Facebook, Google, Amazon: Tech giants report higher profits despite economic downturn

Five technology giants are reporting earnings Thursday, providing the latest indication of whether they are rebounding from an economic slowdown earlier this year.

The results come a day after the CEOs of Facebook Google and Twitter testified before the Senate Commerce Committee, rebuffing accusations of anti-conservative bias and promising to aggressively defend their platforms from being used to sow chaos in next week’s election.

Apple and Google's parent Alphabet are also reporting results Thursday.

ALPHABET

Google’s corporate parent Alphabet returned to robust financial growth during the summer. In the previous quarter, it suffered its first-ever quarterly decline in revenue amid the economic slowdown stemming from the COVID-19 pandemic.

The company’s revenue for the July-September period rose 14% from the same time last year to $46.2 billion. Its profit soared 59% to $11.2 billion, or $16.40 per share. Both figure easily surpassed analyst estimates, lifting Alphabet’s stock price by 9% in Thursday’s extended trading after the numbers came out.

The rebound, as usual, was propelled by the ad spending that has established Google has one of the world’s most proficient moneymaking machines. But U.S. Justice Department is now seeking to throw a monkey wrench into Google’s financial gears in a recently filed lawsuit that accuses the company of abusing its dominance of search to boost its profits and stifle competition

FACEBOOK

Facebook said Thursday its third-quarter profit and revenue continued to grow along with its worldwide user base, but looking ahead to 2021 the company predicted a “significant amount of uncertainty.”

Facebook earned $7.85 billion, or $2.71 per share, in the July-September period. That’s up 29% from $6.09 billion, or $2.12 per share, a year earlier. Revenue grew 22% to $21.22 billion from $17.38 billion.

Analysts were expecting earnings of $2.18 per share on revenue of $19.80 billion, according to a poll by FactSet.

The Menlo Park, California-based company’s stock slipped $7.83, or 2.8%, to $273 in after-hours trading after the results came out. The stock had closed up nearly 5% at $280.83.

The social media giant’s average monthly user base was 2.74 billion as of Sept. 30, up 12% from a year earlier.

AMAZON

Amazon continued to benefit from shopping trends during the pandemic, reporting record profit and revenue during the third quarter. The company reported net income of $6.3 billion in the three months ending Sept. 30, nearly triple that of the previous-year period.

Earnings per share came to $12.37, about $5 more than Wall Street analysts expected. Revenue soared 37% to $96.1 billion, also beating expectations.

The online shopping giant is also expecting a big end to the year as the holiday shopping season picks up. Amazon said Thursday that it expects fourth-quarter sales to rise between 28% and 38% from a year ago to between $112 billion and $121 billion.

The last three months of the year are always Amazon’s biggest, due to the holidays. But this year, Amazon also held its Prime Day sales event during the quarter for the first time after postponing it from July to October due to the pandemic. Prime Day has become one of the company’s busiest shopping events of the year.

“We’re seeing more customers than ever shopping early for their holiday gifts,” said Amazon CEO and founder Jeff Bezos in a written statement. “Which is just one of the signs that this is going to be an unprecedented holiday season.”