Zoom founder Eric Yuan speaks before the Nasdaq opening bell ceremony in New York on April 18, 2019.
Kena Betancur | Getty Images
Zoom Video Communications shares fell about 5% in extended trading on Monday after the company reported fiscal third-quarter earnings and quarterly guidance that exceeded analysts’ expectations. Investors seemed disappointed that the rate of revenue growth, which has accelerated this year, could moderate.
Here’s how the company did:
- Earnings: 99 cents per share, adjusted, vs. 76 cents per share as expected by analysts, according to Refinitiv.
- Revenue: $777.2 million, vs. $694.0 million as expected by analysts, according to Refinitiv.
With the coronavirus pandemic continuing to drive people to Zoom for work, school and family meetings, Zoom’s revenue grew 367% on an annualized basis in the quarter, which ended Oct. 31, according to a statement. In the previous quarter revenue increased 355%, and in the quarter before that, revenue had risen 169%.
Zoom’s gross margin declined to 66.7% from 67.3% in the previous quarter.
In the quarter Zoom said that its premium Zoom Phone cloud-phone service had expanded to over 40 countries and territories, and that Zoom would come to smart-home devices made by Amazon, Facebook and Google. The company also announced OnZoom, a tool for putting on live virtual events that people can attend by paying fees.
Zoom called for fiscal fourth-quarter adjusted earnings of 77 cents to 79 cents per share on $806 million to $811 million in revenue, implying 329% revenue growth at the middle of the range. Analysts polled by Refinitiv had been expecting 66 cents in adjusted earnings per share and revenue of $730.1 million.
Excluding the after-hours move, Zoom stock has gone up 591% since the start of the year, while the S&P 500 index is up about 12% over the same period.
Executives will discuss the results with analysts during a Zoom webcast starting at 5:30 p.m. Eastern time.
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WATCH: Take some profits in ‘red hot’ tech stocks like Cloudflare and Zoom, says Jim Cramer
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The Department of Labor has been both miscounting the number of people receiving unemployment benefits and underpaying those under a special program instituted to address the coronavirus pandemic, according to a government watchdog report Monday.
Issues dealing with the surge in those filing claims for the new programs aimed at addressing the special circumstances of the pandemic have led to some problems, the Government Accountability Office said. Mistakes have moved in both directions, with recipients sometimes undercounted and at other times overcounted due to multiple individual filings and issues particular to some states including California and Arizona.
At the same time, states also are underpaying those workers displaced because of the business restrictions associated with the pandemic.
Rather than provide compensation based on previous pay, states are paying out just the minimum level required. That has resulted in potential economic hardship as federal programs addressing the situation are about to run out.
Congress has remained in a stalemate over extending benefits to those filing under pandemic-related programs, which will expire at the end of the year. Separate provisions under the Pandemic Unemployment Assistance provision of the CARES Act allowed those not normally eligible for benefits to file, and for those whose benefits have expired to file under the emergency provision of the PUA. Neither has been renewed.
“The expiration of supplemental payments for UI claimants may mean that some households’ income no longer exceeds poverty guidelines,” the report said. “In addition, with the scheduled expiration of certain CARES Act benefits in December 2020, PUA claimants who remain unemployed may face additional hardship.”
The GAO also took issue with the way the Labor Department has been reporting weekly claims, which have run above the pre-pandemic record every week since mid-March.
“Without an accurate accounting of the number of individuals who are relying on these benefits in as close to real time as possible, policymakers may be challenged to respond to the crisis at hand,” the report said.
A primary issue in the weekly reporting has been with case backlogs, resulting in counts that are too low. At the same time, the department is sometimes counting people repeatedly who file multiple claims, resulting in some counts that are too high.
“DOL has continued to collect and report claims data in the ways it has historically, which provides some valuable information about the volume of claims submitted,” the report stated. “However, because of the atypical unemployment environment during the pandemic, the use of these traditional methods has resulted in the inaccurate reporting of information about the number of individuals receiving benefits.”
GAO recommends that the department notes in its weekly release that “in the current unemployment environment, the numbers it reports for weeks of unemployment claimed do not accurately estimate the number of unique individuals claiming benefits.” The DOL agreed with that recommendation.
In addition, the department “partially agreed” to a recommendation to use state-level data to more accurately represent the exact amount of individuals collecting.
Correction: The Government Accountability Office issued its report Monday. An earlier version misstated the agency’s name.
Election workers count ballots at the Maricopa County Tabulation and Election Center (MCTEC), in Phoenix, Arizona, November 6, 2020.
Jim Urquhart | Reuters
Arizona on Monday certified its presidential election results, delivering another win for President-elect Joe Biden in spite of efforts by allies of President Donald Trump to reverse the outcome of the race.
The Grand Canyon State’s certification will hand 11 Electoral College votes to Biden, who is projected to clinch 306 such votes nationwide, compared with 232 for Trump.
Biden is the first Democratic presidential nominee to win Arizona since 1996.
Before signing the canvas documents certifying the election, Arizona’s Secretary of State Katie Hobbs, a Democrat, praised her state for conducting “easily the smoothest” and “most secure election in recent history” even amid the coronavirus pandemic.
“Despite the unprecedented challenges, Arizonans showed up for our democracy,” Hobbs said.
She also took a swipe at the flurry of claims of widespread fraud being spread by Trump and some of his surrogates.
“This election was conducted with transparency, accuracy and fairness in accordance with Arizona’s laws and elections procedures, despite numerous unfounded claims to the contrary,” Hobbs said.
Trump falsely claims that he won the election as he refuses to concede to Biden. The president has lashed out at some officials in his own party, including Georgia Gov. Brian Kemp, who have declined to take steps to block the certification of the elections in their states.
Gov. Doug Ducey, a Republican, lauded his state’s handling of the election, as well.
“The system is strong, that’s why I have bragged on it so much,” Ducey said at the signing event. “This is America, and no voter should be disenfranchised.”
“The votes have been tabulated, all 15 counties have certified their results,” he added.
The certification was conducted at the same time as members of Trump’s legal team, led by former New York Mayor Rudy Giuliani, alleged an array of unproven conspiracies about election fraud at a hearing in Phoenix.
Trump and his legal team for weeks have tried to reverse Biden’s projected win through a series of lawsuits and recount requests in multiple states.
Those efforts have failed across the board, as the Trump campaign either lost or withdrew legal challenges to ballots, or as states that conducted recounts confirmed that Biden had defeated Trump.
On Sunday, Wisconsin said a recount of two counties, which the Trump campaign had requested, verified Biden had won the state’s popular vote. That recount cost the Trump campaign $3 million.
At the hearing, Giuliani urged Republican state legislators at the hearing to defy Biden’s popular vote win and select pro-Trump electors.
“What is the right count, or how can we get as close to the right count as possible? If we can, then have the courage to select that person to get the electors, because that person won the honest vote,” Giuliani said.
“In history, I swear to God, you will be heroes,” Giuliani told the GOP officials at the hearing. “If you can’t make a determination, then don’t certify.”
This is developing news. Please check back for updates.
The U.S. Capitol building in Washington, D.C., Nov. 11, 2020.
Stefani Reynolds | Bloomberg | Getty Images
Congress comes back to Washington this week with two thorny issues to resolve before the end of the year.
Lawmakers need to pass a spending bill by Dec. 11 to prevent a government shutdown. Meanwhile, they will have to decide whether to approve another coronavirus relief bill as rampant infections stress hospitals and trip up the U.S. economic recovery.
The challenges will test a divided Capitol’s capacity to govern after months of gridlock fueled in part by a contentious 2020 election. Congress’ ability to pass legislation this month will shape the federal government and private sector’s power to reduce the damage caused by the pandemic in the coming months.
The GOP-controlled Senate will convene on Monday afternoon following its Thanksgiving break. The Democratic-held House will meet again on Wednesday.
Appropriators have reached agreement on an overall $1.4 trillion price tag for a spending bill, according to NBC News. They still need to decide where all of the money will go.
Both Republican and Democratic leaders want to approve legislation to keep the government running through the end of the fiscal year, Sept. 2021. Failure to reach a deal in time could mean passing a short-term bill with spending set at current levels.
Meanwhile, Congress will have to decide whether and how to address overlapping health and economic crises worsened by a recent wave of Covid-19 infections across the country. Twenty-one states recorded records for coronavirus hospitalizations Sunday, and more state and local officials have tightened restrictions to slow the spread.
An expansion of unemployment benefits, moratorium on federal student loan payments and some protections from eviction will expire at the end of the year. Millions of Americans are already struggling to cover costs.
Republicans and Democrats have disagreed for months on the steps Congress needs to take to address the virus and the economic damage it has caused. Democratic congressional leaders and President-elect Joe Biden have pushed for Congress to approve a bill that costs at least $2.2 trillion this year. Senate Majority Leader Mitch McConnell has said he wants to send more aid in the coming weeks — but aims to include about $500 billion in new spending.
The sides have not held formal talks on a stimulus package since the 2020 election on Nov. 3. Despite a lack of progress, House Speaker Nancy Pelosi has repeatedly said she thinks Congress can craft a relief bill that can pass both chambers.
“I’m optimistic that we will have bipartisanship to put something together to go forward because I do believe that many of our colleagues understand what’s happening in their districts and want to make a difference,” she told reporters on Nov. 20 before the Thanksgiving break.
Also that day, McConnell called for lawmakers to pass “urgent and targeted measures” such as a second round of Paycheck Protection Program loans for small businesses and funding for vaccine distribution.
While some members of McConnell’s caucus have resisted spending any more money on relief efforts, others have pushed for aid during the virus surge. Sen. Chuck Grassley, an Iowa Republican who returned to Washington this week after a positive Covid-19 test and quarantine period, called on his colleagues Monday to “pass long overdue relief legislation.”
House Democrats passed a $2.2 trillion stimulus in October. Among other measures, it would have reinstated the $600 per week federal unemployment insurance that expired earlier this year, sent a second $1,200 direct payment to most Americans, set up a second round of PPP loans and authorized more than $400 billion in state and local government aid.
A $500 billion Senate GOP bill that Democrats blocked in October included a $300 per week enhanced jobless benefit, more PPP funding and liability protections for businesses. It would not have allocated money for stimulus checks or state and municipal aid.
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An interest rate that banks around the world use as a benchmark for short-term borrowing will be phased out and eventually replaced by June 2023, the Federal Reserve announced Monday.
The Fed was joined by regulators in the U.K. in announcing the plans for the London Interbank Offered Rate, commonly referred to as Libor.
According to the announcement, banks should stop writing contracts using LIBOR by the end of 2021, after which the rate no longer will be published.
Contracts using LIBOR should wrap up by June 30, 2023, the directive said.
“Today’s plan ensures that the transition away from LIBOR will be orderly and fair for everyone – market participants, businesses, and consumers,” Fed Governor Randal Quarles, who serves as the central bank’s vice chair for supervision, said in a statement.
Libor is calculated from an average of banks that participate in overnight lending to each other. The rate is critical for short-term funding that financial institutions use for their operations, but has seen controversy over the years, particularly the role it played in the 2008 financial crisis.
In addition to helping escalate the crisis through higher rates that made it harder for firms to survive, Libor was at the middle of another scandal in 2012. Several banks, including some of the largest in the world, were found to have been manipulating Libor rates for profit.
The Fed has been warning banks to start preparing for a transition away from Libor to what is called the Secured Overnight Financing Rate, or SOFR. Instead of relying on bank quotes, SOFR will use rates that investors offer for bank securities such as loans and assets backed by bonds.
“These announcements represent critical steps in the effort to facilitate an orderly winddown of USD LIBOR,” said New York Fed President John Williams, who has been a SOFR advocate and one of the biggest voices in urging banks to prepare for the transition. “They propose a clear picture of the future, to help support transition planning over the next year and beyond.”
SOFR transactions will take place under the New York Fed’s auspices in its bond repurchase market.
President-elect Joe Biden and his transition team announced on Monday several nominees and appointments for the incoming administration’s top economic posts.
The transition team confirmed CNBC’s earlier report that former Federal Reserve Chair Janet Yellen would be Biden’s official nominee for Treasury secretary. If confirmed by the Senate, Yellen would be the first woman to serve in the department’s 231-year history.
As part of the same announcement, Biden nominated Neera Tanden to serve as Director of the Office of Management and Budget. If confirmed, Tanden would be the first woman of color to lead the OMB.
In prepared remarks, Biden said that “As we get to work to control the virus, this is the team that will deliver immediate economic relief for the American people during this economic crisis and help us build our economy back better than ever.”
“This team is comprised of respected and tested groundbreaking public servants who will help the communities hardest hit by COVID-19 and address the structural inequities in our economy,” he added. “They will work tirelessly to ensure every American enjoys a fair return for their work and an equal chance to get ahead, and that our businesses can thrive and outcompete the rest of the world.”
U.S. outgoing Federal Reserve Chair Janet Yellen holds a news conference after a two-day Federal Open Market Committee (FOMC) meeting in Washington, U.S. December 13, 2017.
Jonathan Ernst | Reuters
Macroeconomic and national security advisor Wally Adeyemo was nominated to serve as Deputy Secretary of the Treasury. He previously served as the chief of staff at the Consumer Financial Protection Bureau, the deputy director of the National Economic Council and deputy national security advisor.
If confirmed, Adeyemo would be the first African American Deputy Secretary of the Treasury.
Notably absent from the Biden team’s announcement was clarification on who is to serve as the director of the National Economic Council. The director of the NEC is often considered a sitting president’s top economic advisor.
Multiple outlets have reported that BlackRock executive Brian Deese is the top contender for the role. Larry Kudlow is the current director of President Donald Trump’s NEC.
The Biden team nominated Cecilia Rouse, one of the nation’s top labor economists, to serve as Chair of the Council of Economic Advisers. If confirmed, the Princeton dean will become the first African American and the fourth woman to lead the CEA in its 74 years of its existence.
The Council of Economic Advisers is typically a small team of experts who offer the president advice and possible directions for economic policy in a setting similar to a think tank. Their advice tends to run more academic compared to government-wide initiatives pursued by the NEC.
The transition also tapped Jared Bernstein, who served as Biden’s chief economist during the Obama administration, to serve on the CEA.
As a longtime Biden advisor and labor economist, Bernstein was widely expected to serve on either the CEA or the NEC.
Heather Boushey, an inequality economist and co-founder of the Washington Center for Equitable Growth, was also tapped to serve on the CEA.
“My life’s work has been centered on ensuring our families and work are properly valued within our economy,” Boushey wrote on Twitter after the announcement. “I’m excited to bring that perspective as a CEA member. We have an opportunity to rethink how we invest in people, and we need to seize it as we rebuild our economy.”
Shares of Nikola plunged by more than 20% in premarket trading Monday after General Motors announced that it is giving up an equity stake in the electric truck start-up and the two said they are dropping plans to build the Badger, Nikola’s pickup truck for consumers.
In September, the automakers announced a $2 billion deal that gave GM an 11% stake in Nikola to supply battery and fuel cell technologies as well as produce the Badger pickup.
The deal was initially viewed as a no-lose situation for GM but the talks became convoluted after short-seller Hindenburg Research lobbed fraud allegations against Nikola and its founder, Trevor Milton, who resigned as the company’s executive chairman on Sept. 21.
Shares of Nikola initially rallied on the news before plummeting in pre-market trading. GM stock was down less than 1%.
Wedbush analyst Dan Ives described the new deal as “a good supply partnership” rather than a “game changer deal” for Nikola.
“In a nutshell, the signing of GM as a partner is a positive but ultimately no ownership/equity stake in Nikola and the billions of R&D potentially now off the table is a major negative blow to the Nikola story,” he wrote in an investor note Monday morning.
The companies said they continue to discuss GM potentially supplying Nikola with battery systems for its planned electric semi-trucks.
Nikola said it will refund all previously submitted order deposits for the Badger, which was dependent on an outside partner such as GM building it.
The allegations by the short-seller were published two days after the deal with GM was announced. They have led to inquiries into the company by the Department of Justice and Securities and Exchange Commission. Nikola has said it’s “fully cooperating” with the agencies.
Moderna said Monday it will request emergency clearance from the Food and Drug Administration for its coronavirus vaccine after new data confirms the vaccine is more than 94% effective in preventing Covid-19 and was safe.
Moderna is the second drugmaker to seek emergency use from the FDA after Pfizer, another front-runner in the Covid-19 vaccine race, applied for the same authorization on Nov. 20. The announcement means some Americans could get the first doses of Moderna’s two-dose vaccine within a few weeks.
The new analysis from Moderna evaluated 196 confirmed Covid infections among the late-stage trial’s 30,000 participants. The company said 185 cases of Covid were observed in the placebo group versus 11 cases observed in the group that received its vaccine. That resulted in an estimated vaccine efficacy of 94.1%, the company said.
The company released Nov. 16 an early analysis of its phase three trial based on just 95 Covid-19 cases that showed its vaccine was at least 94% effective. Monday’s data provides a more complete picture of the vaccine’s effectiveness.
It also appears to prevent volunteers from getting severely sick from the virus. Of the 30 severe cases of Covid-19 in the trial, none were in the group that received the vaccine, Moderna said. Additionally, there was one Covid-19 related death in the study that occurred in the placebo group, according to the company.
“This positive primary analysis confirms the ability of our vaccine to prevent COVID-19 disease with 94.1% efficacy and importantly, the ability to prevent severe COVID-19 disease. We believe that our vaccine will provide a new and powerful tool that may change the course of this pandemic and help prevent severe disease, hospitalizations and death,” Moderna CEO Stephane Bancel said in a statement.
Moderna said the vaccine’s effectiveness was consistent across age, race and gender. The 196 confirmed cases included 33 adults over the age of 65 and 42 people from Black, Latino and other “diverse” communities. The vaccine was also well tolerated with the most common side effects being fatigue, muscle pain, headache and pain at the injection site, the company said.
Moderna’s results come as drugmakers and public health officials race to deliver a safe and effective vaccine to help bring an end to the pandemic, which has killed at least 1.45 million people worldwide as of Sunday evening, according to data compiled by Johns Hopkins University. A vaccine is also seen by investors as a way to get the global economy back on track after the virus wreaked havoc on nearly every country.
The FDA’s review of Moderna’s vaccine is expected to take a few weeks. The agency will likely schedule an advisory committee meeting to review the vaccine on Dec. 17, Moderna said. It has already initiated rolling submissions with several regulatory agencies around the world, including the European Medicines Agency.
Federal agencies are already sending vaccination plans around to staff. Five agencies have started telling employees they could receive Pfizer’s or Moderna’s Covid-19 vaccine in as little as eight weeks, a person with firsthand knowledge of those plans told CNBC on Nov. 20.
Health and Human Services Secretary Alex Azar told CNBC on Nov. 16 that the FDA would move “as quickly as possible” to clear Pfizer’s and Moderna’s vaccines for emergency use. Between Moderna and Pfizer, Azar told CNBC there will be roughly 40 million doses of vaccine available by the end of this year, enough to inoculate about 20 million people since both vaccines require two shots, he said at the time.
Moderna’s initial results released earlier this month were based on the first interim efficacy analysis conducted by an external and independent data monitoring committee from the phase three clinical trial. The independent group of experts oversees U.S. clinical trials to ensure the safety of participants.
Public health officials and medical experts note it remains unclear how long the vaccines will provide immunity and whether or how often people may need periodic booster shots. Moderna’s vaccine, like Pfizer’s, uses messenger RNA, or mRNA, technology. It’s a new approach to vaccines that uses genetic material to provoke an immune response.
Cambridge, Massachusetts-based Moderna has said its vaccine remains stable at 36 to 46 degrees Fahrenheit, the temperature of a standard home or medical refrigerator, for up to 30 days. It can be stored for up to six months at negative 4 degrees Fahrenheit. By comparison, Pfizer’s vaccine requires a storage temperature of minus 94 degrees Fahrenheit.
Moderna told investors on Oct. 29 that it was “actively preparing” for the global launch of its potential vaccine after completing enrollment in its late-stage trial a week earlier. In August, Moderna said it was charging between $32 and $37 per dose for its vaccine for some customers, under cheaper “pandemic pricing.” The company said it was in discussion for larger volume agreements that will have a lower price.
This is a developing story. Please check back for updates.