As we enter the second quarter of 2017, financial results are coming out left, right and centre.
Nasdaq, the tech-heavy index, reached new records of 6,048.94 last week, a rise of 0.39 percent thanks to strong results from tech giants.
Timeline for Finance
Facebook’s revenues are up and edges closer to 2bn monthly users
When Facebook’s results came out yesterday, the company announced its ad revenue was up 51 percent from a year ago, meaning it earned a total of $7.86bn, higher than analysts expectations of $7.68bn. Alongside revenue growth, the social network added 80m monthly users in the first three months of 2017, bringing it closer to the coveted 2bn mark.
Zuckerberg released a statement, saying:
“We had a good start to 2017. We’re continuing to build tools to support a strong global community.”
Despite this, shares fell for the company in after-hours traded as it announced it was changing the format of its earnings report. Facebook said it is no longer reporting adjusted expenses, income, tax rate, and earnings per share that are not in line with generally accepted accounting principles.
As well as announcing its results, Facebook has also said it will hire 3,000 people to review videos on the platform to prevent violent and distressing content from being broadcast.
“If we’re going to build a safe community, we need to respond quickly. We’re working to make these videos easier to report so we can take action sooner – whether that’s responding quickly when someone needs help or taking a post down,” said Zuckerberg.
Apple is losing out on iPhone sales
In what surprised everybody, Apple iPhone sales have been falling, sending shares down by 1.9 percent after the company released its results yesterday.
Apple was predicted to sell 52.27m devices, yet it fell short of these expectations and reached 50.76m sales mark. It is thought that consumers are waiting for the 10th anniversary iPhone which is expected to be released later this year. Despite the dip in sales, revenues for the device rose 1.2 percent in the first quarter of 2017.
For its wearables division, which includes the Apple Watch, Airpods and Beats headphones, Apple is doing pretty well. It is thought the revenues from wearables is around $5bn, despite the company having never announced sales figures for the Watch.
Alphabet makes investors happy with Google advertising revenue
Alphabet, the parent company of Google, reported its second largest quarter ever this week, with a revenue of $24.7bn, a 22 percent increase over last year’s first quarter. This is mainly down to Google’s ad revenue, despite a scandal earlier this year when brands ads were appearing next to extremist content.
The State of Technology This Week
The company’s chief financial officer Ruth Porat said in a statement:
“Our excellent results represent a terrific start to 2017, with revenues up 22 percent versus the first quarter of 2016 and 24 percent on a constant currency basis. We clearly continue to benefit from our ongoing investments in product innovation and have great momentum in our new businesses across Alphabet.”
Cloud and retail dominated Amazon’s results
Over in Seattle, Amazon was pleased with its results which saw its retail and cloud-computing sales rising in the first quarter above Wall Street’s expectations. Net sales for the retailer rose 23 percent to $35.7bn, with fees from Amazon Prime and growing ad revenue helping to boost results too.
Amazon’s cloud computing operations, known as Amazon Web Services (AWS), now accounts for a majority of the company’s operating profit, despite concerns that cloud rivals such as Microsoft would offset growth in this aspect of the business.
Shares of the company rose 3.9 percent to $954 yesterday, adding nearly $2bn to the personal fortune of Amazon’s founder and chief exec, Jeff Bezos.
The Switch is paying off for Nintendo
After launching its new console, the Nintendo Switch, last year, the company reported its operating profit jumped 121 percent in the year through March 2017.
Nintendo estimates its profit grew to $538.5m from $26.4m last year, on the bank of strong demand for the Switch. It sold 2.7m units of the console in March alone and wants to sell a further 10m throughout the current financial year.
If it achieves this, it will make the Switch on par with the Wii, Nintendo’s most successful console ever, with over 20m units in its first year.
Samsung is winning despite being hit with scandals
Samsung Electronics could has been having a rough time over the past 12 months after recovering from the Galaxy Note 7 debacle and the political scandal its leader has been caught up in. Regardless, the company reported that its operating profit was $8.75bn, in line with expectations, and its revenues had risen two percent to $44.2bn.
This meant the South Korean company had its best quarterly profit in three years, mainly thanks to strong memory chip earnings. It hopes to carry on this success over the next few months now that its new flagship smartphone, the Galaxy S8 is on sale and will hopefully recover the company’s image in the smartphone market.
Twitter is facing revenue decline
For the first time ever, Twitter reported year-on-year decline in revenue, when it announced its results this week. It announced its revenue for the last quarter was $548m, down from $595m last year but up from the $512m it was expected to report.
Despite the fall in revenue, the social network grew its monthly active years by 9m to 328m in total.As a result, Twitter is remaining positive, saying:
We believe that executing on our plan and growing our audience should result in positive revenue growth over the long term.
Shares of Twitter surged over 10 percent in pre-market trading yesterday.