Stocks Wobble Between Small Gains and Losses – Wall Street Journal, 2/3/2021

• U.S. stocks bounced between small gains and losses Wednesday as investors reacted to a mixed batch of corporate earnings and tracked the progress in Washington toward another round of coronavirus relief spending.
• The major indexes remained higher for the week, shaking concerns about stretched valuations, a sharp run-up in prices for a handful of stocks and silver, a weak economic backdrop and the threat of new coronavirus variants. Investors have focused instead on better-than-expected corporate results, a decline in new coronavirus cases and bets that President Biden will deliver more fiscal spending in coming weeks.
• Shares in Alphabet climbed 7.3% after the parent of Google said that it had booked record revenue in the fourth quarter.
• Spotify Technology, though, slipped around 8.9% after it offered a cautious view of the year ahead early Wednesday, and Biogen fell 3.4% after it also offered downbeat guidance.
• Amazon.com edged down 0.2%. The giant online retailer late Tuesday posted record quarterly sales, marking the first time its revenue crossed more than $100 billion in a three-month period. It also said Jeff Bezos would be stepping down as CEO.
• President Biden’s administration has called for a package totaling $1.9 trillion, though a counter offer from Republicans this week was less than half of that. The Democrats are expected to make a decision in coming days on whether to start trying to quickly push into law a larger stimulus bill on their own.
• Treasury Secretary Janet Yellen has called a meeting with top financial regulators to discuss recent volatility in financial markets related to GameStop, a Treasury spokeswoman confirmed Tuesday night.

Covid-19 Live Updates: U.S. Reported Deaths Rise – Wall Street Journal, 2/3/2021

• Newly reported Covid-19 cases in the U.S. appeared to have declined from a day earlier, but deaths increased sharply, as hospitalizations for the disease continued their steady decline.
• There were 114,437 new cases reported in the U.S. for Tuesday, according to Johns Hopkins University, down from Monday’s 134,339 and a week-earlier 146,597.
• The number of reported deaths, however, rose to 3,530 Tuesday, from 2,031 a day earlier, Johns Hopkins data show. It decreased from 4,084 a week earlier.
• The seven-day moving average of newly reported cases in the U.S., which smooths out irregularities in data reporting, was 141,425 as of Tuesday, according to a Wall Street Journal analysis of Johns Hopkins data. The 14-day average was 153,896.
• When the seven-day average is lower than the 14-day average, as it has been since Jan. 15, it indicates that cases are declining.
• Hospitalizations were at 92,880, according to the Covid Tracking Project, the lowest number since Nov. 28 and the 21st straight day of declines.
• Concern about more infectious variants of the coronavirus continue to shape governments’ responses to the pandemic despite stabilizing or falling infection numbers as Europe struggles with a slow vaccine rollout.
• The Dutch government Tuesday extended a national lockdown until March 2, with a reassessment on Feb. 23, in response to new strains of the coronavirus.
• The extension of the lockdown, imposed on Dec. 19, comes despite a slight improvement in the country’s health situation.
• In Germany, the federal and regional governments will meet on Feb. 10 to discuss a possible extension of the current lockdown, which expires on Feb. 14.
• Germany recorded 9,705 new cases on Tuesday, according to the Robert Koch Institute for infectious diseases, down from 13,198 a week earlier. Daily deaths have remained high, however.

Amazon Reports Record Sales in Holiday Quarter – Wall Street Journal, 2/3/2021

• Amazon.com capped off its pandemic-fueled 2020 financial performance with record quarterly sales driven by a surge in online holiday shopping, as founder and Chief Executive Jeff Bezos said he would step down and hand over the CEO role to a new leader.
• The e-commerce giant posted fourth-quarter sales of $125.5 billion and net income of $7.2 billion.
• In the period, AWS sales rose 28% from the year-earlier period to $12.7 billion. Amazon is the world’s largest cloud provider.
• Amazon said sales in the segment that includes advertising revenue rose 66% from the previous year to roughly $8 billion.
• Physical store revenue, which includes that from Whole Foods Market, has decreased and fell 8% in the most recent quarter as the pandemic has changed shopping patterns.
• Amazon said sales for the current quarter should come in at between $100 billion and $106 billion. Wall Street has forecast sales of around $95.8 billion.
• Amazon sales for all of 2020 rose 38% year-over-year to $386.1 billion and are expected to advance again this year.
• It added more than 500,000 employees, lifting its global workforce to more than 1.3 million staff and increased its fulfillment and logistics square footage by about 50% last year.

Google Rides Global Ad Recovery to Record Revenue – Wall Street Journal, 2/3/2021

• Google rode a surge in online holiday spending to record revenue in the fourth quarter, even though it disclosed for the first-time continued losses in its closely watched cloud division.
• Google parent Alphabet posted a record $56.9 billion revenue, up from $43.2 billion a year ago.
• The company’s advertising units pulled in $46.2 billion, up nearly 22% from a year earlier.
• Analysts had forecast $52.7 billion in revenue, including $42.3 billion from advertising, according to FactSet.
• YouTube revenue soared 46% in the quarter, as advertisers flocked to the video-sharing platform amid the pandemic.
• The company said the platform now reaches more users between the ages of 25 and 49 than all cable networks combined.
• Google also revealed details about the costs of its cloud division for the first time.
• While that unit brought in $3.8 billion in revenue, overall, it lost $1.2 billion in the fourth quarter.
• Analysts had expected Google’s cloud business to bring in $3.83 billion in revenue, according to FactSet, compared with $2.61 billion a year ago.
• Alphabet’s profit also rose, to $15.7 billion, from $9.3 billion a year ago. Analysts had expected $11.9 billion.

Spotify Adds Subscribers With Focus on Podcasts – Wall Street Journal, 2/3/2021

• Spotify Technology posted stronger-than-expected subscription growth in the fourth quarter of 2020 as more listeners tuned into music and podcasts from home amid the coronavirus pandemic.
• Overall revenue for the quarter rose 17% to €2.17 billion, in line with guidance.
• Revenue from subscriptions rose 15% from the year before, to €1.89 billion. Advertising revenue grew for a second consecutive quarter after sliding in the first half of the year amid pandemic headwinds, jumping 29% to €281 million.
• At the end of the fourth quarter, Spotify had 345 million monthly active users, hitting the high end of its guidance, an increase of 27% from the same period a year ago.
• Paying subscribers, its most lucrative type of customer, grew to 155 million, up 24% from the same period a year ago, and topping expectations.
• Average revenue per user for the subscription business fell 8% to €4.26, the equivalent of $5.13, from a year ago, as the company continued to attract new subscribers via discounted plans and charge lower prices in new markets such as India and Russia.
• The company posted a loss of €125 million, or 66 European cents a share, compared with a loss of €209 million, or €1.14 a share, the year before.
• For the first quarter of 2021, the company forecast monthly active users to grow to between 354 million and 364 million, and premium subscribers to increase to between 155 million and 158 million.
• It said it expects to generate revenue of €1.99 billion to €2.19 billion.
• For this year, Spotify said it expects to grow its monthly active users to 407 million to 427 million, and grow its premium subscribers to 172 million to 184 million. It forecast revenue growth between €9.01 billion and €9.41 billion.

EA hikes annual sales outlook as lockdown boost for videogames continues – Reuters, 2/3/2021

• Electronic Arts on Tuesday raised its annual sales outlook, betting on strong sales of its sports titles including “FIFA 21” and “Madden NFL 21” as more people turn to videogames to keep themselves entertained during COVID-19 lockdowns.
• The company’s adjusted revenue for the holiday-quarter, ended Dec. 31, was $2.4 billion, narrowly beating analysts’ average estimate of $2.39 billion, according to IBES data from Refinitiv.
• EA said new players on its battle royale game “Apex Legends” jumped 30% year-over-year. The soft launch of its mobile version is expected in the next three to six months, Chief Financial Officer Blake Jorgenson told Reuters.
• Shares of the company, however, fell 5% in extended trading after EA’s 98 cents adjusted profit forecast for the current quarter missed analysts’ average estimate by 2 cents.
• EA raised its full-year adjusted sales forecast to $6.08 billion from $5.95 billion, edging past analysts’ estimates of $6.01 billion, according to Refinitiv IBES data.

Chipotle’s Covid-19 Costs Weigh on Its Profit – Wall Street Journal, 2/2/2021

• Chipotle Mexican Grill said costs related to the coronavirus pandemic have dented profit even as online orders boost sales.
• Sales of $1.6 billion hit expectations.
• A same-store sales increase of 5.7% over the previous year was roughly in line with expectations.
• The chain said online orders accounted for nearly half of its sales during the latest quarter and were up 177% from a year earlier.
• The chain said that delivery now accounts for about 25% of its sales, and that it is testing a range of higher prices on those to-go orders to improve profit.
• For the quarter, Chipotle reported earnings of $6.69 a share on income of $191 million.
• Chipotle said about 60% of its dining rooms were currently open for limited indoor dining, down from 85% of locations offering indoor or patio dining in October.

Amgen issues 2021 outlook below Street view, shares dip – Reuters, 2/3/2021

• U.S. biotech Amgen on Tuesday provided a 2021 earnings forecast below Wall Street estimates and said it had paused or halted enrollment for clinical trials of three cancer drugs.
• Net profit for the quarter fell 3% to $2.76 per share. Revenue rose 7% to $6.6 billion, in line with analysts’ estimates.
• Sales of rheumatoid arthritis drug Enbrel fell 5% to $1.27 billion, shy of analysts’ estimate of $1.3 billion.
• Sales of newer migraine drug Aimovig totaled $104 million for the quarter, short of the $115 million projected by analysts.
• But sales of cholesterol fighter Repatha rose 27% to $253 million, beating Wall Street estimates of $223 million.
• For 2021, Amgen forecast adjusted earnings of $16.00 to $17.00 per share, putting the midpoint below analysts’ estimates of $17.03 per share, according to IBES data from Refinitiv.
• The full-year revenue forecast of $25.8 billion to $26.6 billion was more in line with analyst projections of $26.45 billion.
• The company also said it expects net selling prices for its drugs to fall by a rate in the mid-single digits this year – after a drop of 6% in 2020 – and the COVID pandemic will continue to impact sales.

Match tops sales estimates as Tinder, Hinge keep sparks flying – Reuters, 2/2/2021

• Match Group beat Wall Street estimates for fourth-quarter revenue on Tuesday as demand for its dating apps Tinder, Hinge and Pairs jumped in regions where COVID-19 cases have declined.
• The company’s total revenue rose 19% to $651.4 million, beating analysts’ estimates of $648.8 million, according to IBES data from Refinitiv.
• Average subscribers on Match’s apps increased about 12% to 10.9 million in the quarter ended Dec.31.
• Match’s flagship app Tinder, with 66 million average monthly active users, dominated the dating market worldwide with 53.8% of the market share during the quarter, according to analytics firm Apptopia.
• Net earnings attributable to Match shareholders rose to $140.6 million, or 48 cents per share, from $100.4 million, or 48 cents per share, a year earlier.

Capri beats profit estimates as fewer holiday discounts boost margins

• Capri Holdings beat holiday-quarter profit estimates on Wednesday as the luxury fashion house boosted its margins by selling more products at full price and cutting manufacturing costs, sending its shares up nearly 7%.
• Capri’s total revenue fell 17% to $1.30 billion in the third quarter ended Dec. 26 as store closures in major European markets and no holiday products line from its Jimmy Choo brand crimped sales.
• About 50% of Capri’s stores in the Europe, Middle East and Africa region are still closed, the company said.
• The company reported a third-quarter net attributable profit of $179 million, or $1.18 per share, down from $210 million, or $1.38 per share, a year earlier.
• The company said it expects a similar decline in revenue in the fourth quarter. Analysts estimate revenue to fall by 5.4% and profit to be at 66 cents per share.
• The company said it expects to return to pre-pandemic revenue and earnings levels by fiscal 2023, which starts next year.