Google Earnings; Facebook Earnings, Tesla Backs Down on Reopen; Top Engineer Leaves Uber- Cuts Coming; Ford Delays Autonomous Vehicle Service Until 2022Posted: April 29, 2020
Despite the effect of the coronavirus, Google parent Alphabet still bested Wall Street expectations. 9to5google.com reports that revenue rose 13 percent to $42.1 billion from a year earlier, and net income edged up 3 percent to $6.8 billion. Ad dollars took a hit…in fact, one of Google’s biggest categories…travel…virtually disappeared. Even with that loss of a category, revenue from search ads increased 9 percent to $24.5 billion, while YouTube ad spending increased 33 percent to $4 billion. Google saw more traffic at YouTube and for search with all the working from home. The cloud-computing business had a 52 percent increase in quarterly revenue, helped by greater demands from customers for its services, and subscriptions for YouTube.
Facebook also beat both its top line and bottom line expectations, but did see stock drop over 7% after they rising costs and expenses and a narrowing operating margin. According to CNBC, Facebook’s revenue grew 24.7% year over year. Operating margin fell from 45% in 2018 to 34% in 2019. Revenue was $21.08 billion, beating the forecast of $20.89 billion. They reported 1.66 billion daily active users, bettering the expectation of 1.65. Facebook CEO Mark Zuckerberg said in a call with analysts that they are looking at an ‘intense year’, but the company is still staffing up, as opposed to cuts…although it will be more like 10% more employees rather than the originally projected 20%.
Tesla had apparently emailed factory workers over the weekend that they should report for work the first of next week. After the announcement Monday that 6 Bay Area counties…including Alameda, where the factory is located…will extend the stay home orders, the car maker has reversed itself, and it is now telling workers to stay home. Theverge.com said the plant may remain closed through May, although there is a chance that it could open sooner. San Francisco Mayor London Breed, who is speaking for the group of counties, said she expects “some lower-risk activities to be allowed to resume,” but urged residents that the goal is to “build on the progress we’ve made.” Tesla did manage to beat expectations in the first quarter of this year, but the second quarter will obviously be down, with possibly two months of an idle factory contributing to that as people continue to shelter in place.
Uber’s chief technology officer and longest-serving executive, Thuan Pham, has resigned effective May 16, the company said Tuesday. Businessinsider.com says Uber is considering staff cuts that may run as many as 5,400 due to the drastically lower volume for its core ride-hailing business during the coronavirus pandemic. That’s about 20% of the company’s work force, and could save up to a billion in expenses.
Ford will kick the can down the road, and not launch their autonomous vehicle service now until 2022. Techcrunch.com says Ford wants to study the long-term impact of the coronavirus on potential customers and their behavior. Ford did say that their deal with VW for autonomous and electric vehicles continues to be on track, however.