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Big Tech companies, fully recovered from pandemic, report record earnings

Tech CEOs clash with senators at hearing
Tech CEOs from Google, Twitter and Facebook testify at Senate hearing 08:20

America's largest technology companies are thriving despite the economy's woes, according to earnings posted by Google-parent Alphabet, Amazon, Apple, Facebook and Twitter on Thursday.

The companies posted earnings one day after the CEOs of Facebook, Google and Twitter defended themselves before the Senate Commerce Committee over claims they have too much power and stifle conservative opinion.


Google's corporate parent Alphabet returned to robust financial growth. The online search and advertising company saw its first-ever quarterly decline during the three months between April and June, as advertisers pulled back 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. The U.S. Justice Department is now coming after that financial might, filing a lawsuit that accuses the company of abusing its dominance of search to boost its profits and stifle competition.

Justice Department files antitrust lawsuit against Google 02:00


Amazon continued to benefit from shopping trends during the pandemic, reporting record profit and revenue during the third quarter. The company reported a $6.3 billion profit in the three months ending September 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, leading many of Amazon's retail competitors to create their own concurrent shopping holidays.

"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."

Big tech CEOs testify before Congress 01:25


Apple was the sole tech company to post middling results on Thursday, with the company's profits dipping, largely due to a scheduling change for the newest iPhone model.

Apple's revenue rose to $64.7 billion, slightly beating analyst expectations, but profits dropped 7% from the year-ago quarter to $12.7 billion. IPhone sales plunged, dropping 21% from the year-before period to $26.4 billion. Apple offset that erosion with strong sales of its services, including its music and streaming services, as well as its wireless ear buds and internet-connected watch.

The company typically gets a sales surge in late September, when it releases its new iPhone, but production problems left over from factory shutdowns during the pandemic led to the release being delayed until October.

Apple unveils new iPhone 12 that is 5G capable 01:35

Analysts expect sales to bounce back with a huge quarter during the October-December period, which includes the holiday shopping season. "We essentially view this quarter as the drumroll to the main event and the iPhone 12 5G supercycle," Wedbush analyst Dan Ives wrote in a note to investors. He added that preorder activity for the iPhone 12 was more than double that for the prior model.


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

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.

"Facebook has rebounded nicely from both the early-pandemic advertiser pullout, when marketers pulled ads across all media to redo messaging or conserve funds, and from the July ad boycott," eMarketer principal analyst Debra Aho Williamson said in an email. "Looking ahead to 2021, we expect that more advertisers will take a hard look at their reliance on Facebook and will ask themselves whether the environment is safe for their brands. But for now, heading into the all important holiday season, Facebook's financials look very strong."

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

However, Facebook lost users in the U.S. and Canada, its most lucrative ad market. Monthly users in the region dropped to 255 million, while daily users dropped to 196 million.


Twitter posted much stronger than expected third-quarter results thanks to surging advertiser demand. But while its user base continued to grow, Wall Street grumbled and shares plunged after hours.

The San Francisco company earned $28.66 million in the July-September period. That's down 22% from $36.5 million a year earlier, due to higher expenses in part related to COVID-19. Revenue grew 14% to $936.2 million.

Twitter had 187 million daily users, on average, in the third quarter. That's up 29% from a year earlier, thanks to people signing up to follow U.S. politics and current events worldwide, but below analysts' expectations of 195.6 million. The company no longer discloses monthly user figures.

The company predicted uncertainty going forward, due in part to the upcoming U.S. election and said it is "hard to predict how advertiser behavior could change." Twitter's stock fell $6.06, or 11.6%, to $46.37 in after-hours trading.

Twitter has been aggressive in policing content that violates its policies, including posts it considers misinformation, which has earned it criticism from conservatives and free-speech advocates. 

CBS News' Irina Ivanova contributed reporting.

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