Twitter predicts first ever profit as multiple tech giants beat Wall Street
Fri 27 Oct 2017
The state of the tech nation looks healthier than ever as a number of digital behemoths beat Wall Street expectations in quarterly earnings results.
Amazon, Microsoft, Twitter and Google’s parent company Alphabet, all defied analyst forecasts, with Twitter predicting its first ever profitable quarter and Amazon pulling profits despite sinking billions into investments and acquisitions.
Twitter has notoriously struggled to translate its massive user base into profit, and recently had to deal with breaking the news that it had overestimated its monthly active users (MAUs), if only by around 1-2%. However, this quarter it saw a net loss of $21 million, after being adjusted for generally accepted accounting principles (GAAP).
In the same period last year, that figure was $103 million. The social media firm’s pre-tax and expense earnings came to $207 million, which Twitter expects to rise to $220-$240 million next quarter. On the basis of that, Twitter is predicting its first ever profitable quarter in the next period.
CEO Jack Dorsey commented: “This quarter we made progress in three key areas of our business: we grew our audience and engagement, made progress on a return to revenue growth, and achieved record profitability. We’re proud that the improvements we’re making to the product continue to bring people back to Twitter.”
Amazon continued to behave like a startup despite its enormous size, turning a profit even amongst huge development and investment. Sales increased 34% to $43.7 billion, $1.3 billion of which was from newly acquired Whole Foods.
The company released a plethora of highlights from its quarter, including the acquisition of Whole Foods and three new Echo devices, which Jeff Bezos, Amazon CEO, chose to focus on, saying: “Customers have purchased tens of millions of Alexa-enabled devices and given Echo devices over 100,000 5-star reviews.”
Last quarter Amazon shocked Wall Street with a poor performance. This time around, analysts were surprised once again, though for different reasons, as Amazon smashed the earnings per share (EPS) predictions by a huge 49 cents. Analysts had predicted EPS of $0.03, with the eventual result being $0.52.
Google’s parent company, Alphabet, witnessed a bumper quarter too. Revenues were up 24% year on year, up to $27 billion. Operating income was a full $2 billion up on the same period in 2016. The lion’s share of the organisation’s profit still comes from Google advertising.
An expansion drive is also noticeable when looking at the company’s headcount, which rose from just under 70,000 to more than 78,000 compared to the same time last year. This quarter, it managed to beat revenue predictions by a cool half billion.
Finally, Microsoft managed to beat EPS predictions by 12 cents as it hit $0.84. Significantly, it also managed to hit a run rate of $20 billion from its commercialised cloud revenues.
Tags:Amazon business Google Microsoft news Twitter
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