On July 30, local time, the four major U.S. technology companies released their financial results. Apple, Amazon, Facebook and Google all handed over better-than-expected quarterly “report cards”, sparking high market attention. According to the analysis, under the impact of the new crown pneumonia epidemic, more people choose to telecommuting and reduce the number of outings, making the products and services provided by large technology companies more popular.
Original title: North America watch the U.S. business world is on fire: tech giants are booming, traditional businesses struggling to survive.
Source: CCTV News Client.
Bloomberg reported on the same day that the parent company of Men’s Wearhouse, a U.S. men’s clothing retailer, will file for bankruptcy as soon as this weekend, joining the “bankruptcy army” of traditional businesses. In the eyes of industry insiders, the number of companies filing for bankruptcy will increase as part of the federal government’s aid effort sits on the horizon. Thus, the rebound is exacerbating corporate inequality in the United States.
Business Insider reports that Amazon, Apple, Facebook and Google, the four biggest U.S. technology companies with a market capitalisation of $5 trillion, have just reported better-than-expected results.
Technology companies bucked the trend.
Just a day after their chief executives were subjected to “antitrust torture” from members of Congress, Apple, Amazon, Facebook and Google reported better-than-expected results on July 30th, and their market capitalisations have already exceeded $5 trillion in the day’s market. These bright results provide further evidence to enthusiastic investors that the automation and algorithm-optimized businesses of technology companies have not only weathered the epidemic, but will continue to outperform other companies in the future.
Apple reported third-quarter revenue of $59.69 billion, up about 12 percent from profit to $11.25 billion. The company beat analysts’ expectations of $52.24 billion in the three months ended June 27, helped in part by strong demand for applications and home office equipment. At the same time, Apple managed to avoid a decline in the iPhone business.
Apple said demand for all of its products exceeded expectations in the May-June term. Chief executive Tim Cook attributed this to the launch of the new iPhone SE, economic stimulus measures around the world, and the lifting of the “home order”. “A lot of things are moving in the right direction,” Mr Cook said. “
Amazon’s earnings for the second quarter ended June 30 rose 40 percent to $88.9 billion, beating analysts’ expectations of $81.4 billion, and profit shone twice to a record $5.2 billion, well above analysts’ expectations. Amazon’s second-quarter sales and profit surge have been linked to a large number of customers relying heavily on online shopping during the outbreak. At the same time, global demand for telecommuting is driving growth in the company’s cloud computing division.
At a July 30 news conference, Brian Olsavsky, Amazon’s chief financial officer, said the surge in profits was helped by sales of high-margin goods on its website and that shipments of the company’s products exceeded expectations. Notably, businesses outside Amazon’s e-commerce continue to drive profit growth. Sales in the web services division rose 29 per cent, helped by telecommuting, while sales in the business, including advertising, surged 41 per cent, making a profit by selling advertising space as sponsored products on search and display pages.
Social media giant Facebook also weathered the storm, with second-quarter revenue of $18.7 billion, up from $16.9 billion a year earlier and above analysts’ expectations of $17.34 billion, thanks to increased user engagement. The results are yet another sign of the resilience of Facebook’s business, despite the company’s repeated controversies in recent days. More than 1,000 of its million advertisers have previously announced they will stop running ads in an attempt to pressure Facebook to take action against hate speech.
According to the analysis, Facebook’s earnings beat market expectations, indicating that advertisers are willing to expand their advertising budget spending, a change from the beginning of the year to ad spending more cautious attitude. At the same time, Facebook’s impact on larger markets and increased usage during the outbreak helped it weather the recession. The company said the increase in user growth reflected increased consumer engagement, which allowed them to spend more time at home during the outbreak.
Alphabet, Google’s parent company, reported a 2 percent drop in second-quarter revenue to $38.3 billion, beating expectations of $37.4 billion. Alphabet recorded $29.9 billion in advertising revenue, down from $32.5 billion a year earlier, as advertisers, including some consumer brands, cut spending during the outbreak. But its video business, YouTube, saw a small increase in revenue. However, analysts had already expected the company’s advertising revenue performance, with investors largely unscathed by the news, with Alphabet’s shares up 1 per cent after the session.
Sandal Picchay, chief executive of Alphabet, Google’s parent company, attributed the decline in advertising revenue to the macroeconomic environment under the outbreak and said he saw potential signs of stabilization. The company believes that advertising business conditions improved steadily throughout the second quarter, but “it’s too early to say how to get out of trouble”. Meanwhile, Google continues to expand into emerging markets such as cloud computing, where its cloud computing business recorded a 43% revenue growth in the quarter.
According to the New York Times, the U.S. economy is in a record recession, but tech giants can stay out of the way, the New York Times says, the U.S. economy is in a record recession, but the tech giants can stay out of the way.
Traditional enterprises are in hot water.
The u.S. tech giant’s performance in the wake of the outbreak shows that technology is strongest in the face of new viruses, recessions and record unemployment. The power of technology has made Silicon Valley’s performance more promising, and asset prices have hit new highs, bringing the city to a new round of “wealth-building”. At the same time, however, traditional businesses are facing a terrible wave of bankruptcies, with a large number of retailers, energy companies and others closing.
Tailored Brands, the parent company of Men’s Wearhouse, a prominent U.S. menswear retailer, has said it could file for bankruptcy as soon as the end of the week and close 400 to 500 stores because of weak demand for suits, which has left white-collar U.S. white-collar workers in the u.S. in a widespread home.
The encounter at Men’s Wearhouse is not an exception. Since the outbreak, global car rental brand Hertz, established shale oil and gas company Chesapeake Energy (11.87, 0.00%, 0.00%) inc., century-old clothing brand Booker Brothers, retail giant Asena Retail Group and other enterprises have declared bankruptcy, triggering a chain reaction, not only to shake its industrial chain, but also to the overall impact of the U.S. economy.
U.S. corporate bankruptcy filings increased by 26% in the first half of 2020 and 26% in the first half of 2020
More than 3,600 U.S. companies filed for bankruptcy protection in the first half of June 30, up 26 percent from a year earlier, according to Ebay, a global legal services firm. In June alone, U.S. corporate bankruptcy filings jumped 43 percent from a year earlier. However, this is only the tip of the iceberg, and there are a large number of quietly closed individual or family workshops that are difficult to count, they are the most direct victims of the outbreak. These merchants are scattered across the United States, and their failures usually don’t get much attention, but they really hurt families and individuals.
In the highly mature situation of the industrial chain, the bankruptcy of an enterprise will have a huge chain reaction. In retailing, for example, since March, many retail companies have gone bankrupt or hovered on the brink of bankruptcy, leaving real estate companies with a front to provide them with trouble.
The worst, however, may not yet be. There are signs that a stagnation in the economic recovery could lead to a continued rise in the number of bankruptcies in the United States, following the recent massive rebound in the outbreak. U.S. corporate bankruptcy filings are likely to surge 43 percent from a year earlier this year, according to Ebe. The American Bankruptcy Association says the number of companies filing for bankruptcy is expected to increase as part of the federal government’s aid effort sits on the horizon.
As part of the Care Act, introduced in March, congress earlier passed a pay protection plan to help small businesses survive the outbreak. The program has so far provided more than $500 billion in loans to small business owners, but the deadline for applying for loans is August 8, and if they do not extend it, businesses will not be able to get help thereafter. Rachel Smyure, a bankruptcy attorney at the Dallas law firm Ross and Smith PC, expects a big increase in bankruptcy filings in the coming months as federal pay protection programs and other aid programs for small and medium-sized businesses expire.
Only 16 percent of small U.S. businesses now believe they can continue to pay their employees after their loan programs are over, and up to 84 percent of companies surveyed have made it clear that their funds will run out in the first week of August, according to Goldman Sachs. In a study released On July 22, economists such as David O’Tor, a professor at the Massachusetts Institute of Technology, said that lending directly to businesses could help mitigate job losses during the outbreak and could help save 1.4 million to 3.2 million jobs. Now that the bailout is about to expire, companies facing a run-up to their money may be forced to lay off workers.
The New York Times says Amazon, Apple, Google and Facebook reported better-than-expected financial results a day after the U.S. Congress conducted an “antitrust grill” on the chief executives of the big four technology companies, ignoring the worst recession in U.S. history and widening the gap with the average small-sized business. The paper quoted Daniel Ives, managing director of equity research at Wedbush Securities, as saying that while the outbreak has led to the collapse of companies in many other industries, the tech giants will continue to grow and “the strong will be stronger”. In this way, the outbreak has instead exacerbated the phenomenon of weak meat in the corporate world. (CCTV reporter Gu Xiang Xu)