US companies increasingly fish for growth overseas
By Michael Liedtke, AP
July 29, 2014, 12:01 am TWN
SAN FRANCISCO--Major U.S. companies are starting to reap their most rapid growth in fertile lands of opportunity far from home.
Technology trendsetters Apple Inc., Google Inc., Facebook Inc. and Netflix Inc. all mined foreign countries to produce earnings or revenue that exceeded analysts' projections in their latest quarters. Prodded by the steadily rising demand for Internet access and online services in developing countries, these technology companies will likely be wading even deeper into overseas markets for years to come.
"The philosophy is to start your growth in the states and then take your fight overseas," says BGC Financial analyst Colin Gillis "That's what the big guys are doing."
The intensifying international focus extends beyond technology. Century-old companies such as Coca-Cola Co. and Ford Motor Co. also are hoping to make more money in countries including China and India.
Few U.S. industries are tying their fortunes to overseas markets as aggressively as the technology sector, where new sources of revenue are often just a matter of equipping people with a computing device and an Internet connection.
Major Companies Set Trends
Soaring sales of iPhones in China, Russia, India and Brazil during the April-June period helped Apple overcome softening demand for the device in the U.S. and Europe, where consumers seem to be more interested in waiting for the autumn release of a new iPhone that's expected to feature a larger screen.
Google generated 58 percent of its revenue outside the U.S. in its second quarter, the highest level yet for the Internet's most powerful company.
Facebook already gets 55 percent of its revenue overseas, and the growth in those markets is outpacing by what's happening in the U.S. The social networking service has attracted 1.1 billion users in foreign markets versus 200 million in the U.S. and Canada.
Netflix's Internet video service added 1.1 million international subscribers, nearly doubling the number it gained in the U.S during the April-June quarter. The company expects the trend to continue as Netflix enters six more European markets, including France and Germany, in September.