The two US-tech giants, Apple & Facebook published their Q4-20 and annual financial reports yesterday. Now it will become clear whether the companies were able to meet the forecasts and how they have developed in the past months.
Facebook is one of the clear Corona beneficiaries. Since most of us spend a large part of our day at home, various social media platforms are a welcome distraction and a way to maintain social contacts, at least digitally. As a result, the social network saw 2.8 billion monthly active users, a user growth of around 12%. But not only active usage increased, as the virus outbreak forced business to turn digitally, the amount of advertisement from small and medium companies massively surged as well.
And the company’s latest earnings figures reflect these circumstances. While Facebook recorded a turnover of 21.08 billion USD in the same quarter last year, the social media giant was able to shine in this quarter with a turnover of 28.07 billion USD, which corresponds to an increase of around 33%. Around 22 billion USD had been expected, so Facebook was able to exceed the forecasts by far.
The situation is similar with regard to earnings per share, which amounted to USD 3.88 in this quarter. In the same quarter of the previous year, this was only USD 2.56, and Facebook was also able to exceed the forecast of USD 3.22 earnings per share.
The US company was also able to show a profit growth of 52% compared to the previous year. And the operating margin is also more than respectable, Facebook managed to increase it by 4 percentage points from 42% in the previous year to 46%.
Overall, the company was able to exceed expectations in all points, which was to some extent already priced-in, as the share price moved little. But there are as well potential risks, with regulators wanting since quite a while to untangle Whatsapp and Instagram from Facebook and the EU looking at imposing a digital tax. Only time will tell if they will materialise.
Apple as a tech giant is also one of the winners of the crisis. Even before the publication of the quarterly figures, the Apple share reached an all-time high of 119.68 euros. The first quarter of the financial year is always of particular importance for the technology company, as a wide variety of Apple products are launched during this period. For example, four new iPhone models, the HomePod mini, the AirPods Max and the new iPad Air went on sale and the service offering was also expanded.
The expectation regarding Apple's turnover was USD 103.3 billion. This was far exceeded with a record turnover of 111.4 billion USD - as a comparison: in the same quarter of the previous year, Apple recorded a turnover of 91.8 billion USD. This makes Apple the third US company to break the USD 100 billion revenue mark in one quarter.
If you look deeper into the individual product categories, you can see that Apple was able to record an increase in turnover in all areas. However, the revenue growth within the service category with a growth from 12.7 to 15.7 billion USD, as well as the iPhone category with an increase from 55.9 to 65.6 billion USD are remarkable. Apple managed to sell a record number of around 90 million iPhones, surpassing Samsung.
Similarly, earnings per share increased from USD 1.25 in the same quarter last year to USD 1.68 - again, Apple did better than expected. The company has clearly exceeded expectations in several respects, which was already partly priced in at the beginning of the week when the share price moved sharply upwards.