Amazon.com, McDonald's, Chevron: Stocks That Defined the Week -- WSJ
By Francesca Fontana
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 1, 2020).
Amazon.com Inc .
Big tech keeps getting bigger despite concerns about their size
and influence. Amazon.com, Facebook Inc. and Apple Inc. delivered
soaring quarterly sales and profit Thursday, highlighting the
resiliency of their operations during the pandemic. The results
came a day after their CEOs faced scrutiny from Congress about
their business practices. Amazon shares gained 3.7% Friday.
Altria Group Inc.
Smoking is making a comeback. Marlboro maker Altria said Tuesday
that Americans are lighting up more during the pandemic, enough to
slow the yearslong decline in U.S. cigarette sales. People are
spending more on cigarettes as they spend less on travel and
entertainment and have more time to smoke at home, Chief Executive
Billy Gifford said. Stimulus checks and increased unemployment
benefits also helped ease the financial hardship for low- and
middle-income cigarette smokers. Adult smokers are making fewer
trips to the store, but they are stocking up on packs when they go.
Altria shares added 0.9% Tuesday.
McDonald's investors aren't "loving it." The fast-food giant
said its profit suffered a deeper-than-expected drop during its
most recent quarter, as the coronavirus shut restaurants around the
world. The company said it spent $200 million to help franchisees
advertise their restaurants and boost sales, while restaurant
margins fell 25% as owners spent on personal-protection equipment
for workers and free meals for first responders. To-go sales have
helped McDonald's U.S. operations, where nearly 95% of locations
have drive-throughs. As coronavirus cases rise, the company will
likely continue to depend on drive-throughs for the near future.
McDonald's shares fell 2.5% Tuesday.
Procter & Gamble Co.
Now more than ever, consumers want to keep their houses clean.
That was evident in numbers released Thursday by the maker of
household staples from Bounty paper towels to Tide laundry
detergent. P&G posted its strongest annual sales gain since
2006 as the pandemic kept the world's consumers at home and
vigilant about cleanliness. Demand in the U.S. surged through the
spring and early summer, while the reopening of China, P&G's
second-biggest market, drove sales there. Chief Financial Officer
Jon Moeller expects consumers' hygiene needs have changed forever,
saying it's "hard to imagine we'll snap back to the old world."
P&G shares rose 2.4% Thursday.
The pandemic hoarding may be over, but consumers still can't get
enough of certain favorites. Cereal and snack maker Kellogg said
its North American cereal sales increased more than 15%, and 26%
for its Eggo frozen breakfast items. Kellogg and fellow food maker
Kraft Heinz Co. said they have increased their production capacity
and continue to sell essentially everything they can make. The two
companies are increasing advertising for the rest of the year in
hopes of keeping their sales momentum going beyond the coronavirus
pandemic. Kellogg shares fell 0.5% Thursday.
United Parcel Service Inc.
The online shopping boom delivered a surprise surge in demand
for UPS. The delivery giant said on Thursday that its average daily
shipping volume rose a record 21% in its June quarter. Shipments to
homes increased 65% as well. Chief Executive Carol Tomé said UPS
was planning for demand to pull back after the early days of the
pandemic. The sudden growth does come at a cost: Carriers incur
greater expenses from more miles driven and fewer packages
delivered per stop as they deliver more to homes instead of
businesses. Ms. Tomé said she sees room to raise rates on large
retailers, who she said can pass them along to consumers by raising
prices. UPS shares surged 14% Thursday.
The tank is emptying at some of the world's oil giants. Chevron
said Friday that it lost $8.3 billion in the second quarter, as the
pandemic continues to sap global demand for fossil fuels. Chief
Executive Mike Wirth said his company faced an uncertain future for
energy demand and couldn't predict commodity prices with confidence
right now. The dismal results from Chevron and its peers are
exacerbating their existing struggles to attract investors, which
many of the companies have sought to retain by paying out hefty
dividends that are proving hard to sustain during the pandemic.
Chevron shares fell 2.7% Friday.
Write to Francesca Fontana at email@example.com
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August 01, 2020 02:47 ET (06:47 GMT)
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