Chevron, General Motors, Zoom, AT&T: Stocks That Defined the Week
By Dan Fitzpatrick and Erik Holm
Spending projections are sliding at two of the world's energy
giants. Chevron Corp. on Thursday said it will cut its annual
capital spending budget by 26% next year and sharply through the
middle of next decade, as the coronavirus pandemic forces an
industry-wide reappraisal of fossil fuel investment. That followed
Exxon Mobil Corp.'s retreat from a plan to increase spending to
boost its oil-and-gas production as the struggling company
reassesses its next decade. Chevron shares fell 0.1 % Thursday.
General Motors Co.
General Motors Co. is tapping the brakes on its relationship
with electric-truck startup Nikola Corp. The Detroit auto giant
revealed Monday it is scaling back a pact that had fueled investor
enthusiasm for both companies. Under the revised deal, GM still
intends to provide Nikola with fuel-cell technology but is
scrapping plans to build an electric pickup truck called the Badger
for Nikola and will no longer take a stake in the company. The move
comes after a short seller's report raised questions about the
readiness of some aspects of Nikola's business, allegations the
company said were false and misleading. GM shares fell 2.7%
A new face-off is unfolding in the world of beauty. Sephora
plans to install 850 shops inside Kohl's Corp. stores by 2023,
upending the beauty retailer's longstanding partnership with J.C.
Penney Co. That follows Ulta Beauty Inc.'s deal announced in
November to open more than 100 shops inside Target Corp. stores by
next year. Beauty has been one of retail's brighter spots during
the pandemic. Department stores are struggling to find new revenue
sources as shoppers turn to fast-fashion chains, discount retailers
and e-commerce players. Shares of Kohl's rose 13% Tuesday.
Zoom Video Communications Inc.
Investors may have Zoom fatigue. Despite posting another quarter
of record sales and lifting its outlook due to the proliferation of
remote working and distance schooling, Zoom Video Communications
Inc. reported higher costs that disappointed holders of the
company's stock. Zoom has been providing some of its services free
to users, and that is weighing on its profitability, Zoom said
Monday. Gross margin for the quarter fell to 67%, down from 71% in
the prior three-month period, as the company spent heavily on its
cloud-computing needs. Shares dropped 15% on Tuesday.
Hewlett Packard Enterprise Co.
So long, Silicon Valley. Hewlett Packard Enterprise Co. -- a
descendant of the firm that Bill Hewlett and Dave Packard famously
started in their Palo Alto, Calif., garage -- is moving its
headquarters to the Houston area, the latest sign that Silicon
Valley is losing some of its gravitational pull. HPE said the
cheaper real estate in Texas would help it save money, and hiring
is also generally cheaper and less competitive in that state than
in California. The company is currently based in San Jose. That
city's mayor, Democrat Sam Liccardo, said HPE's decision was "a
wake-up call." HPE shares rose 2.9% Wednesday.
Masks are not offering enough protection to 3M Co. The
industrial conglomerate said Thursday it plans to cut 2,900 jobs to
account for slumping demand for some products during the pandemic.
The St. Paul, Minn.-based company produces N95 face masks that
protect medical workers and others from the virus. But sales of
3M's office supplies, industrial products and other goods have
slumped as people stayed home from work and postponed dental
appointments and medical procedures. 3M has said nonemergency
medical procedures are unlikely to recover through next year as
people stay away from facilities where patients are being treated
for coronavirus. Shares of 3M fell less than 0.1% Thursday.
A Hollywood giant is blurring the traditional boundaries between
your TV screen and the neighborhood movie theater. AT&T Inc.'s
Warner Bros. said it will release its entire 2021 slate of
theatrical films simultaneously in theaters and on its HBO Max
streaming service, taking the most drastic step yet in eliminating
the exclusivity theater chains have enjoyed for decades. Warner
Bros. movies will play on HBO Max during their first month of
theatrical release before leaving the service while staying in
theaters. The hybrid model will apply to all of Warner Bros. films
next year, from smaller-scale releases to big-budget movies that
traditionally require gargantuan box-office sales to turn a profit.
The head of AMC Entertainment Holdings Inc., the world's largest
movie theater chain, said WarnerMedia must be willing to give up "a
considerable portion of the profitability" of its studio division
to "subsidize" HBO Max, adding "we will do all in our power to
ensure that Warner does not do so at our expense." AT&T shares
rose 0.5% Thursday.
(END) Dow Jones Newswires
December 04, 2020 17:08 ET (22:08 GMT)
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