Amazon has run its warehouses closer to full capacity, and delivery drivers have made more stops on their routes, during the pandemic.
Credit…Brendan Mcdermid/Reuters

With the pandemic shifting sales online and consumers flush with stimulus checks, Amazon on Thursday reported $108.5 billion in sales in the first three months of the year, up 44 percent from a year earlier. It also posted $8.1 billion in profit, an increase of 220 percent from the same period last year.

The first-quarter results surpassed Wall Street’s expectations. Shares were up as much as 5 percent in aftermarket trading.

The most profitable parts of Amazon’s retail business boomed. Revenue from merchants listing items on its website and using its warehouses was up 64 percent, to $23.7 billion. Its “other” business segment, which is largely its lucrative advertising business, increased 77 percent, to almost $7 billion.

Amazon previously disclosed that 200 million people pay for Prime memberships, and subscription revenue for that service and others reached almost $7.6 billion in the quarter. In addition to paying Amazon $119 a year or $12.99 a month for free shipping and other perks, households with Prime memberships typically spend $3,000 a year on Amazon, more than twice what households without the membership spend, according to Morgan Stanley.

The high volume of orders during the pandemic has let Amazon operate more efficiently. It has run its warehouses closer to full capacity, and delivery drivers have made more stops on their routes, with less time driving between customers. The number of items Amazon sold grew 44 percent, but the cost to fulfill those orders was up only 31 percent.

The pandemic’s shift to remote computing was also a boon to Amazon’s profitable cloud computing business, Amazon Web Services, which had $13.5 billion in sales.

“We certainly had strong volumes really across all of our businesses,” Amazon’s finance chief, Brian Olsavsky, said on a call with reporters. He said the company is investing heavily in future growth. It spent almost $50 billion in capital expenditures in the last 12 months, largely on building out its logistics operations and data centers, up 80 percent over a year earlier. Mr. Olsavsky said he expected “another strong year” for capital spending.

“In just 15 years, AWS has become a $54 billion annual sales run rate business competing against the world’s largest technology companies, and its growth is accelerating,” Jeff Bezos, Amazon’s founder and chief executive, said in a statement. Mr. Bezos plans to step down as chief executive later this year and transition into the role of executive chairman.

Amazon’s total work force dipped slightly between December and the end of March, falling by 27,000 to 1,271,000 employees globally. That was still 51 percent more workers than the same period last year. On Wednesday, Amazon announced it would increase pay for half a million workers and was hiring “tens of thousands” more.

Jack Dorsey, the chief executive of Twitter, said the company’s ability to continue attracting new users a year later was a sign of product improvements.
Credit…Anushree Fadnavis/Reuters

Twitter said on Thursday that its revenue in the first quarter of the year was $1.04 billion, a 28 percent increase from the same quarter the previous year that modestly exceeded analyst expectations. Net income for the quarter was $68 million, a turnaround from an $8.4 million loss in the same quarter a year ago.

Twitter’s share price dipped about 11 percent in after-hours trading on Thursday, mostly because of the company’s note of caution. Twitter projected revenues for the second quarter between $980 million and $1.08 billion and said it was hiring employees more quickly than it had planned for the year, adding some expenses.

Twitter’s first quarter was remarkably tumultuous, even by the company’s often rollicking standards. It permanently banned its most famous user, former President Donald J. Trump, after the Jan. 6 riot on Capitol Hill, and cracked down on the postings of a number of right-wing figures.

But the controversy did not appear to have hurt Twitter’s financial performance in the quarter. The company saw a 20 percent jump in daily active users who see ads, to 199 million. It also added new advertising formats, leading to a 32 percent increase in ad revenue in the quarter.

Among the new ad formats is a feature that allows app developers to prompt Twitter users to download their apps. During the recent investment craze focused on cryptocurrency and meme stocks, advertisers increased their spending tenfold on the promotion of investment and cryptocurrency apps, the company said.

A year ago, Twitter experienced an influx of new users as the pandemic set in and lockdowns were introduced. Its ability to continue attracting new users a year later was a sign of product improvements, like the recent product developments like audio chat and the new ability follow topics rather than people, Jack Dorsey, Twitter’s chief executive, said in a statement.

Still, Twitter cautioned investors that its daily active user numbers were unlikely to increase substantially this year when compared with the spike caused by the pandemic, and growth could be at its most sluggish in the current quarter.

Twitter’s share price dipped more than 8 percent in after-hours trading on Thursday, mostly because of the company’s note of caution.

In February, Mr. Dorsey announced ambitious plans to increase the number of Twitter’s regular users to 315 million and double its annual revenue to $7.5 billion by the end of 2023.

The average selling price of Ford models rose 8 percent in the first three months of 2021 compared with a year ago, to $47,858, according to the auto-sales data provider Edmunds.com.
Credit…Mohamed Sadek for The New York Times

In the first months of 2021, what was good for the auto industry was decidedly good for the American economy.

Spending on motor vehicles and parts rose almost 13 percent in the first quarter, making a big contribution to the increase in gross domestic product, the Commerce Department reported Thursday. Strong sales of new and used vehicles were propelled by consumers who had delayed purchases earlier in the pandemic and by others who — because of the virus — wanted to rely less on public transit or shared transportation services like Uber.

Two rounds of stimulus payments since late December were a big factor. Low interest rates, readily available credit, rising home values and stock prices, and strong trade-in values for used models also eased the path for consumers.

In fact, demand in the first quarter was robust enough that the auto industry was able to post healthy results despite a shortage of computer chips that forced temporary shutdowns of many auto plants.

The number of new cars and light trucks sold increased 11 percent from the comparable period a year earlier, to 3.9 million, according to the auto-sales data provider Edmunds.com.

On Wednesday, Ford Motor reported it made a $3.3 billion profit in the quarter, its highest total since 2011. While it produced 200,000 fewer vehicles in the quarter than it had planned, the average selling price of Ford models rose to $47,858, 8 percent higher than in the first quarter a year ago, Edmunds reported.

The combination of strong consumer demand and tight inventories — partly a result of the chip shortage — has produced something of a dream scenario for auto retailers. At AutoNation, the country’s largest chain of dealerships, many vehicles are being sold near or at sticker price even before they arrive from the factory.

“I’ve never seen so much preselling of shipments,” said Mike Jackson, the chief executive. “These vehicles are coming in and going right out.”

In the first quarter, AutoNation’s revenue jumped 27 percent, to $5.9 billion, and the company reported $239 million in profit. That was a turnaround from a loss a year ago, when the pandemic crimped sales and forced AutoNation to close stores.

President Biden’s address to a joint session of Congress was on the screens at The Brig, a beer garden in in Washington, on Wednesday night.
Credit…Alyssa Schukar for The New York Times

Nearly 27 million people watched President Biden’s first formal address to a joint session of Congress on Wednesday night, a large audience for television these days but a much smaller audience than similar speeches by other presidents, according to data from Nielsen.

Shown on all major networks and cable news channels starting at 9 p.m. Eastern time, the speech attracted a much larger television audience than Sunday’s Oscars telecast on ABC, which was watched by about 10 million people. But the audience was significantly smaller than the one for President Donald J. Trump’s first formal address to Congress in 2017, which drew 48 million viewers.

The television audience for Mr. Biden’s address also fell shy of those for equivalent speeches by other recent presidents. Barack Obama had an audience of 52 million in 2009; George W. Bush drew 40 million in 2001; and Bill Clinton’s first address was watched by 67 million in 1993.

Several factors contributed to the smaller ratings. Because of public health and security concerns at the Capitol, Mr. Biden’s speech came later in his presidency than those delivered by his recent predecessors, which all took place in February. There was also less pomp on Wednesday. Instead of an in-person audience of 1,600 senators, Supreme Court justices and other dignitaries seated cheek by jowl with House members, only 200 people were present because of social-distancing restrictions.

TV ratings, in general, have sunk in recent years, as more people have dropped cable subscriptions in favor of streaming, a shift that was accelerated by pandemic viewing habits. And the number of people watching television in the spring, compared with the winter, tends to be smaller.

ABC had the biggest audience for the address, with roughly 4 million viewers, according to the Nielsen, and MSNBC was right behind, with 3.9 million. Fox News and the Fox broadcast networks had the smallest audiences, with 2.9 million viewers (Fox News) and 1.6 million (Fox broadcast).

The Fox audience came out in force for the post-speech analysis by anchors and commentators and the Republican rebuttal from Senator Tim Scott of South Carolina. In the 30 minutes after the address, Fox News was the only network to have a surge in viewers, with an average of 3.2 million people tuning in.

The analysis of the speech varied depending on the network. The Fox News contributor Ben Domenech said Mr. Biden’s speech was a “political blip” that would be “immediately forgotten.” (An earlier version of this item incorrectly stated that Mr. Domenech had called the speech a “tissue of lies.” That comment referred to Mr. Biden’s Inaugural Address.) On MSNBC, the anchor Brian Williams hailed the speech as “Rooseveltian in size and scope.”

People pose for photos near the cruise docks in San Juan, P.R., last week.
Credit…Erika P. Rodriguez for The New York Times

Cruise ships that have been docked for more than a year could restart sailing in United States waters by mid-July, the Centers for Disease Control and Prevention said in a letter sent to the cruise industry late on Wednesday.

After several meetings with cruise lines, the C.D.C. clarified several requirements in its Framework for Conditional Sailing Order, which outlined the steps that cruise companies had to follow to resume operations in U.S. waters. The agency said it will let the companies skip test voyages if they attest that 98 percent of the crew and 95 percent of passengers are fully vaccinated.

Previously, the agency required cruise lines to give 30 days notice before starting a test cruise and to apply for a conditional sailing certificate 60 days before a planned regular voyage. The Cruise Lines International Association, the industry’s trade group, called the guidelines “burdensome” and “ambiguous” and asked the C.D.C. to factor in how quickly Americans are being vaccinated.

The C.D.C. said on Wednesday that it would review and respond to applications for simulated voyages within five days, “putting cruise ships closer to open water sailing sooner.”

The agency also eased its pre-sailing testing requirements for fully vaccinated passengers and crew, allowing them to take a simple viral test instead of a PCR test, which takes longer to yield results.

“We acknowledge that cruising will never be a zero-risk activity and that the goal of the Conditional Sailing Order’s phased approach is to resume passenger operations in a way that mitigates the risk of Covid-19 transmission onboard cruise ships and across port communities,” the C.D.C. said in a statement on Thursday.

“We remain committed to the resumption of passenger operations in the United States following the requirements in the CSO by midsummer, which aligns with the goals announced by many major cruise lines,” it went on.

Cruise companies did not immediately comment on the C.D.C.’s updated guidelines as many were still reviewing the letter.

Florida is the biggest state for cruise operations and it had sued the C.D.C. to force it to restart sailings. But the state has passed legislation mandating that companies that do business with the state or get state subsidies cannot require people to be vaccinated for admission or service. That could make it difficult for cruise lines to guarantee that they have met the vaccination rates set in the C.D.C.’s new letter.

The cruise news site Cruise Critic asked its readers last week whether they would book a cruise if the C.D.C. allowed U.S. sailings to start this summer. Out of more than 600 respondents, 64 percent said they would book a cruise in 2021, while 27 percent said they would wait until 2022.

The acceleration of the vaccine rollout will allow more Americans to return to restaurants.
Credit…Ariana Drehsler for The New York Times

The first-quarter economic recovery, when the economy expanded 1.6 percent, was powered by spending. Specifically, by spending on stuff.

Consumer spending rose 2.6 percent in the first three months of the year, with a 5.4 percent increase in spending on goods accounting for most of the growth. Americans ramped up spending on cars, furniture, recreational vehicles and other long-lasting items, as well as on clothes and food. Spending on services, which has slumped throughout the pandemic, rose by a more modest 1.1 percent.




Percent change in

G.D.P. from the last

quarter of 2019,

by sector

Percent change in G.D.P. from

the last quarter of 2019, by sector


Services spending is likely to pick up in the second quarter, as the acceleration of the vaccine rollout allows more Americans to return to restaurants, airplanes and other activities that they avoided during the pandemic. The data released Thursday by the Commerce Department largely predates that surge.

What the first-quarter data does capture is the impact of two rounds of relief checks from the federal government. After-tax personal income, adjusted for inflation, jumped 12.7 percent in the first quarter, with the government payments accounting for most of the increase. There was a similar jump in income when the first round of relief checks hit last year, which was followed by a similar surge in spending on goods.

“To some extent, when people have money, they’re going to spend it,” said Ben Herzon, executive director of IHS Markit, a forecasting firm. “If they’re not spending on services because they’re not going to movies or amusement parks, they’re going to derive utility from goods.”

He said he expected goods spending to ease in the second quarter as services spending begins to rebound more strongly.

Americans still have plenty of cash to spend. Households were sitting on a collective $4.1 trillion in savings in the first quarter, up from $1.2 trillion before the pandemic began — although such aggregates can obscure the fact that many families have seen their finances wiped out by the crisis.

Ample savings and rising consumer optimism are giving businesses the confidence to bet on the future as well. Business investment rose 2.4 percent in the first quarter and is now above its prepandemic level. The housing market has been juiced by low interest rates and strong demand; residential construction spending rose 2.6 percent in the first quarter.

As more Americans become vaccinated, economists expect a decline in new unemployment claims.
Credit…James Estrin/The New York Times

Initial jobless claims fell last week to yet another pandemic low in the latest sign that the economic recovery is strengthening.

About 575,000 people filed first-time claims for state unemployment benefits last week, the Labor Department said Thursday, a decrease of 9,000 from the previous week’s revised figure. It was the third straight week that jobless claims dropped.

In addition, 122,000 new claims were filed for Pandemic Unemployment Assistance, a federal program that covers freelancers, part-timers and others who do not routinely qualify for state benefits. That was a decline of 12,000 from the previous week.

Neither figure is seasonally adjusted. On a seasonally adjusted basis, new state claims totaled 553,000.

“Today’s report, and the other data that we got today, signals an improving labor market and an improving economy,” said Daniel Zhao, senior economist with the career site Glassdoor. “It is encouraging that claims are continuing to fall.”

Although weekly jobless claims remain above levels reached before the pandemic, vaccinations and warmer weather are offering new hope. Most economists expect the slow downward trend in claims to continue in the coming months as the economy reopens more fully.

But challenges lie ahead. The long-term unemployed — a group that historically has had a more difficult time rejoining the work force — now make up more than 40 percent of the total number of unemployed. Of the 22 million jobs that disappeared early in the pandemic, more than eight million remain lost.

“The labor market is definitely moving in the right direction,” said AnnElizabeth Konkel, an economist at the online job site Indeed. She noted that job postings as of last Friday were up 22.4 percent from February 2020.

Still, she cautioned that industries like tourism and hospitality would probably remain depressed until the pandemic was firmly under control. She also stressed that child care obligations might be preventing people ready to return to work from seeking jobs.

“We still are in a pandemic — the vaccinations are ramping up, but there is that public health factor still,” Ms. Konkel said. “We’re not quite there yet.”

Same-store McDonald’s sales around the world grew 7.5 percent in the first quarter despite the continuing lockdowns around the world.
Credit…Gilles Sabrié for The New York Times

McDonald’s said Thursday that sales of Big Macs, chicken nuggets and french fries got back to prepandemic levels in the first part of the year.

Global same-store sales grew 7.5 percent in the first quarter from the year-earlier period. That was driven by a big jump of 13.6 percent in the United States, McDonald’s reported. Revenues for the quarter rose to $5.12 billion, topping the $4.7 billion brought in a year ago as well as the $4.9 billion in the first quarter of 2019, before the pandemic struck.

Chris Kempczinski, the president and chief executive officer of McDonald’s, touted the company’s rebound, noting that it had occurred “even as resurgences and operating restrictions persist in many parts of the world.”

Profit in the quarter climbed to $1.5 billion, from $1.1 billion a year earlier.

Chicken was one of the big drivers for growth in the U.S. The company brought back its spicy chicken nuggets for a limited time and entered the competitive chicken-sandwich market with its own version in February.

“While the category is very competitive, we are so far exceeding our projections,” Joe Erlinger, the president of McDonald’s U.S.A., told Wall Street analysts on a call. “We are selling substantially more chicken sandwiches than our previous chicken-sandwich line,” particularly in the late afternoon, he said.

Executives highlighted the company’s recently announced collaboration with the K-pop boy-band sensation BTS, which will start in late May. The company hopes to repeat some of the magic it found last year from a similar partnership with the rapper Travis Scott, when it introduced the Cactus Jack meal, consisting of a Quarter Pounder with cheese, bacon, and lettuce; a medium Sprite; and fries with barbecue sauce. The combo was such a massive hit that some restaurants ran out of key ingredients.

What remains unclear is which consumer behaviors that changed during the pandemic will stick. In the call with analysts, executives said they expected delivery and drive-through to remain important. But breakfast has been slower to rebound.

“We believe that certainly as some consumer habits return to prepandemic ways of life, that the breakfast day part will continue to come back,” Mr. Erlinger said. “And similarly to how it was a real market-share battle prepandemic, we think that market-share battle will absolutely continue and we’re ready and prepared for that.”

The drop in fees could make Microsoft’s store more attractive to independent studios.
Credit…Mike Segar/Reuters

Microsoft will decrease the share of money it charges independent developers that publish PC games on its online store, starting in August, the company said on Thursday.

Developers will keep 88 percent of the revenue from their games, up from 70 percent. That could make Microsoft’s store more attractive to independent studios than competitors like Valve’s gaming store, called Steam, which typically starts by taking a 30 percent cut. Epic Games’ store takes 12 percent.

“We want to make sure that we’re competitive in the market,” said Sarah Bond, a Microsoft vice president who leads the gaming ecosystem organization. “Our objective is to have a leading revenue share and really a leading platform.”

The share of revenue that developers get to keep has come under greater scrutiny across the tech industry. Google and Apple have faced antitrust questions for the 30 percent fees they charge developers whose programs appear in their app stores.

Last year, Epic sued Apple and Google separately, claiming they violated antitrust laws by forcing developers to use their payment systems. Epic had tried to bypass the fees by letting customers pay for items in its Fortnite video game directly through Epic. That caused Apple and Google to boot Fortnite from their app stores.

Apple and Google have since reduced fees for some developers. Epic’s lawsuit against Apple is set to head to trial on Monday in U.S. District Court in Oakland, Calif.

A Shell recharging station for electric vehicles in the Netherlands. Despite investments in renewable energy, Shell’s profit last quarter was largely the result of rising oil and gas prices.
Credit…Koen Van Weel/EPA, via Shutterstock

Strong profit increases from two of Europe’s largest energy companies, Royal Dutch Shell and Total, demonstrated that what really matters for the financial performance of these companies remains the price of oil and natural gas.

Their recent investments in clean energy, described by company officials as essential for the future, remain marginal.

Total said that adjusted net income rose by 69 percent compared with the period a year earlier, when the effects of the pandemic were beginning to kick in, to $3 billion, while Shell said that what it calls adjusted earnings rose by 13 percent to $3.2 billion.

The main factor in the improved performance by both companies was a roughly 20 percent rise in oil prices along with an increase in natural gas prices, leading to higher revenues. During a news conference to discuss the results, Jessica Uhl, Shell’s chief financial officer, said that a $10 jump in oil prices would translate into a $6.4 billion increase in cash for the company’s coffers on an annual basis.

Shell, which cut its dividend last year for the first time since World War II, confirmed that it would increase the payout for the quarter by 4 percent, to about 17 cents a share.

Both companies have tethered their futures to generating and distributing renewable sources of energy. Shell in February said its oil production had peaked in 2019, and it has been investing in various clean energy ventures, including a network of 60,000 charging stations for electric vehicles. And Total has, among other things, invested in options to build offshore wind farms off Britain.

In its earnings statement, Total took the lead among the oil majors in providing details on its investments in renewable energy like wind and solar. The company said these businesses brought in $148 million for the quarter, measured as earnings before interest, taxes, depreciation and amortization. This figure was about 2 percent of the overall total for the company of $7.3 billion, according to analysts at Bernstein, a research firm.

Although Airbus reported a quarterly profit after a full-year loss for 2020,  “the market remains uncertain,”  said Guillaume Faury, the company’s chief executive.
Credit…Chema Moya/EPA, via Shutterstock

Airbus announced Thursday that it had returned to a profit in the first quarter following a 1.1 billion euro loss last year because of the coronavirus pandemic, but its top executive warned that the economic toll would continue.

“The first quarter shows that the crisis is not yet over for our industry, and that the market remains uncertain,” Guillaume Faury, chief executive of the world’s largest airplane maker, said in a statement.

Airbus booked a net profit of 362 million euros ($440 million) between January and March, compared with a loss of 481 million euros a year earlier, as cost-cutting measures — which included more than 11,000 layoffs announced last year for its global operations — bolstered the bottom line. Revenue fell 2 percent to 10.5 billion euros.

Airbus delivered 125 commercial aircraft to airlines in the three-month period, up from 122 a year earlier. Over all, Airbus delivered 566 aircraft to airlines in 2020, 40 percent less than expected before the pandemic.

Airbus has previously warned that the industry might not recover from the disruption caused by the pandemic until as late as 2025, as new virus variants delay a resumption of worldwide air travel.

Given the uncertain outlook, Airbus won’t ramp up aircraft deliveries this year. The company said it expected to deliver 566 aircraft on back order from airline companies, the same number as last year.

It maintained its forecast for an underlying operating profit of two billion euros for the year.

As of

Data delayed at least 15 minutes

Source: Factset


Stocks on Wall Street jumped on Thursday amid indications that the economy is moving toward a recovery to prepandemic levels.

The Commerce Department reported Thursday that the U.S. economy expanded 1.6 percent in the first three months of 2021, compared with 1.1 percent in the final quarter last year, or 6.4 percent on an annualized basis.

A day earlier, the Federal Reserve said that the outlook was improving and that it would continue to provide substantial monetary support, easing investors’ concerns that it would soon start easing the stimulus efforts it launched a year ago when the Covid-19 crisis forced a near shutdown of many parts of the economy.

“While the level of new cases remains concerning,” Jerome H. Powell, the Federal Reserve chair, said, “continued vaccinations should allow for a return to more normal economic conditions later this year.” The central bank kept interest rates near zero and said it would continue buying bonds at a steady clip.

The S&P 500 rose 0.7 percent. Market sentiment continued to rise after President Biden detailed more of his spending plans — which total $4 trillion — to fund expanded access to education and reduce the cost of child care, among other things. The Nasdaq composite gained 0.2 percent.

Oil prices rose. Futures of West Texas Intermediate, the U.S. benchmark, climbed 1.8 percent to $65 a barrel.

The Stoxx Europe 600 fell 0.3 percent.

  • Facebook shares rose 7.3 percent after the company said on Wednesday that profit nearly doubled to $9.5 billion in the first quarter as advertising revenue and user numbers increased.

  • Apple shares fell 0.1 percent even as the iPhone maker’s profit more than doubled to $23.6 billion in the first quarter. The company also said it would buy back $90 billion of its own stock, part of its continued program to return much of its earnings to shareholders.

  • Qualcomm, which makes chips for smartphones, rose 4.5 percent after the company said its revenue increased 52 percent in the first three months of the year compared with the previous year.

  • Airbus shares rose 0.7 percent after the French plane maker said it had returned to a profit in the first quarter following a 1.1 billion euro loss last year. But the company’s chief executive added that the crisis was not over for the industry.

Video

Cinemagraph
CreditCredit…By Adam Ferriss

Today in the On Tech newsletter, Shira Ovide talks to Nicole Perlroth about steps that the U.S. government and individual organizations could take to better prevent ransomware.