Apple, Amazon, and Facebook shed $220 billion in market value as shares tank after earnings
REUTERS/Spencer Selvidge
- Apple, Amazon, and Facebook shares slumped on Friday as investors expressed their dissatisfaction with the trio's earnings on Thursday.
- Apple and Facebook fell as much as 5%, while Amazon slumped as much as 4%, wiping a total of $220 billion off their combined market capitalizations.
- Alphabet stock jumped as much as 8% after Google's parent company posted earnings that blew away analysts' forecasts.
- Scroll down for a brief look at each of the four companies' earnings.
- Visit Business Insider's homepage for more stories.
Apple, Amazon, and Facebook shares tumbled on Friday after the technology giants reported earnings on Thursday that disappointed investors.
Apple and Facebook slid as much as 5%, while Amazon dipped as much as 4%. The stock-price declines erased a total of $220 billion from their market capitalizations — more than the entire market cap of Disney ($217 billion), Netflix ($215 billion), or Coca-Cola ($204 billion).
Google-parent Alphabet's shares bucked the "big tech" trend, jumping as much as 8% after the group posted revenues and profits that crushed Wall Street's expectations. The stock surge added more than $80 billion to the group's market cap.
Here's a quick look at the four tech titans' earnings:
Apple grew its net sales by 1% year-on-year to $64.7 billion in its fourth quarter to September 26. The increase reflected a 29% rise in Mac sales and a 46% jump in iPad sales, as millions of people turned to Apple products to work and study from home during the pandemic.
However, iPhone sales slumped 21% to $26.4 billion, and net sales shrunk 28% in Greater China. The result was a 7% drop in net income to below $13 billion. Apple also declined to offer financial guidance for the current quarter, disappointing investors hoping to gain a sense of management's expectations for the new iPhone 12.
Amazon posted a 37% rise in third-quarter net sales to $96.1 billion, as net product sales climbed 33% and net service sales surged 43%. Revenue jumped 29% to $11.6 billion in its cloud-computing division, AWS, generating $3.5 billion in operating income — more than half of Amazon's total operating income of $6.2 billion.
The e-commerce giant guided towards net sales growth of 28% to 38% this quarter. However, it also forecast operating income of $1 billion to $4.5 billion, indicating its profits could rise 15% or plummet 74% year-on-year.
Facebook reported a 22% increase in revenues to $21.5 billion last quarter, almost entirely driven by a 22% rise in advertising sales. The upshot was a 12% jump in operating income to $8 billion. The social-media giant also grew its daily and monthly active users by 12% year-on-year to 1.8 billion and 2.7 billion respectively.
However, Facebook also warned of "significant" uncertainty next year, as the accelerated shift to online shopping and digital-advertising boom during the pandemic might not last, and platform changes and new regulations could spell trouble for its business.
Alphabet's third-quarter earnings blew past analysts' expectations. Revenues climbed 14% to $46.2 billion as Google search, Google and YouTube advertising, and Google Cloud all posted robust sales growth. The result was a 22% surge in operating income to $11.2 billion.