Exxon Mobil and Chevron, the country’s two energy giants, on Friday reported quarterly losses as the oil and gas industry continued to reel from the pandemic.
Demand for oil and gas tumbled this spring as governments and businesses shut down the economy and told millions of people to stay home, sending prices sharply lower. Although it has recovered a bit since then, demand remains lower than it was before the pandemic, and a recent rise in cases in Europe and the United States could send it even lower.
Exxon Mobil said that it lost $680 million in the third quarter, its third consecutive quarterly loss. Chevron reported a loss of $207 million for the quarter, compared with a gain of $2.6 billion for the same quarter in 2019.
Exxon’s results were better than analysts had expected. The company’s loss for the three months that ended in September was about $400 million smaller than its loss in the second quarter as oil and natural gas prices recovered somewhat from a deep slump in the spring.
Exxon reported that its production of oil and gas were up 1 percent from the second quarter. But revenue fell 29 percent, to $46.2 billion from same period in 2019 because demand for oil and gas continued to be weak.
“We remain confident in our long-term strategy and the fundamentals of our business, and are taking necessary actions to preserve value while protecting the balance sheet and dividend,” Darren W. Woods, Exxon’s chairman and chief executive, said in a statement.
Chevron had quarterly revenue of $24 billion, down from $35 billion in the same period a year earlier. Oil and gas production was down 7 percent from a year ago, while refining and other downstream earnings plummeted to $141 million in the quarter from $389 million a year earlier.
“The world’s economy continues to operate below prepandemic levels, impacting demand for our products which are closely linked to economic activity,” Michael K. Wirth, Chevron’s chairman and chief executive, said in a statement.
Growth in Europe rebounded sharply in the third quarter of the year, according to data published Friday, but hardly anyone was celebrating. Economic activity remains well below what it was a year ago as a surge in coronavirus cases and new lockdowns have raised the risk of another slowdown.
Gross domestic product in the 19 countries that use the euro rose 12.7 percent from July through September compared with the previous quarter, the European Union statistics office said. But economic output was 4.3 percent lower than the same time last year — a severe recession by any standard — and could sink further as Germany, France and other countries order restaurants and theaters to close and restrict travel.
European countries are increasingly desperate to contain the virus before it overwhelms hospitals. But the economic cost will be high, particularly in industries that depend on person-to-person contact. The longer the pandemic lasts, the greater the risk of mass bankruptcies among businesses like hotels, fitness studios and nail salons, leaving lasting scars on the economy.
“There is unfortunately still no evidence that you can simply turn on and off an economy like a light switch without causing more structural damage, maybe even a short circuit,” Carsten Brzeski, global head of macroeconomics at ING Bank, said in a note to clients.
Stocks fell again on Friday, with Wall Street on track for its biggest weekly decline in months.
The S&P 500 fell slightly in early trading, after having already dropped about 4.5 percent for the week. A decline of more than 4.8 percent for the week would be its worst showing since March, when financial markets were gripped by a wave of panic over the pandemic.
The latest retreat has come as a second wave of cases has forced more lockdowns in Europe, threatening the economic recovery and spooking investors around the world. In the United States, a record number of cases is prompting local governments to start imposing some limits on gatherings.
Big technology stocks, which play an outsize role on Wall Street because of their large size, were mostly lower even after many reported a surge in profits. Apple fell about 3 percent in early trading, after the company on Thursday reported a 20 percent drop in iPhone sales in the last quarter, caused by a delay in the release of the iPhone 12.
Twitter dropped more than 15 percent, putting it among the worst performing stocks in the S&P 500, after its user growth disappointed investors. Amazon and Facebook were also lower. Alphabet was the only one of the four tech giants that reported results on Thursday to gain, climbing about 6 percent after reporting a rise in advertising on Google and YouTube.
Shares in Europe were also slightly lower on Friday. In Germany, the DAX index fell 0.5 percent, and the CAC index in France rose 0.1 percent. In Britain, the FTSE 100 index fell 0.1 percent as the government resisted pressure to impose a second national lockdown, instead putting towns and cities under tighter restrictions.
Data published Friday showed Europe’s economy recorded its strongest rebound on record in the third quarter, jumping 12.7 percent from the previous quarter in countries that share the euro. But the latest lockdowns mean economists are now worried about a double-dip recession, if economic growth is wiped out by weeks of orders to stay at home and the closure of bars, restaurants and nonessential shops.
IAG, the parent company of British Airways and Iberia, reported an operating loss of nearly 2 billion euros in the third quarter. Luis Gallego, the airline group’s new chief executive, said he did not expect passenger demand to return to pre-pandemic levels until at least 2023 and called on governments to allow for more preflight coronavirus testing to ease travel restrictions. Still, IAG’s shares rose 2.5 percent on Friday, as traders bought the stock that has been trading at multiyear lows.
Citing civil unrest in Philadelphia, Walmart has moved all of its guns and ammunition off the sales floors in its stores as a “precaution for the safety of our associates and customers.”
Walmart, which is the nation’s biggest retailer and sells firearms and guns in about half of its roughly 4,000 stores in the United States, said in a statement on Thursday that the move was motivated by “some isolated civil unrest.”
In an email, a company spokesman said the move was prompted by the protests and looting that have roiled Philadelphia this week after police killed Walter Wallace Jr., a Black man with mental health issues who approached them while carrying a knife.
In June, Walmart made a similar decision to remove firearms from its sales floor during the widespread protests over the killing of George Floyd by a Minnesota police officer. The decision on Thursday was earlier reported by The Wall Street Journal.
“It’s important to note that we only sell firearms in approximately half of our stores, primarily where there are large concentrations of hunters, sportsmen and sportswomen,” Walmart said in a statement. “These items do remain available for purchase by customers.”
Armed with cash, and offering services and products that stuck-at-home Americans needed, the biggest technology companies — Amazon, Apple, Alphabet, Microsoft and Facebook — weathered the early days of the pandemic better than most businesses.
The recovery may provide another catalyst to help them generate a level of wealth that hasn’t been seen in a single industry in generations.
With an entrenched audience of users and the financial resources to press their leads in areas like cloud computing, e-commerce and digital advertising, the companies demonstrated again that economic malaise, upstart competitors and feisty antitrust regulators have had little impact on their bottom line, The New York Times’s technology reporters, Daisuke Wakabayashi, Karen Weise, Jack Nicas and Mike Isaac, write.
Combined, the five companies reported a quarterly net profit of nearly $52 billion this week.
Four tech companies with a combined market value of $5 trillion — Alphabet, Amazon, Apple and Facebook — reported their latest earnings after the market closed on Thursday. The DealBook newsletter compiled some of the big numbers in the filings:
$64.7 billion: Apple’s revenue rose just 1 percent, but that beat expectations as analysts were expecting a decline because of the delayed release of the new iPhone. Sales of services helped cover the shortfall.
197 percent: Amazon’s quarterly profit nearly tripled, to $6.3 billion. Bonus stat: The company also added almost 250,000 employees in the period, surpassing more than a million workers for the first time.
2.54 billion: The number of people using one or more apps in Facebook’s family — Instagram, WhatsApp, Messenger and its core app — rose 15 percent.
$5 billion: Advertising revenue at Google’s YouTube unit set a record, rising 30 percent, bolstered by stay-at-home viewing.
As concerns about another wave of coronavirus inflections swept the globe in recent months, shoppers again hit grocery stores and loaded up on pantry items, sending sales of Kraft Heinz’s food products soaring in the third quarter.
The maker of Heinz ketchup, Kraft macaroni & cheese and Oscar Mayer cold cuts said on Thursday that organic sales, which strip out currency movements, acquisitions and divestitures, rose 6.3 percent to $6.4 billion in the third quarter from a year ago. On a call with Wall Street analysts, the company’s chief executive, Miguel Patricio, said Kraft Heinz saw retail demand for its products accelerate again in the second half of September.
Kraft Heinz, which was struggling with its product mix and company structure before the pandemic, said net income fell 33.7 percent in the quarter to $597 million because of charges stemming from its September announcement to sell part of its cheese business, including Cracker Barrel and Polly-O to the French company Lactalis.
But like other large food manufacturers, Kraft Heinz has benefited from the broad shift by consumers to eating more meals at home during the pandemic. Expecting that trend to continue through the end of the year, Kraft Heinz boosted its outlook for all of 2020. Ahead of the close of the stock market, Kraft Heinz shares were up 3.8 percent to $30.34
The cereal giant Kellogg said sales of its cereals and snacks gained in the third quarter, but at a slower rate than the previous period. After soaring 9.2 percent in the second quarter, organic sales at Kellogg grew 4.5 percent in the third quarter to about $3.6 billion. Net income climbed to $348 million, up from $247 million a year ago.
Executives said consumers in the quarter snacked on Pringles chips, and loaded up shopping carts with Eggo waffles and Morningstar Farms meat-alternative foods, including a new line of plant-based burgers and chicken nuggets called “Incogmeato.”
In late-afternoon trading, shares of Kellogg were flat at $63.51.
Meanwhile, consumers’ love of tacos and burritos pushed Yum Brands revenues up 8 percent to $1.45 billion in the third quarter. Net income rose 11 percent to $283 million from a year earlier.
Taco Bell was the big winner for the company, with people buying larger meal packs for families and embracing a new product, the grilled cheese burrito.
Taco Bell, whose sales were hit by a reduction in breakfast and late-night meals since the pandemic started, reported same-store sales gains of 3 percent in the third quarter. Those gains offset losses at Yum Brands’ two other large chains, KFC and Pizza Hut. While both chains grew same-store sales in the United States, they reported declines in global sales as demand lagged.
Softness in international markets could continue to affect Yum Brands in the fourth quarter. While Europe makes up less than 10 percent of Pizza Hut’s sales and 5 percent of KFC’s, executives said they were keeping a close eye on the area as France moved to another national lockdown and Germany inched closer to one in response to rising coronavirus cases.
The U.S. and China markets rebounded faster than expected for the coffee chain Starbucks, resulting in just a in global same-store sales in the quarter as compared with the same period last year.
As more Starbucks opened to limited in-store dining in the United States and China, which make up 61 percent of the company’s total global stores, same-store sales improved significantly from the 40 percent drop in the prior quarter.
In this past quarter, revenues declined 8 percent to $6.2 billion while net earnings were slashed in half to $392 million.
On a call with analysts, the chief executive, Kevin Johnson, said the company was adjusting to changing consumer patterns. Traffic has moved from dense metro areas to the suburbs, and early-morning coffee runs have shifted to midmorning business, Mr. Johnson said.
Starbucks’ fall seasonal menu, specifically its “pumpkin platform,” was also a boon as Pumpkin Cream Cold Brew coffee outsold a longtime fan favorite, the Pumpkin Spice Latte.
Personal income rebounded in September to post a gain of 0.9 percent after a revised decline of 2.5 percent in August, the Commerce Department reported Friday. Consumer spending was up 1.4 percent, the fifth straight monthly increase.