Apple and Facebook generate strong profits for the markets
Apple and Facebook posted exceptional results Wednesday night, allowing US markets to climb into the second half of the quarter’s busiest earnings week.
Apple said sales jumped 54% in its fiscal second quarter, with each product category seeing double-digit growth. The company also reported a staggering profit of $ 89.6 billion, beating estimates of $ 77.4 billion, according to data from Refinitiv.
Apple also said it would increase its dividend by 7% and authorized $ 90 billion in share buybacks.
CEO Tim Cook said the company has avoided suffering the microchip shortage that has plagued other companies by burning supply buffers. But CFO Luca Maestri has warned the shortage could cost the company between $ 3 billion and $ 4 billion in revenue next quarter.
Apple shares rose nearly 3% at the start of trading.
“We have seen many explosive quarters in our many years of covering Apple, although last night’s March quarter qualifies us as one of the records in Cupertino,” said Dan Ives, Managing Director of Wedbush Securities .
Facebook, for its part, reported a 48% increase in year-over-year revenue and $ 9.5 billion in profits, up 94% from a year ago. . CEO Mark Zuckerberg highlighted the company’s push towards e-commerce, saying in a conference call with analysts that the company has more than one billion monthly active users who use Facebook Marketplace.
Facebook shares were trading over 7% higher on the pre-market.
Other companies have posted solid numbers in the past 48 hours, which lifts the markets. McDonald’s said on Thursday that its revenues had surpassed pre-pandemic levels, a sign that the U.S. recovery could gain momentum. And the construction equipment supplier Caterpillar exceeded expectations with its results Thursday morning.
Shares of the $ 126 billion company rose more than 1% on news that revenues were up 12% from a year ago, a sign that construction activity is picking up.
Investors will be on the lookout for more clues as Amazon and others report profits later Thursday and Friday to end the busiest earnings week of this quarter. Exxon, AT&T, Chevron and many more are expected to release their results Friday.