US Stocks Watch: Google Revenue Jumps 14%, Apple Delays iPhone 12 Sale

Summary

• Google stock soared after its parent company Alphabet Inc reported 14 per cent jump in third quarter revenues to US$46 billion.
• Apple Inc.’s iPhone 12 sale delayed; 5G handsets will not be available till mid-November.
• Google’s advertising revenues jumped up nearly 10 per cent y-o-y, with search advertising growing at 6.5 per cent.
• Apple reported Q4 2020 total revenue of US$64.70 billion.

Tech stocks started picking up at the outset of the pandemic, and since then have been growing strong quarter-over-quarter this year. Google stock soared after its parent company Alphabet Inc reported 14 per cent jump in third quarter revenues (for the period ended September 30, 2020) to US$46 billion.  Surpassing analyst estimates from the past, Google’s net income for the third quarter was US$11.2 billion. Post this announcement, the stock rose by more than 8 per cent during intraday trade.

Fighting the pandemic times, the antitrust lawsuit, accusations over censorship and content moderation policies, the tech giant continues undeterred exerting its silent dominance. This quarter Google’s advertising revenues jumped up nearly 10 per cent y-o-y, with search advertising growing at 6.5 per cent and YouTube ad revenue surged 32 per cent.

Google also plans to bring VPN in the US on Google One app for Android first, and it will soon expand to more countries for iOS, Windows, and Mac next year.

Rivalling against Google, tech behemoth Apple is working towards launching its own version of Google Search in hopes to replace the search engine on its iOS platform. Meanwhile, Apple Inc that normally puts up new iPhone models for sale in the third quarter (September) every year, has delayed launch of iPhone 12 product line, the company’s first 5G handsets. The phones will not arrive until mid-November. Outbreak of the pandemic has disrupted Apple’s supply chain and delayed launch in markets.

Post this announcement, Apple shares fell by 4.5 per cent in early trading on Friday. The company reported Q4 2020 revenue of US$64.70 billion.

Let us delve deeper to understand the stock and financial performance of these tech behemoths – Apple Inc. (NASDAQ: AAPL, AAPL:US) and Google parent Alphabet Inc. (NASDAQ: GOOGL, GOOGL:US).

Apple Inc. (NASDAQ: AAPL, AAPL:US)

Current Stock Price: US$111.14

Apple’s year-to-date stock performance / Source: Refinitiv, Thomson Reuters

Apple shares has been the talk of the town throughout 2020 so far because of its stock split, 5G handsets and big tech-US Congressional hearings.

The stock has gained 51.39 per cent this year and the earnings-per-share (EPS) is US$3.29.

Its holds a profit-to-equity (P/E) ratio of 35.10, profit-to-book (P/B) ratio of 26.274, and profit-to-cash flow (P/CF) ratio of 25.60, as per data on TMX portal. The stock offers positive return on equity (RoA) and return on assets (RoA) at 69.25 per cent and 18.27 per cent, respectively.

Apple’s fourth quarter 2020 revenue is US$64.7 billion, marginally up from US$64.04 billion in the same quarter last year. Nearly 59 per cent of the Q4 revenue came from international sales.

Net income is US$12.67 billion, as compared to US$13.68 billion a year ago. Cash and cash equivalents of the firm stood at US$38.01 billion in Q4 2020, as compared to US$48.84 billion in Q4 2019.

The gross margin stood at US$24.68 billion for Q4 2020 while operating income is US$14.77 billion.

The tech firm paid quarterly dividend of US$0.82. The dividend yield stands at 0.711 per cent.

Alphabet Inc. (NASDAQ:GOOGL) (GOOGL:US)

Current Stock Price: US$1,639.22

Alphabet’s YTD stock performance / Source: Refinitiv, Thomson Reuters

Google stock is up 23 per cent this year and 12 per cent quarter-to-date. Earnings-per-share is US$45.45.

The stock holds profit-to-equity (P/E) ratio of 33.20, profit-to-book (P/B) ratio of 5.378, and profit-to-cash flow (P/CF) ratio of 18.90. Positive return on equity (RoE) and return on assets (RoA) at 15.79 per cent and 11.78 per cent.

Alphabet Inc, the parent company of Google, reported total revenues of US$46.2 billion in Q3 2020, as compared to US$40.49 billion in Q3 2019. This reflects the company’s broad-based growth strategy driven by increase in advertising spends on Search and YouTube, said the company in a statement. The company reported 14 per cent year-over-year increase in revenues.

Operating income of the company increased in Q3 2020 to US$11.21 billion, as compared to US$9.17 billion in Q3 2019.

Its income from Google properties i.e. Search and YouTube amount to US$31.37 billion in Q3 2020, as compared to US$28.54 billion in Q3 2019.

Advertising revenues increased by 9.8 per cent from US$33.79 billion in Q3 2019 to US$37.09 billion in Q3 2020.  

Net income in the latest quarter is US$11.24 billion, as compared to US$7.06 billion in Q3 2019. Cash and cash equivalents at the end of the period is US$20.12 billion.