Stocks Waver in Morning Trading, Pausing Market Rally – Wall Street Journal, 2/10/2021

• U.S. stocks wavered on Wednesday, another sign that investors are taking a breather after pushing markets to record highs.
• The Dow Jones Industrial Average slipped less than 0.1%, the S&P 500 fell 0.2% and the Nasdaq Composite fell 0.7%.
• Both the S&P 500 and the Dow closed lower on Tuesday after notching record highs earlier in the week.
• Still, investors are betting that President Biden’s $1.9 trillion stimulus package will help bolster the economy while vaccinations help reduce Covid-19 fatalities. Investor sentiment has also been buoyed by companies’ quarterly results that have largely proved to be better than expected.
• With nearly 70% of the S&P 500 already reporting fourth-quarter earnings, profits for the group are up 5.1%, better than an expected contraction of 9.2%, according to FactSet. That is also a vast improvement from the third quarter’s 5.6% profit contraction. First-quarter earnings are expected to rise 21%.
• Comments from Federal Reserve Chairman Jerome Powell, scheduled for 2 p.m. ET, are also likely to be closely scrutinized for any hints on the health of the economy and future moves on monetary policy.
• U.S. Treasury yields, which move inversely to the price, ticked down to 1.147% after settling at 1.156% on Tuesday.
• Hong Kong’s Hang Seng Index rose 1.9% by the close of trading, while Japan’s Nikkei 225 gained 0.2%.

Covid-19 Live Updates: Newly Reported U.S. Cases Stay Below 100,000 – Wall Street Journal, 2/10/2021

• Newly reported coronavirus cases in the U.S. remained under the 100,000 mark for the third day in a row, as the White House said it planned to boost vaccine distribution to states.
• The U.S. reported more than 92,000 new coronavirus cases for Tuesday, according to data compiled by Johns Hopkins University and published early Wednesday.
• Tuesday’s tally was a slight increase from the previous day’s revised total of 89,727, but sharply lower than peak levels reached in January, according to Johns Hopkins.
• Hospitalizations in the U.S. because of Covid-19 fell below 80,000 for the first time since Nov. 18 as of Tuesday, and the number of patients requiring treatment in intensive care units was 16,129, the lowest level since Nov. 20, according to the Covid Tracking Project.
• The country recorded 3,031 fatalities from Covid-19 for Tuesday, pushing the nation’s total death toll to more than 468,000.
• The Biden administration plans to increase weekly Covid-19 vaccine doses to states, territories and tribes to 11 million, up from 8.6 million weekly doses three weeks ago, for a total increase of 28%.
• The increase, announced Tuesday, will be continued for at least three weeks, officials said.

Lyft says cost cuts, coming ride recovery could bring third-quarter profit – Reuters, 2/10/2021

• Lyft said on Tuesday it could make an adjusted profit by the third quarter of this year despite the pandemic thanks to additional cost cuts and an expected rebound in ride-hail demand beginning in the second quarter of 2021.
• The company reported roughly $570 million in fourth-quarter revenue, a 44% decline on a yearly basis, but an uptick of 14% compared with the third quarter.
• Analysts on average had expected the company to post revenue of $562 million, according to Refinitiv data.
• Lyft’s number of active riders in the fourth quarter decreased by more than 45% on a yearly basis to 12,552, but revenue per active rider rose by $1 to $45.40 – a record number, the company said.
• Ride volumes were down 52% in December and 51% in January compared with the previous year.
• Lyft said ride demand in the first quarter could be flat or slightly lower than during the last three months of 2020.
• Lyft reported an adjusted EBITDA loss of $150 million in the fourth quarter. That compares with a $185 million loss projected by analysts on average.

Cisco revenue declines for fifth straight quarter, shares fall – Reuters, 2/10/2021

• Cisco Systems on Tuesday reported a decline in revenue for a fifth straight quarter, as enterprise clients spent less on its network infrastructure products for offices due to the rise of remote working.
• The company’s total revenue fell slightly to $11.96 billion in the second quarter ended Jan. 23, from $12.01 billion a year earlier. Analysts were expecting a figure of $11.92 billion, according to IBES data from Refinitiv.
• Chief Financial Officer Richard Herren said on a call with analysts that the infrastructure platforms unit, whose sales fell 3% in the quarter, took the biggest hit from the COVID-19 pandemic.
• Revenue from the company’s services business rose 2% to $3.39 billion.
• Cisco said it expects third-quarter revenue to increase between 3.5% to 5.5%, which implies a range of $12.4 billion to $12.64 billion compared with analysts’ estimates of $12.35 billion.

GM Bounces Back with Strong Fourth-Quarter Profit – Wall Street Journal, 2/10/2021

• General Motors posted strong fourth-quarter earnings and offered a bright profit outlook for this year despite an expected hit from a global semiconductor shortage.
• Revenue rose about 22% from the strike-marred fourth-quarter of 2019, to $37.52 billion.
• A combination of tight inventories and strong demand for its most expensive models also lifted pricing and profit margins to record levels.
• Its fourth-quarter pretax profit totaled $3.71 billion, a record for that quarterly period and up from a small gain in the year-earlier period. That amounted to $1.93 a share, better than the average analyst estimate of $1.60.
• GM on Wednesday reinstated profit guidance for the first time since the spring, forecasting pretax income of $10 billion to $11 billion for the full year 2021, or $4.50 to $5.25 a share.
• That includes the $1.5 billion to $2 billion hit expected from production stoppages stemming from the industrywide chip shortage.
• The company said on Tuesday it plans to extend a shutdown at several North American factories due to tight chip availability.
• At other plants, it is building some vehicles without certain computer chips and storing them to add the parts once they arrive, the company said.

Twitter investors look past warning of slower user growth and eye rising ad sales – Reuters, 2/10/2021

• Twitter on Tuesday beat Wall Street targets for quarterly sales and profit and followed its social media peers to forecast a strong start to 2021 as ad spending rebounds from a rock bottom.
• Total revenue came in at a record $1.29 billion, an increase of 28% year over year.
• Ad revenue was $1.15 billion, up 31% from the same period a year ago and beating analyst estimates.
• In the fourth quarter, Twitter said it had 192 million average monetizable daily active users (mDAU) – its term for the number of daily users who can view ads.
• That’s up 26% from a year earlier. Analysts were expecting 196.5 million, according to IBES data from Refinitiv.
• Net income rose to $222.1 million, or 27 cents per share, from $118.8 million, or 15 cents per share a year earlier.
• Excluding items, Twitter earned 38 cents per share, beating estimates of 31 cents.
• Twitter said it expected total revenue in the current quarter to be between $940 million and $1.04 billion.

Working out from home: pandemic powers Under Armour online sales, surprise profit – Reuters, 2/10/2021

• Online demand for Under Armour’s apparel and accessories, and stronger Asia-Pacific sales helped it post a surprise holiday-quarter profit and top revenue estimates on Wednesday, sending its shares up 5% in premarket trade.
• Overall revenue fell about 3% to $1.40 billion in the three months ended Dec. 31, but topped a Refinitiv IBES estimate of $1.27 billion.
• Under Armour said its e-commerce sales rose 25%, helping its high-margin direct-to-consumer segment jump 11%.
• The Baltimore-based company reported a net income of $184.5 million, or 40 cents per share, compared with a loss of $15.3 million, or 3 cents per share, a year earlier.
• Under Armour also said it expects revenue growth percentage to be in high single-digits in 2021, boosted by growth in its North America as well as international markets, but the forecast fell short of market estimates of a 12.65% growth.
• The apparel and shoes maker also forecast 2021 adjusted profit per share to be between 12 cents and 14 cents, in line with estimates.

Coca-Cola expects sales growth to return in 2021 as profit exceeds forecasts – Reuters, 2/10/2021

• Coca-Cola on Wednesday forecast a return to organic revenue growth this year after a pandemic-hammered 2020 and beat Wall Street estimates for quarterly profit on aggressive cost cutting, sending its shares up 2% in early trading.
• Net revenue fell 5% to $8.60 billion in the three months ended Dec. 31, just short of expectations of $8.63 billion, according to IBES data from Refinitiv.
• Organic revenue declined 9% last year, as pandemic-related curbs closed the doors of non-retail channels such as restaurants, cinemas and sporting events that account for over a third of the company’s sales.
• On a per share basis, the Atlanta-based company earned 47 cents per share, 5 cents more than estimates.
• For 2021, the company expects adjusted earnings to grow in the high-single digits to low-double digits and organic revenue to rise in the high-single digits.
• Meanwhile, the company warned it expects a liability of about $12 billion related to a dispute with the U.S. Internal Revenue Service (IRS) on how much it charged foreign affiliates for the rights to make and sell Coke products abroad.

Barbie, Hot Wheels power Mattel’s holiday-quarter sales beat – Reuters, 2/10/2021

• Mattel beat quarterly sales estimates on Tuesday as parents splurged on Barbie dolls and Hot Wheels cars for their children during a holiday season that was dulled by the COVID-19 pandemic.
• Mattel’s overall net sales rose about 10% to $1.63 billion for the fourth quarter, beating analysts’ estimates of $1.58 billion.
• The toymaker said worldwide gross billings for Barbie, Mattel’s biggest brand, rose 19% in the fourth quarter, while Hot Wheels billings rose 13%. Gross billings excludes sales adjustments such as trade discounts.
• Mattel reported adjusted earnings of 40 cents per share, beating estimates of 23 cents per share.
• Mattel forecast currency-neutral net sales to rise by a mid-single-digit percentage in 2021, compared with a 3% increase in 2020. Analysts expect a 4.6% rise in sales this year, according to IBES data from Refinitiv.
• The company also announced a new cost-cutting program, aimed at saving about $250 million in costs by 2023. Mattel said it expects to spend between $100 million to $125 million to implement it.

TikTok Sale to Oracle, Walmart Is Shelved as Biden Reviews Security – Wall Street Journal, 2/10/2021

• A U.S. plan to force the sale of TikTok’s American operations to a group including Oracle and Walmart has been shelved indefinitely, people familiar with the situation said, as President Biden undertakes a broad review of his predecessor’s efforts to address potential security risks from Chinese tech companies.
• Discussions have continued between representatives of ByteDance and U.S. national security officials, the people said.
• Those discussions have centered on data security and ways to prevent the information TikTok collects on American users from being accessed by the Chinese government, they said.
• But no imminent decision on how to resolve the issues surrounding TikTok is expected as the Biden administration determines its own response to the potential security risk posed by Chinese tech companies’ collection of data.

Match Group Buys South Korean Social-Media Company for $1.73 Billion – Wall Street Journal, 2/10/2021

• Online-dating company Match Group has reached an agreement to acquire South Korean social-media company Hyperconnect for $1.73 billion, broadening its services beyond connecting people in their love lives.
• Hyperconnect, based in Seoul, has developed two video apps that focus on helping people interact one-on-one and with new communities.
• Hyperconnect’s first app, Azar, offers live video and audio chat and can instantly translate voice and text for users that speak different languages.
• Hyperconnect’s other app, Hakuna Live, is a social live-streaming app that provides group video and audio broadcasts.
• The apps broaden Dallas-based Match Group’s software offerings to include linking casual friends. Match operates several dating apps, including Tinder, Hinge and OkCupid, as well as its namesake brand.