Cicilline, Democratic Chairman of the Cartel Subcommittee, in his closing remarks on Wednesday. "Some must be dissolved. All must be properly regulated and held accountable."
Here's a quick look at the results.
- Amazon posted record earnings of $ 5.2 billion, or $ 10.30 per share, exceeding expectations of $ 1.46 per share, while sales increased 40% to $ 88.9 billion rose.
- Facebook doubled its earnings to $ 5.18 billion, or $ 1.80 per share, well above analysts' expectations of $ 1.39 per share. Monthly active users rose 12% to 2.7 billion.
- Apple saw a 12% increase in earnings to $ 11.25 billion, or $ 2.58 per share, exceeding the average analyst estimate of $ 2.04. Revenue increased 10% to $ 59.69 billion, benefiting from a 1% increase in iPhone revenue (supported by the low-cost iPhone SE) despite a worldwide ban.
- Alphabet, Google's parent company, posted earnings of approximately $ 7 billion, or $ 10.13 per share, which was lower than the previous year but still above the $ 8.21 expected by Wall Street each Share lay.
The results are impressive in a normal environment, but given the current environment, they look absolutely stunning.
"The numbers certainly make it harder for people to see these companies as weak in any way," said Carolina Milanesi, an analyst at Creative Strategies.
The company's executives are aware of the contradiction and, on Thursday, took care to strike a balance between advertising impressive numbers and being sensitive to the situation. Amazon's press release was full of ways the e-commerce giant contributed to the community and its people, including investing more than $ 9 billion in the economy.
Apple's cook tackled the problem directly, while Zuckerberg held on to his conversation topics from Wednesday.
On Apple's call to profit, Cook said, "We are aware that these results are a great relief in times of real economic difficulties. We have no zero-sum approach to prosperity. We focus on growing and securing the cake." Our success is not just our success. Everything we do, build or do is geared towards creating opportunities for others. "
On Facebook's call, Zuckerberg said, "As I said yesterday, the tech industry is an American success story. Products we build have changed the world for the better and improved people's lives."
Zuckerberg also argued that efforts to find online businesses that rely on online advertising would harm small businesses that rely on Facebook products.
"Is it really what policymakers want amid a pandemic and recession?" Said Zuckerberg. "I think the right way is regulation that protects people's data while providing the benefits of this kind of personalized and relevant advertising."
However, all companies emphasized the environmental uncertainty. More than 150,000 Americans have died from the corona virus, and Congress is still debating an economic stimulus package designed to provide more help to unemployed workers and businesses.
"We are working to help people, businesses and communities in these uncertain times," said Pichai of Alphabet in a statement.
Times are indeed uncertain, but the shift to remote work and our trust in technology make it clear that companies will be fine no matter how they underestimate things.
"You are on the right side of the greatest economic upheaval ever," said Obuchowski. "You are exactly on the digital side."
CNET's Queenie Wong contributed to this story.