Mark Zuckerberg, the chief executive of Facebook, displayed the social network's enormous financial clout yesterday, even as the company deals with regulatory scrutiny and advertiser boycotts.
Facebook's revenue for the second quarter rose 11 per cent from a year earlier to $18.7 billion, while profit jumped 98 per cent to $5.2b. The results were well above analysts' estimates of $17.3b in revenue with a profit of $3.9b, according to data provided by FactSet.
More than 3 billion people come to Facebook or one of its family of apps on a regular basis, as the services have overtaken much of the developed world. And about 2.47 billion people use one or more of Facebook's apps every day.
The company said its number of monthly active users rose 12 per cent from a year ago and added that it was seeing record levels of engagement and usage this year because of the coronavirus pandemic and the shelter-in-place orders around the world.
"We're glad to be able to provide small businesses the tools they need to grow and be successful online during these challenging times," said Zuckerberg, who was grilled by lawmakers on Wednesday over Facebook's power.
"And we're proud that people can rely on our services to stay connected when they can't always be together in person."
Facebook's earnings have long been a bright spot for the Silicon Valley company.
Despite increasing scrutiny from regulators, questions about its role in subverting elections and how people use the platform to spread misinformation, users have continued coming back to its services.
Because of this, advertisers have consistently spent money on the platform.
But that started changing in late June when a grass-roots campaign, Stop Hate For Profit, rallied many of the top advertisers on Facebook to pull back their spending because of issues of hate speech on the site.
Facebook has tried to assuage the concerns, but has made it clear that it will not change its policy about free speech on the site based on outside threats to the business.
Facebook cautioned investors on Thursday that fallout from the ad boycott was noticeable in July. The company warned that greater economic turmoil from the pandemic could also eventually affect its bottom line.
Amazon's earnings double as sales surge.
Americans have flocked to Amazon during the pandemic.
Buoyed by a pandemic-induced surge in online shopping, Amazon on Thursday reported a huge jump sales and profits in the latest quarter.
Amazon had $88.9b in quarterly sales, up 40 per cent from a year earlier. Profit doubled, to $5.2b, even though the company invested heavily to improve the safety in Amazon's warehouses.
Analysts expected the company to have $81.4b in sales and $665m in profit, according estimates compiled by FactSet, a financial data firm. Shares in the company jumped more than 6 per cent in after-hours trading.
"Simply put, Covid-19, in our view, has injected Amazon with a growth hormone," Tom Forte, an analyst at the investment bank D.A. Davidson & Co., wrote in a recent note to investors.
In April, Jeff Bezos, the chief executive, told investors to expect no operating profit, and maybe even a loss, as the company planned to spend about $4 billion on Covid-related expenses, including temporary pay increases, declines in warehouse efficiency because of social distancing and $300 million for testing its work force for the virus.
"If you're a shareowner in Amazon, you may want to take a seat, because we're not thinking small," he said at the time.
Amazon had been paying workers an extra $2 an hour, but that benefit expired in May. At the end of June, it announced one-time "thank you" bonus of $500 for full-time associates in its warehouses.
But even those costs did not compare to the immense surge in demand, with online retail sales up 48 percent. As Americans have stayed home during the virus, they have flocked to online shopping.
"E-commerce is off the charts right now," said Guru Hariharan, a former Amazon employee whose company, CommerceIQ, helps major consumer brands manager their Amazon business. While the initial shock of panic buying has subsided, "demand is starting to stabilize, at a much higher level," he said.
One of Amazon's biggest challenge has been keeping up with demand, as the virus flared among its workers and the communities where they live.
Amazon's lucrative cloud computing business, whose customers range from major corporations to start-ups, saw sales grow 29 percent, to $10.8 billion, falling short of analyst expectations, though it was more profitable than they expected.
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