The outbreak of the coronavirus has dealt a shock to the global economy with unprecedented speed. Following are developments Thursday related to the global economy, the work place and the spread of the virus.
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EARNINGS RESULTS: The busiest week of the earnings season continues, with companies making gains in some areas of their business but struggling in others.
— American Airlines reported a staggering loss of $2.24 billion for the first quarter, when the coronavirus pandemic triggered a sharp drop in air travel.
— Most McDonald’s restaurants in the U.S. and China are now open for drive-thru and delivery, but global lockdown orders still took a bite out of the company’s first-quarter sales. The chain’s sales fell 6% to $4.71 billion in the January-March period. Declines have persisted in April.
— Comcast’s net income slid in the first three months of the year as the pandemic forced it to shut down theme parks and its movies were kept out of closed theaters. Comcast lost 409,000 cable TV customers, the biggest source of the company’s profits, but added 477,000 internet customers, which it said was its best quarterly number in more than a decade.
— Twitter reported Thursday that average daily users grew 24% year over year, the highest ever growth rate in the company’s history. The company said growth was driven by seasonal strength, product improvements and interest in coronavirus.
— Facebook reported its slowest quarterly growth as a public company, pressured by the coronavirus pandemic and a resulting global slowdown in digital advertising.
— Tesla eked out a first-quarter net profit and suspended its near-term profit outlook.
— Ongoing demand for Microsoft’ s cloud computing services helped soften the blow of the pandemic on the software giant’s other products during the first three months of the year.
WHEN TO REOPEN: U.S. automakers have been trying to figure out a way to gradually reopen their manufacturing plants.
Ford says it’s confident it can reopen factories and keep workers safe even though it won’t have enough reliable and fast coronavirus tests available for weeks or months. But United Auto Workers President Rory Gamble has said testing is needed before Detroit’s three automakers reopen plants that have been closed for five weeks.
Ford executives said Thursday that employees with symptoms will be tested, and safety procedures have stopped infections at its reopened factories in China and U.S. facilities that make protective gear.
Ford and other automakers say they’ll take worker temperatures and require them to certify that they don’t have symptoms. The companies also will provide masks, goggles and face shields, and keep workers as far apart as possible. The UAW says it wants as much testing as possible and a commitment to full testing as soon as it’s available.
Ford, General Motors and Fiat Chrysler haven’t given restart dates, but they don’t want to be far behind Toyota on May 11.
YOU SAY TOMATO: Two of corporate America’s most well-known CEOs expressed vastly different opinions about the lockdowns that have people hunkered down at home and forced the closure of businesses and factories.
Tesla CEO Elon Musk railed against the stay-at-home orders on his company’s earnings call Wednesday, saying the orders are “forcibly imprisoning people in their homes against all their constitutional rights.” Tesla’s auto plant in Fremont, California, has been closed since March 23 by the state’s action to combat the coronavirus.
On Facebook’s earnings call, CEO Mark Zuckerberg warned against reopening parts of the American economy too quickly. Doing so could “guarantee future outbreaks and worse longer-term health and economic outcomes,” he said. Facebook said it’s been pressured by the pandemic and a resulting global slowdown in digital advertising, but expects to get by with modest long-term effects.
ENERGY: Countries are currently grappling with an overabundance of oil supply. Some oil contract holders were forced to pay people to take crude off their hands last week. The price of U.S. crude has plunged 80% this year.
— President Donald Trump expects to announce a plan soon to aid the U.S. oil industry.
Treasury Secretary Steven Mnuchin says that administration officials are studying multiple options to assist the sector, including potentially stockpiling another several hundred millions of barrels of oil in the strategic reserves.
— Norway will reduce its off-shore oil production. Energy minister Tina Bru said Thursday that Norwegian production will be cut by 250,000 barrels per day in June and by 134,000 barrels per day in the second half of 2020.
MARKETS: Stocks turned lower on Wall Street as more grim news piles up about the damage that lockdowns related to the coronavirus are causing the global economy.
CONSUMER: People are stocking up on essential supplies, and major brick and mortar retailers start setting plans to reopen.
— Monthly U.S. production of tissue paper — used for toilet paper and paper towels — reached a 13-year high in March. The American Forest and Paper Association said U.S. paper mills produced 700,000 tons of tissue, or more than 4 pounds for each U.S. resident, during the month.
— Macy’s plans to reopen 68 department stores Monday, in states including South Carolina and Georgia. It expects to have all of its nearly 800 stores reopened in six weeks. That follows Best Buy, the nation’s largest consumer electronics chain, which said earlier this week it’s reopening 200 of its stores nationwide in early May for customers making appointments. In mid-March, Best Buy pivoted to curbside pickup.