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Daily Market Report | May 4, 2022

US FINANCIAL MARKET

Stocks Fall Ahead of Fed Decision – Wall Street Journal, 5/4/2022

  • Technology stocks slid Wednesday, putting pressure on the broader market ahead of the Federal Reserve’s interest-rate decision.
  • The S&P 500 fell 0.6% in morning New York trading. The tech-focused Nasdaq Composite Index shed 1.5%, while the Dow Jones Industrial Average was down 0.3%.
  • Fed officials are expected to announce Wednesday afternoon that they are raising interest rates by a half percentage point and approving plans to start shrinking the central bank’s $9 trillion asset portfolio next month.
  • Investors will get a chance to hear from Fed Chairman Jerome Powell Wednesday afternoon when he addresses reporters after the conclusion of the central bank’s policy meeting.
  • Technology stocks led declines in the broader market Wednesday. The group has taken a hit this year as investors facing higher interest rates have shied away from companies with higher valuations.
  • Meta Platforms, Amazon.com, Netflix and Alphabet each lost more than 1%.
  • Corporate earnings also spurred volatility in the market Wednesday.
  • Airbnb shares rose 1.9% after the company said it expects to post its first full-year net profit this year.
  • Starbucks shares added 5.4% after the coffee chain said profits and sales grew in the most recent quarter.
  • Lyft shares slumped 34 % after the ride-hailing company said it would invest in the current quarter to ensure adequate driver supply and grow its ride-hailing platform, spooking investors as the spending weighs on operating profit.
  • Meanwhile, government bond prices fell, with the yield on the benchmark 10-year Treasury note hovering around 3%, compared with 2.957% Tuesday. Bond yields and prices move in opposite directions.
  • The pan-continental Stoxx Europe 600 fell 0.4%. Hong Kong’s Hang Seng fell 1.1%, and South Korea’s Kospi edged down 0.1%. Markets in mainland China and Japan were closed for a holiday

AMD says data center boom will boost revenue; shares rise – Reuters, 5/4/2022

  • Advanced Micro Devices on Tuesday forecast stronger- than-expected full year and second-quarter revenue, with the data center boom boosting demand for its chips, and its shares rose in after-hours trade.
  • AMD’s first-quarter revenue came in at $5.89 billion, above analysts’ average estimate of $5.52 billion, according to Refinitiv IBES data.
  • On an adjusted basis, AMD earned $1.13 per share, during the quarter, compared to Street’s estimates of 91 cents per share, according to Refinitiv data.
  • The company said it expects revenue of about $6.5 billion, plus or minus $200 million for the current quarter. Analysts on average were expecting revenue of $6.38 billion, according to Refinitiv data.
  • For the full year it forecast $26.3 billion, up about 60%, and ahead of analysts estimates of $25.145 billion according to Refinitiv IBES data.

Uber reports surging revenue as drivers return, but posts massive loss on investments – CNBC, 5/4/2022

  • Uber on Wednesday reported surging revenue during the first quarter as the ride-hailing company said it’s recovering from its coronavirus lows and wouldn’t have to put up “significant” investments to keep drivers on the platform.
  • But it also reported a $5.9 billion loss during the period that was largely attributed to the revaluation of equity investments.
  • The company’s shares were down more than 10%.
  • Uber’s revenue rose 136% year over year to $6.9 billion.
  • Mobility (gross bookings): $10.7 billion, up 58% year over year
  • Delivery (gross bookings): $13.9 billion, up 12% year over year
  • Uber reported 1.71 billion trips on the platform during the quarter, up 18% from the same quarter a year ago. Monthly active platform consumers reached 115 million, up 17% year over year.
  • For the second quarter, Uber anticipates gross bookings of between $28.5 billion and $29.5 billion.
  • In addition, it expects adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, of between $240 million and $270 million.

Lyft Shares Plunge on Weak Earnings Outlook – Wall Street Journal, 5/4/2022

  • Lyft said it would invest in the current quarter to ensure adequate driver supply and grow its ride-hailing platform, spooking investors as the spending weighs on operating profit.
  • Lyft said its first-quarter revenue rose 44% to $876 million, and it reported $55 million in adjusted earnings before interest, taxes, depreciation and amortization.
  • Ridership increased 20% in February from January, Mr. Zimmer said. Lyft recorded average revenue per rider of $49.18, second only to the last quarter of 2021.
  • Ridership is still at roughly 70% of the pre-pandemic fourth quarter of 2019, Lyft Chief Executive Logan Green said on a call with analysts.
  • It projected between $950 million and $1 billion of revenue in the current quarter.
  • Ms. Paul said some of the costs to offer incentives to drivers—such as bonus payments for rides given—will be passed on to consumers through higher prices. Other costs, she said, would weigh on the company’s profitability.

Airbnb Revenue Climbs on Record Nightly Bookings and Higher Prices – Wall Street Journal, 5/4/2022

  • Airbnb said it expects to post its first full-year net profit this year after its revenue climbed 70% last quarter as people continued to book suburban rentals despite hosts raising prices.
  • The San Francisco company posted $1.5 billion in revenue in the three months through March. Analysts polled by FactSet on average had predicted $1.45 billion in revenue.
  • Airbnb’s gross bookings—the value of bookings made on its platform—grew 67% to $17.2 billion, a record.
  • Stays of 28 days or more made up 21% of bookings in the first quarter, down from 24% in the same period a year earlier but above prepandemic levels.
  • Airbnb’s loss narrowed to $19 million in the first quarter from $1.17 billion in the year-earlier quarter, when its bottom line was hurt by costs tied to the debt it took to ride out the pandemic, among other things. Its first-quarter loss was smaller than the $179 million analysts had projected.
  • The company said it expects second-quarter revenue to be between $2.03 billion and $2.13 billion, higher than Wall Street’s average estimate of $1.97 billion. Airbnb said early bookings show strong demand for the summer. By the end of April, the company said it had over 30% more nights booked for summer travel than the same period in 2019.

Starbucks misses sales estimates on China COVID curbs, suspends guidance – Reuters, 5/4/2022

  • Starbucks suspended its guidance for the rest of its fiscal year on Tuesday as sales growth missed Wall Street targets due to China’s tough COVID-19 curbs.
  • Total net revenue rose to $7.64 billion from $6.67 billion a year earlier, as the company opened 313 net new stores during the quarter. Analysts had expected $7.59 billion in quarterly revenue.
  • Global comparable sales at Starbucks, which recently brought Schultz back to lead the company amid a wave of unionization at its U.S stores, rose 7% in the second quarter, while analysts polled by Refinitiv had expected 7.1% growth.
  • Comparable sales in China, where the chain has rapidly expanded in recent years to tap rising coffee consumption, declined 23%, overshadowing 12% growth in North America.
  • Higher costs for labor, freight and commodities ate into North American operating margins, which contracted to 17.1% from 19.3% in the prior year.
  • Despite already raising wages since last year, the company will invest an additional $200 million in fiscal 2022 to lift pay for store managers, increase training, revitalize its “Coffee Master” program for baristas and launch an internal app to communicate directly with its 240,000 U.S. employees.
  • The new money will bring total investments in employees and cafes to $1 billion this fiscal year alone.

Marriott Sales Soar on Surging Travel Demand – Wall Street Journal, 5/4/2022

  • Marriott International first-quarter sales jumped as the hotel giant said it saw the largest surge in global travel demand since the onset of the pandemic.
  • The company, with nearly 8,000 properties globally, reported an 81% jump in first-quarter sales to $4.2 billion.
  • The company said that global occupancy rose from 45% in January, impacted by the spread of the Omicron variant, to 64% in March, less than 10 percentage points below prepandemic levels.
  • Marriott’s average daily room rates for March rose to 5% above 2019 levels.
  • The company said systemwide occupancy in the U.S. and Canada came in at 58%, 11% below prepandemic levels.
  • RevPAR was $96.78, less than 15% below 2019 levels.
  • Marriott has seen its total costs balloon 63% over the past year to $3.64 billion, including $3.18 billion in reimbursed expenses.
  • The company posted net income of $377 million, or $1.14 a share, compared with a loss of $11 million, or 3 cents a share, a year earlier.
  • The company also declared a 30-cent-per-share dividend payable at the end of the current quarter. Mr. Capuano said the company expects to resume share buybacks later this year, assuming travel demand remains strong and that the company remains within its target leverage ratio.

Moderna Revenue Triples on Soaring Covid-19 Vaccine Sales – Wall Street Journal, 5/4/2022

  • Moderna said that its first-quarter revenue and profit tripled from a year earlier on higher sales of its Covid-19 vaccine and that a fall booster-shot campaign could drive continued sales gains.
  • The biotechnology company’s revenue topped $6 billion in the period ended March 31, beating analyst expectations and rising from $1.94 billion a year earlier, driven almost entirely by sales of its messenger RNA-based vaccine, branded as Spikevax.
  • Moderna reported net income of $3.66 billion for the first quarter of 2022, compared with $1.22 billion in the same period a year ago.
  • The Cambridge, Mass., company also reiterated its forecast of the value of signed Covid-19 vaccine supply contracts that could yield continued sales growth for full-year 2022, as the company seeks to widen use of its vaccine.
  • Moderna said it has $21 billion in advance purchase agreements for full-year 2022, after posting $18.5 billion in revenue for 2021.

CVS Sales Up 11%, Lifted by Covid-19 Demand – Wall Street Journal, 5/4/2022

  • CVS Health first-quarter sales rose more than 11% as the pharmacy chain continued to benefit from administering Covid-19 vaccines and selling at-home tests.
  • The company logged $76.83 billion in revenue in the period, which included a 9.2% sales increase in the retail segment, as consumers scooped up take-home test kits. At the same time, in-store Covid-19 testing decreased.
  • The company’s same-store sales, which include stores open at least 12 months plus digital channels, grew by 10.7% in the first quarter from a year earlier, shortly after the first vaccines had been authorized.
  • CVS has seen its costs rise, in part due to wage increases, over the past year. Total cost of products sold rose to $45.51 billion in the quarter, up from $40.90 billion a year earlier.
  • In the three months ended March 31, CVS posted a quarterly profit of $2.32 billion, or $1.74 a share, up from $2.22 billion, or $1.68 a share, in the year-ago period.
  • The company raised its 2022 earnings outlook slightly, now expecting per-share earnings between $8.20 a share and $8.40 a share, an increase of 10 cents on either end.
  • CVS expects to administer 18 million vaccines this year, a decline of about 70% from last year; demand for take-home tests will likely fall by 50%, the company said.

Ford reports smaller sales decline in April while chip shortage weighs on supply – CNBC, 5/4/2022

  • Ford Motor on Wednesday reported a 10.5% decline in April sales compared with a year ago, notably narrowing its losses compared with recent months.
  • Ford’s monthly U.S. sales in February and March were down by more than 20% due to the problem.
  • Sales of Ford’s crucial F-Series full-size pickup trucks, including the F-150, continue to struggle due to supply problems. Last month sales were down 22%, pushing them to be down nearly 30% for the year.
  • F-Series sales did increase by 15% compared with March, signaling improved production and supplies.
  • “While industry semiconductor chip shortages persist, improved inventory flow in April delivered a significant share gain of 1 percentage point over a year ago with Ford outperforming the industry,” Andrew Frick, Ford vice president of sales, distribution and trucks, said in a statement.

Regeneron’s COVID drug sales outside U.S. help revenue beat – Reuters, 5/4/2022

  • Regeneron Pharmaceuticals reported better-than-expected revenue aided by sales from its COVID-19 antibody outside the United States and strong demand for its blockbuster drugs Dupixent and Eylea.
  • Shares of Regeneron were marginally up at $668 in premarket trade, after the company said its overall sales grew 17% to $2.97 billion in the first quarter, which was higher than the average analyst estimate of $2.72 billion, as per Refinitiv IBES data.
  • Eczema treatment Dupixent and macular degeneration drug Eylea recorded sales growth of 11% and 43%, respectively.
  • Regeneron’s net profit in the quarter ended March 31 fell 13% to $974 million from a year earlier.

Pizza Hut staffing crunch takes slice out of parent Yum Brands sales – Reuters, 5/4/2022

  • Yum Brands missed Wall Street estimates for quarterly revenue and profit on Wednesday, as a fall in U.S. sales at Pizza Hut chain due to staffing shortages overshadowed growth at KFC and Taco Bell.
  • Total revenue rose to $1.55 billion from $1.49 billion a year earlier, but missed estimates of $1.59 billion.
  • For Louisville, Kentucky based Yum, comparable sales rose 3% in the quarter ended March 31, missing analysts’ average estimate for a 3.8% increase, according to Refinitiv data.
  • Same-store sales at U.S. Pizza Hut locations fell 6% in the first quarter, while it rose 1% and 5% at KFC and Taco Bell restaurants, respectively.
  • Net income rose to $399 million, or $1.36 per share, from $326 million, or $1.07 per share, a year earlier.
  • Excluding one-time items, Yum Brands earned $1.05 per share, missing estimates of $1.07.

Tupperware Stock Tumbles After Guidance Withdrawn – Wall Street Journal, 5/4/2022

  • Tupperware Brands shares fell more than 30% after the company pulled its full-year guidance and said fixing operations would take longer than expected.
  • The food-storage container company said Wednesday that its sales fell 16% to $348.1 million in the quarter ended March 26. Analysts had expected sales of $356.8 million, according to FactSet.
  • Tupperware’s quarterly profit from continuing operations fell from $44 million, or 82 cents a share, to $2.5 million, or 5 cents a share. Stripping out one-time charges, adjusted earnings were 12 cents a share, below the 52 cents a share expected by Wall Street.
  • The decrease in profit was mostly driven by lower sales volumes as well as higher resin and logistics costs. Chief Executive Miguel Fernandez said the company wasn’t able to raise prices quickly enough to keep pace with rising costs.

Match Group’s Shar Dubey to step down as CEO – Reuters, 5/4/2022

  • Match Group’s Shar Dubey will step down as chief executive officer, the Tinder owner said on Tuesday, and will be succeeded by Bernard Kim, mobile gaming maker Zynga’s president, effective May 31.
  • Total revenue rose 20% to $799 million in the first quarter, beating analysts’ estimates of $794.2 million, according to Refinitiv data.
  • For the first quarter, Tinder’s direct revenue grew 18% from the year-ago quarter.
  • The company’s board has also authorized a buyback of up to 12.5 million outstanding shares.

New York Times adds thousands of subscribers; weak ad sales weigh on revenue – Reuters, 5/4/2022

  • The New York Times added 387,000 digital subscribers in the first quarter on an increase in readership due to the Russia-Ukraine crisis, while the publisher missed quarterly revenue estimates on weak digital ad sales growth.
  • Total first-quarter revenue was $537.4 million, compared with estimates of $546 million, according to Refinitiv data.
  • The company’s digital advertising revenue rose 12.6% as advertisers cut spending following the conflict in Ukraine, inflationary pressures and macroeconomic uncertainties.
  • The company had a total of 9.1 million subscribers at the end of the first quarter.
  • As the publisher inches closer to its subscriber goal of 15 million by 2027, The Athletic is eating into overall profits. The sports website lost $6.8 million over February and March.
  • The Times’ operating profit shrank to $6.28 million from $51.66 million a year earlier. On an adjusted basis, the company earned 19 cents per share just ahead of estimates.

Livent beats profit estimates, raises forecast on higher lithium demand – Reuters, 5/4/2022

  • Livent on Tuesday posted a better-than-expected quarterly profit and bolstered its 2022 revenue forecast as it benefited from higher demand for lithium used in electric-vehicle batteries, sending its shares surging 14%.
  • Revenue rose 56% to $143.5 million. Analysts on average were expecting revenue of $140.15 million.
  • Livent posted a net profit of $53.2 million, or 28 cents per share, for the first quarter, compared with a loss of $800,000, or 1 cent per share, a year earlier
  • The Philadelphia-based company now expects annual revenue of $755 million to $835 million from its previous forecast of $540 million to $600 million.

Shanghai Lockdown Reignites Supply-Chain Problems for U.S. Companies – Wall Street Journal, 5/4/2022

  • Some U.S. companies are warning that Covid-19 lockdowns in Shanghai and elsewhere in China are denting sales, disrupting operations and putting added strain on supply chains that could be felt well into the summer.
  • Shanghai, a manufacturing and shipping hub of 25 million residents, accounted for 3.8% of China’s gross domestic product in 2021 and 7.2% of the country’s exports, according to Bank of America.
  • Even if the lockdowns lift soon, the ripple effects may be felt for months as many of the cargo ships currently waiting outside Shanghai will make their way to the U.S., where ports are starting to improve after months of congestion.
  • “That certainly is going to make its way back into the U.S. here this summer,” said J.B. Hunt Transport Services Inc.’s Chief Commercial Officer Shelley Simpson on a conference call Thursday. The freight carrier transports goods by truck and rail and its operations include last-mile delivery services.

Elon Musk Plans to Take Twitter Public a Few Years After Buyout – Wall Street Journal, 5/4/2022

  • Elon Musk, who has agreed to take Twitter private in a $44 billion deal, has told potential investors he could return the social-media company to public ownership after just a few years.
  • Mr. Musk said he plans to stage an initial public offering of Twitter in as little as three years of buying it, according to people familiar with the matter. The deal is expected to close later this year, subject to conditions including the approval of Twitter shareholders and regulators, the company has said.
  • Mr. Musk, the Tesla chief, has been speaking to investors such as private-equity firms, which could help lower the $21 billion he plans to kick in to help pay for the deal.
  • Private-equity firms often take companies private with an eye toward fixing them up outside of the spotlight and then taking them public again within five years or so.
  • Mr. Musk’s signal that he plans to do something similar could help assure potential investors that he would work quickly to improve Twitter’s business operations and profitability.

Roku and Apollo Global Team Up to Bid for Stake in Cable Channel Starz – Wall Street Journal, 5/4/2022

  • Roku has teamed with private-equity firm Apollo Global Management to bid for a minority stake in the pay-TV and streaming service Starz, which is known for series like “Outlander” and “Power,” according to people familiar with the situation.
  • In November, movie and television production company Lions Gate Entertainment Corp. said it was considering selling or spinning off Starz. Lions Gate acquired Starz for $4.4 billion in 2016, but has struggled to fulfill the promise of the deal, with the combined company now valued at around $3 billion.
  • Selling a stake in Starz would help Lions Gate raise cash and place a value on the premium channel, the people familiar with the situation said.
  • Roku and Apollo could acquire up to a 20% stake in Starz, but the tandem doesn’t agree on valuation with Lions Gate, one of the people said.

US ECONOMY & POLITICS

Fed to Tighten With Big Hike, Asset Runoff – Bloomberg, 5/4/2022

  • Federal Reserve Chair Jerome Powell is poised to unleash the U.S. central bank’s most aggressive action to battle inflation in decades, but investors will be focused on parsing his words to see if even bigger moves are ahead.
  • The Federal Open Market Committee is expected to raise interest rates by a half point at the conclusion of its two-day policy meeting on Wednesday, its largest hike since 2000, and also announce plans to reduce the size of its bloated $8.9 trillion balance sheet.
  • A 50 basis-point increase would be the largest since Alan Greenspan’s tenure as chairman.
  • Add in the impact of shrinking the balance sheet and the scale of the policy shift recalls the 1980s measures of his predecessor, Paul Volcker, reflecting central bankers’ sense of urgency to bring down inflation at the highest level in four decades.
  • Markets have priced in such a move — and some investors are betting on an even larger 75 basis-point hike in June.

U.S. Services Growth Eases on Softer Employment, New Orders – Bloomberg, 5/4/2022

  • Growth at U.S. service providers eased in April while cost pressures worsened, highlighting how decades-high inflation and an ongoing struggle to hire and retain workers is weighing on the sector.
  • The Institute for Supply Management’s gauge of services decreased to 57.1 last month from 58.3 in March, according to data out Wednesday.
  • The median estimate in a Bloomberg survey of economists was for a slight improvement to 58.5.
  • An index of prices paid by firms for materials and services jumped to a record 84.6 in April, pointing to persistent upward pressure on U.S. inflation.
  • Amid high prices, ISM’s gauge of new orders growth pulled back to softest pace since February of last year.
  • Business activity rose to a three-month high, and the group’s measure of imports expanded.
  • Meantime, employment activity contracted for the second time in three months. The measure, which fell to 49.5 in April from 54, underscores the ongoing challenge of hiring enough people to meet demand.
  • The report also showed growth in order backlogs decelerated, and inventories improved. The inventory gauge rose to the highest in over a year last month.

U.S. Trade Deficit Widens to Record $109.8 Billion as Imports Surge – Wall Street Journal, 5/4/2022

  • Strong U.S. demand for computers, vehicles and oil helped drive the U.S. trade deficit to a record of $109.8 billion in March.
  • The Commerce Department on Wednesday said the trade deficit widened by 22.3% from the prior month.
  • Imports rose by 10.3% to $351.5 billion as the U.S. took in far more goods than it exported.
  • Exports, however, also rose strongly—increasing 5.6%—but didn’t keep pace with imports amid global uncertainty stemming from the conflict in Ukraine.
  • Economists surveyed by The Wall Street Journal had expected a trade deficit of $106.7 billion for March.

Biden Officials Divided Over Easing China Tariffs to Slow Inflation – Wall Street Journal, 5/4/2022

  • The Biden administration is split on whether to pare back tariffs on imports from China in an effort to cut consumer costs and reduce inflation, as the White House gives renewed consideration to a step that has divided officials.
  • On one side of the debate within the administration are Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo, who favor easing the tariffs on some of the roughly $360 billion annually of Chinese imports put in place under the Trump administration, according to people familiar with the matter.
  • On the other are Trade Representative Katherine Tai and others who are reluctant to relinquish U.S. leverage over China in a continuing effort to reshape Chinese economic behavior, according to the people.
  • One key point of debate is the extent to which lifting the tariffs would ease inflation. Ms. Yellen said in an interview with Bloomberg TV last month that doing so could help reduce prices.
  • Speaking at a Milken Institute Global Conference on Monday, Ms. Tai appeared to disagree. She said that U.S. efforts to reduce inflation in the short term shouldn’t sacrifice longer-term policy goals, such as addressing China’s trade practices and enhancing supply-chain resilience.

Biden Weighs Forgiving Some Student Debt for Those Who Earn Less Than $125,000 a Year – Wall Street Journal, 5/4/2022

  • President Biden is considering limiting student loan forgiveness to borrowers who make less than $125,000 a year, according to the White House, as the Biden administration nears a decision on an issue that could affect millions of Americans and reverberate in the coming midterm elections.
  • “The president talked back on the campaign about…looking at steps to help people making less than $125,000 a year, so that is the frame through which he’s making considerations at this point,” White House press secretary Jen Psaki told reporters on Tuesday.
  • Student loan forgiveness of any kind is likely to anger Republicans and some moderate Democrats. Progressive groups and some liberal Democrats, meanwhile, have urged Mr. Biden to go further, calling for greater debt cancellation for more borrowers.
  • Some of the president’s advisers have privately raised concerns about the legality of taking executive action on the issue and the potential backlash from people who have paid off their loans, never took on debt or don’t believe the government should step in to help current borrowers.
  • Other advisers have stressed to the president that debt forgiveness would provide an economic boost to low-income and minority borrowers, adding that the issue is popular with young voters, who Democrats will need in the coming midterm elections.
  • About 40 million people owe around $1.6 trillion in federal student debt, which makes up around 90% of the student debt that is outstanding.

Trump-Backed J.D. Vance Wins Ohio’s GOP Primary for U.S. Senate – Wall Street Journal, 5/4/2022

  • J.D. Vance, an author and venture capitalist, won Ohio’s Republican primary for U.S. Senate in a victory that demonstrated former President Donald Trump’s influence over GOP voters.
  • Mr. Vance, 37 years old, was declared the winner on Tuesday by the Associated Press in a seven-candidate race that had showcased the combative brand of conservatism Mr. Trump helped usher into the party. He benefited from millions of dollars in advertising funded by billionaire Peter Thiel, a technology entrepreneur.
  • The fight for the Senate nomination in Ohio was the most expensive in the nation so far this year, with more than $66 million spent on advertising by the GOP candidates and their allies through May 1.
  • Nearly complete results from AP showed he earned 32% of the vote in the crowded GOP primary.

EUROPE & WORLD

EU Proposes Ban on Russian Oil Imports, Sending Prices Higher – Wall Street Journal, 5/4/2022

  • The European Union proposed a ban on imports of Russian crude within six months and on refined oil products from the country by year-end, prompting a jump in oil prices, while the bloc is set to impose sanctions on high-ranking Russian military officials involved in alleged war crimes and the siege of Mariupol.
  • European Commission President Ursula von der Leyen outlined the proposal in a speech to the European Parliament, and said the EU’s executive body is also proposing to take Russia’s biggest bank, Sberbank, and two other Russian banks off the Swift financial-messaging system. The commission is also planning to ban three major Russian state-owned broadcasters from the EU.
  • EU member states started discussing the package of sanctions in Brussels on Wednesday. All 27 countries will need to sign off on it. EU officials are pushing for a decision this week, although differences remain among member states about some of the proposals.
  • Ms. von der Leyen said the EU will also need to play its part in paying Ukraine’s wartime costs, which international institutions have said could run at 5 billion euros, equivalent to $5.3 billion, a month to keep paying salaries, pensions and other basic services.

Universal Music first-quarter subscription and streaming revenue up 20% – Reuters, 5/4/2022

  • Universal Music Group reported better than expected first quarter sales on Tuesday, driven by 20% growth in subscription and streaming revenue.
  • First-quarter revenue rose 22% year on year, or 16.5% at constant currencies, to 2.2 billion euros ($2.3 billion), with streaming income up 25% and subscription income up 18.3%, offsetting falls in downloads.
  • Core profit, meanwhile, was in line with expectations, rising to 455 million euros from 396 million euros, as margins dipped slightly.

Equinor posts record profit as gas prices soar in Europe – Reuters, 5/4/2022

  • Equinor reported record earnings on Wednesday, as the war in Ukraine triggered an energy supply crunch that sent gas prices soaring to all-time highs.
  • The state-controlled Norwegian company has emerged as a big winner in Europe’s energy crisis, generating $18 billion in adjusted pretax earnings in the first quarter as it sold gas at prices more than four times as high as a year earlier.
  • The $18 billion result compared with a revised $4.1 billion a year earlier and beat the $17.1 billion predicted in a company-compiled poll of 25 analysts.
  • The company reiterated its plan to withdraw from Russia, booking a $1.1 billion impairment in the January-March quarter and dropping Russian crude supplies, as previously announced.
  • Equinor maintained a quarterly dividend of 40 cents per share, as planned, half of which is an ordinary payout and the other half seen as an extraordinary payment due to high petroleum prices.

Volvo Cars reports 25% sales drop in April as lockdowns, supply woes weigh – Reuters, 5/4/2022

  • Volvo Car Group’s monthly sales fell 24.8% in April from a year ago, the Sweden-based automaker said on Wednesday, as lockdowns in China and global supply chain problems hampered production.
  • Sales in China at the company, which is majority owned by China’s Geely Holding, declined 47.8% in April, while in the United States they fell 9.2% and in Europe 23.2%.
  • “In April, Covid-19 lockdowns in eastern China impacted retail deliveries in China and added more challenges to already weakened global supply chains, resulting in additional loss of production,” Volvo said in a statement.
  • The Gothenburg-based company said however that demand remained strong, while the share of fully electric cars rose to 10% from 9% in March. It aims for 50% of its sales to be pure electric cars by the middle of this decade.

Factmonster – TODAY in HISTORY

  • Public Enemy Number One, Al Capone, was jailed for tax evasion. (1932)
  • The first Grammy Awards were held. (1959)
  • Four Kent State University students were shot down by National Guard members during an anti-Vietnam War demonstration. (1970)
  • The Unabomber, Ted Kaczynski, was sentenced to four life terms plus 30 years for his series of bombings that killed three and injured 23. (1998)

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