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Business

Walmart, Kroger Raise Prices of Covid-19 Test Kits

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Prices are going up for some of the cheapest and most popular at-home Covid-19 test kits in the U.S.

Walmart Inc.

WMT -1.83%

and

Kroger Co.

KR 2.17%

are raising their prices for BinaxNOW at-home rapid tests, after the expiration of a deal with the White House to sell the test kits at cost for $14.

The two U.S. retail giants and

Amazon.com Inc.

agreed with the Biden administration last summer to discount the tests, which are made by

Abbott Laboratories

ABT -2.35%

and generally cost $24 or more for a box with two tests.

Abbott Laboratories’ FDA-approved BinaxNOW kit is among the most commonly used rapid Covid-19 antigen tests in the U.S.



Photo:

Paul Hennessy/Zuma Press

BinaxNOW, approved by the U.S. Food and Drug Administration, is among the most commonly used over-the-counter, rapid antigen tests, which have been in high demand as the highly contagious Omicron variant spreads across the U.S.

The deal with the White House expired in December, and Walmart said this week that it is raising the kits’ price to $19.98 a box. Kroger now sells them for $23.99. The BinaxNOW tests aren’t currently available on Amazon.

Representatives for Walmart and Kroger said they fulfilled their commitment to sell tests at cost for three months and are taking steps to make tests more available. The White House didn’t respond to a request for comment.

An Amazon spokeswoman said the company is working with suppliers to alleviate shortages. She said Amazon made a large investment to develop its own FDA approved PCR test, which sells for $39.99, lower than most similar tests. The effort, she said, involved setting up an in-house laboratory to process results.

Pharmacy chains

CVS Health Corp.

and Walgreens Boots-Alliance Inc., along with other big retailers, have been selling the tests for $23.99 a box. Other retailers already are charging even more.

To help combat Omicron, the Biden administration is opening up more Covid testing sites and delivering 500 million Covid tests to Americans. WSJ’s Daniela Hernandez breaks down why testing is still a pain point in the U.S., two years into the pandemic. Photo Illustration: David Fang

Even at the higher prices, tests are difficult to find. BinaxNOW is sold out on many major retailers’ websites or takes more than a week to arrive. A Walmart spokeswoman said the BinaxNOW tests are more readily available in physical stores.

Abbott said it is running plants around the clock, seven days a week to pump out 70 million tests a month. “Despite rising U.S. material and labor costs, we have not passed along any of these costs to our customers and the price at retail has not changed since we launched the test,” the company said.

Covid-19 tests—both at-home kits and those done on location in clinics or at drugstores—remain costly and difficult to find in many places as the Omicron-driven surge pushes many Americans to seek out the diagnostic tools. The Biden administration has said it is working to expand access to free testing and has pledged to distribute 500 million free at-home tests. Some cities and states have established similar programs.

The White House said last month that it would begin delivering at-home tests in January and that they would be available to the public free by mail through a new website. Officials haven’t provided details of the plans to mail out tests or to cover the costs of testing.

Kroger now sells BinaxNOW Covid-19 test kits for $23.99 a box.



Photo:

Barrett Lawlis/Eagle-Gazette/USA TODAY NETWOR/Reuters

The cost and availability of tests varies widely. BinaxNOW tests are hard to find online for $24 but can be purchased for twice the price. At-home PCR tests are more readily available but generally cost close to $100 for a single test. Other rapid tests approved by the FDA for home use include the Ellume Covid-19 Home Test and the QuickVue test made by

Quidel.

Free testing is generally offered at medical and community clinics and at retail pharmacies. In places where demand for testing is especially high, people face hours-long lines or scarce appointment slots. How much people pay for in-person tests varies based on a number of factors including whether a person is insured, if they are symptomatic and how quickly they want results.

“When the prices are that high, people will rationalize not using a kit. They’ll wait until they’re sick or need it for school or something,” said Eric Feigl-Ding, an epidemiologist and health economist and a senior fellow at the Washington, D.C.-based Federation of American Scientists. “The problem with this pricing, besides creating a lack of access, is that it creates a perverse incentive for people not to use them.”

The tests need to be free or cost closer to $1, as is the case in much of Europe, to be an effective tool, Dr. Feigl-Ding said. That is because people who have few or no symptoms can still spread the virus.

Write to Sharon Terlep at sharon.terlep@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Rivian Is Shooting for a $64 billion Valuation. Here’s Why That’s Not Crazy.

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Rivian’s assembly line in Normal, Ill.


Courtesy of Rivian

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Electric-truck maker Rivian is set to go public this coming week at a market value that could exceed that of Honda Motor, despite having sold just a handful of vehicles. But that’s not as crazy as it sounds. Depending on where the stock opens, it might even be worth the price.

To many, a market cap around $64 billion makes no sense. The company has essentially no sales, and no manufacturing experience. What it does have is powerful backers—


Ford Motor

(ticker: F) and


Amazon.com

(AMZN)—and lots of expenses. The company burned through some $1.6 billion in the first half of 2021 preparing its vehicles and building its manufacturing plant in Normal, Ill. Honda, by comparison, sells roughly five million cars a year, with sales of about $130 billion.

That isn’t stopping Rivian from aiming high. The company is looking to sell 135 million shares at a price of $72 to $74 a share, according to its latest Securities and Exchange Commission filing, raising about $10 billion in the process. At $73 a share, Rivian stock would be worth about $64 billion based on 882 million shares outstanding after the deal is done.

Some think that valuation is ridiculous. It makes “no sense,” says David Trainer, CEO of investment research firm New Constructs. “Despite the popularity of the electric-vehicle market and huge gains in [


Tesla

(TSLA)], we think investors should avoid the temptation to buy Rivian shares.”

But a dive into the math suggests that the valuation isn’t quite as nuts as it looks. A lot of trucks and sport utility vehicles get sold in the U.S. Roughly half of all new-vehicle sales are SUVs and 20% are pickup trucks. In a normal, nonpandemic year, that’s roughly nine million SUVs and four million trucks.

Rivian’s first product, the R1T, is a


Toyota Motor

(TM) Tacoma-size pickup. Rivian’s second vehicle is an SUV dubbed R1S. At 200,000 units a year, enough to fill its current facility, Rivian would have about a 1.5% share of U.S. SUV and truck sales. Rivian also already has a buyer for its commercial electric vehicles: Amazon, which has ordered 100,000 of them.

“The big question now [is] who’s going to be No. 2 in EVs?” asks Gary Black, the managing partner of the Future Fund Active exchange-traded fund. “My bet would be Rivian, given the huge pickup and SUV total addressable market.”

More important is what Rivian’s long-term market share will be. If EVs capture 20% of the U.S. by 2025—in line with what traditional auto makers are aiming for—and Rivian does half as well as Tesla, it could sell 800,000 units a year, generating gross profits as high as $14 billion. A $51 billion valuation, net of cash, would leave Rivian trading at 3.6 times gross profit, slightly higher than Ford.

That’s a very optimistic production ramp and valuation. Still, it shows that investors shouldn’t dismiss the company just because it looks expensive. And with Rivian set to have about $13 billion of cash on hand after the offering, it will have the money it needs to make its dream come true.

Oh, and its truck is very nice, too.

Write to Al Root at allen.root@dowjones.com

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Business

Stock Market Today: S&P 500, Nasdaq Dip After Apple and Amazon Woes

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Oil companies Chevron and Exxon Mobil will be in the earnings spotlight at the end of a busy week.


David McNew/Getty Images

The stock market retreated from earlier gains Friday after


Apple

and


Amazon.com

reported disappointing quarterly results. Plus, signs of caution about the economy weighed on stocks across the board.

In afternoon trading, the


Dow Jones Industrial Average
was flat, after the index climbed 239 points Thursday to close at 35,780. The


S&P 500
and the


Nasdaq Composite
were both down 0.1% Both the Nasdaq and the S&P 500 hit record highs at the close Thursday.

Despite the weak finish, October has been a strong month for stocks. The S&P 500 has gained 5.5% for the month of October, which saw the market rebound from an early autumn drawdown. In September, concerns about supply chain constraints and rising bond yields pushed stocks lower.

Several factors enabled stocks to rebound this month. Bond yields have paused in their larger ascent. Companies have mostly beat earnings estimates. And while risks still remain—yields aren’t necessarily finished rising and supply chain constraints aren’t easing much—retail investors bought the dip.

“They [retail investors] saw the 5% [market decline] and so when they see the opportunity to buy down 5% they step in and they do that,” said John Ham, wealth advisor at New England Investments & Retirement Group.  

Big Tech earnings put the issue of shortages on center stage on Friday.


Apple

(ticker: AAPL) stock fell 2.1% after the company reported a profit of $1.24 a share, in line with estimates, on sales of $83.4 billion, below expectations for $84.9 billion. The company said supply-chain constraints due to chip shortages were worse than expected. iPhone sales were $38.9 billion, below expectations for $41.5 billion. 


Amazon

(AMZN) stock dropped 2.9% after the company reported a profit of $6.12 a share, missing estimates of $8.92 a share, on sales of $110.8 billion, below expectations for $111.6 billion. The company said labor shortages, higher shipping costs, and other rising expenses are eating into profits. Management also guided for current quarter sales of $135 billion at the midpoint of its range, below analysts’ expectations for $142 billion. 

Even if Apple and Amazon stocks were having a better day, the stock market would still look fairly weak. Just over half of S&P 500 stocks were in the red, according to FactSet. 

This comes as the yield curve—the difference in yield between long-dated and short-term debt—declined. The 10-Year Treasury yield slipped to 1.56% from hitting 1.61% earlier. The 2-Year yield held at 0.5%, where it has mostly sat since Tuesday. Higher short-term rates indicate markets anticipate a Federal Reserve rate hike sooner rather than later, which could lower long-term economic demand and inflation. Some on Wall Street have recently flagged the falling yield curve as a potential risk to monitor.

In cryptocurrency markets, Ethereum—the leading crypto asset after Bitcoin—hit an all-time high above $4,400, according to data from CoinDesk.

Here are six stocks on the move Friday:


Chevron

(CVX) gained 0.9% after the company reported a profit of $2.96 a share, beating estimates of $2.21 a share, on sales of $44.7 billion, above expectations for $40.5 billion. 


Starbucks

(SBUX) stock dropped 7.4% after the company reported a profit of $1, beating estimates of 99 cents, on sales of $8.1 billion, below expectations for $8.2 billion. 


Newell Brands

(NWL) stock rose 5.1% after the company reported a profit of 54 cents a share, beating estimates of 50 cents a share, on sales of $2.79 billion, above expectations for $2.78 billion. 


Caterpillar

(CAT) stock rose 0.3% after getting upgraded to Buy from Neutral at UBS. 


Synchrony Financial

(SYF) stock rose 0.3% after getting upgraded to Buy from Neutral at Citigroup. 


U.S. Steel

(X) soared 12% following third-quarter earnings Thursday that smashed expectations and an announcement that the company would raise its dividend.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

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Technology

Twitch Data Leak Shows Some Streamers Make Hundreds of Thousands Per Month

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Leaked data this week from the streaming platform Twitch Interactive revealed that some people can make six-figure monthly incomes from playing videogames in front of a live online audience.

A user of the online chat forum 4chan claimed to have access to the payout information, and several people who called themselves Twitch streamers said many of the figures were consistent with what they had earned. Others said the figures didn’t paint a full picture of their earnings, in part because they didn’t appear to take into account what they make when streaming as part of a group or from third parties.

Twitch broadcasters’ earnings and other company information that was claimed to have been accessed were made public Wednesday. The 4chan user posted the information there to hurt the Amazon.com Inc. unit’s business, the user wrote.

Twitch confirmed a data leak but declined to comment on what information was accessed.

Such data hasn’t been disclosed by Twitch, which was founded in 2011 and acquired by Amazon in 2014 for $970 million in cash. Though the platform is best known for its videogame streamers, many others broadcast themselves playing tabletop games and music, making crafts, exercising and more. One of its most popular categories is called Just Chatting, where streamers discuss all sorts of topics.

Last month, people spent 1.7 billion hours watching Twitch, which is up more than 20% from a year earlier, according to StreamElements, a provider of tools and services for content creators.

The leak announced on 4chan identifies streamers’ monthly revenue-sharing payments from Twitch since August 2019. Last month alone, a videogame streamer in Canada earned approximately $705,000 from the platform, while a group of Dungeons & Dragons players brought in roughly $311,000.

Twitch streamers typically generate revenue from paid subscriptions to their channels and through the platform’s ad-sharing program, which requires certain viewer metrics. For the most popular streamers, Twitch may cut special deals to prevent them from streaming on competing services.

Separately, some Twitch streamers earn income from viewer tips through third-party services as well as sponsorship agreements with brands such as State Farm Insurance. And large videogame publishers, including Electronic Arts Inc. and Activision Blizzard Inc., pay popular Twitch streamers tens of thousands of dollars apiece to play their latest releases on launch day.

Tanya DePass, a 48-year-old Twitch streamer in Chicago who is sponsored by videogame-accessories maker Logitech G, said the data leak is “wildly inaccurate” for those reasons. Further, she said her Twitch earnings vary greatly from month to month. In June 2020, her channel blew up in popularity, which resulted in her receiving her biggest paycheck ever from Twitch a month later.

Ms. DePass, who is Black, attributed the jump to a sudden interest among viewers in Black streamers in response to the murder of George Floyd, a Black man whose 2020 death in police custody was captured on video that went viral. “Anger over George Floyd’s murder mobilized folks to realize we exist,” she said.

Ms. DePass streams herself playing videogames and tabletop games for 10 to 25 hours a week under the name Cypheroftyr. She said she was frustrated by the leak because she thinks it gives people the false impression that streaming is an easy way to make lots of money. In reality, she said it takes a lot of work to promote her channel, keep viewers constantly engaged and handle administrative tasks. Ms. DePass also has had to grapple with racist and sexist taunts. “It’s just exhausting,” she said.

The 4chan user who allegedly posted the Twitch data labeled it “part one,” suggesting there might be more to come.

—Kevin Poulsen contributed to this article.

Write to Sarah E. Needleman at sarah.needleman@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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Business

Apple and Tesla Suppliers Hit By Global Energy Crisis. What to Know.

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A sign outside an Esso filling station informs the public that it has no fuel on Sept. 25, 2021 in London, England.


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A worldwide energy shortage is threatening to develop into a full-blown crisis.

The scenes in the U.K. over the weekend were reminiscent of the 1970s, as drivers queued at thousands of filling stations amid fears of a fuel shortage, sparked by a lack of truck drivers. But the panic at the pumps is really a sideshow. Natural-gas prices in Europe and around the world have skyrocketed amid shortages, leading to higher household bills and suppliers collapsing.

China is experiencing its own energy crunch as shortages have led to record coal prices and soaring natural-gas costs. It’s beginning to have an impact; production at a number of factories—including some supplying


Apple

and


Tesla

—has been halted.


Nomura

and


China International Capital Corp

have already downgraded Chinese growth forecasts as a result.

Meanwhile, oil prices and energy stocks are gaining early on Monday.


Goldman Sachs

raised its year-end Brent crude price forecast to $90 from $80, also lifting its West Texas Intermediate forecast to $87. Most notably, the bank’s analysts said Hurricane Ida should prove to be “the most bullish hurricane in U.S. history.” They added that the global oil supply-demand deficit is larger than they expected, with the recovery in demand from the Delta coronavirus variant impact faster than anticipated. Throw in the global gas shortage and winter oil demand is firmly skewed to the upside, they said.

The bigger question is whether the energy disruptions will derail the economic recovery or not. In any case, for all the talk of a green energy transition, the unfolding events show the economy is still very much powered by traditional fossil fuels.

—Callum Keown

***Join Barron’s senior managing editor Lauren R. Rublin and deputy editor Ben Levisohn today at noon to discuss the outlook for financial markets, industry sectors, and individual stocks. Sign up here.

***

In Congress This Week: Debt Ceiling, Infrastructure Spending

Congress faces several major initiatives this week, including Monday’s Senate vote on federal government funding and the debt ceiling, a House vote on the $1 trillion bipartisan infrastructure bill later this week, and ongoing negotiations on the $3.5 trillion bill Democrats expect to pass by reconciliation.

  • House Speaker Nancy Pelosi said the first priority is to avert a government shutdown on Oct. 1. Senate Republicans vowed to block a vote on the House-approved bill to extend government funding through Dec. 3 and suspend the debt limit until late next year.
  • An alternative is to pass a short-term government funding extension—something Republicans could support—and address the debt ceiling in the $3.5 trillion bill, which is focused on President Joe Biden’s social spending and climate change agenda.
  • Pelosi told ABC’s “This Week” that the House will pass the $1 trillion infrastructure bill this week. She also said it’s “self-evident” the $3.5 trillion bill will get smaller during negotiations. Even some Democrats oppose the bill’s size.
  • Pelosi said that despite clashes over details, Democrats “overwhelmingly” support Biden’s economic agenda, including lowering middle class taxes, measures to fight climate change, and tax rises on corporations and the wealthy to pay for it.

What’s Next: The House voted to suspend the debt limit through December 2022, but Republicans want to absolve themselves of the matter, saying Democrats pushed through $1.9 trillion in spending without GOP votes this spring. Democrats say raising the debt limit should be a bipartisan effort, as it was in the past.

—Janet H. Cho

***

German Elections Leave No Clear Winner to Succeed Merkel

Germany’s Social Democrats seemed to have won a narrow plurality of votes in Sunday’s parliamentary election, but months of tough negotiations with other smaller parties lie ahead for a coalition government to be formed.

  • Olaf Scholz, the current finance minister and Social Democratic candidate for chancellor, led his SPD party to a 26% victory, according to the latest results. He said he would now attempt to form a government before Christmas with the Green and the Liberal parties, which received 15% and 11.5% of the votes, respectively.
  • Angela Merkel will step down when her successor is appointed. Her conservative party only received 24% of the vote, its worst-ever election result. But conservative candidate Armin Laschet nonetheless hinted he might also try to form a government supported by a majority of the Bundestag, the lower house of Parliament.
  • The various parties have different stances on taxes, fiscal policy, the green transition and economic reforms, so analysts think workable compromises will take weeks, if not months, of tough bargaining.

What’s Next: One of the first results of the election might be that Merkel’s 16-year rule is extended until the end of the year. And that the SPD, if Scholz becomes chancellor, will have to row back on some of its proposals on taxes, and the way to finance the fight against climate change.

—Pierre Briançon

***

Chinese Agencies Take Steps to Shield Consumer Funds from Evergrande Crisis

Local governments in China are taking control of


Evergrande
’s
property sales revenue amid an unfolding liquidity crisis at the developer, the Financial Times reported. Stalled development projects this summer sparked complaints and public protests.

  • In a district near Guangzhou, a housing agency asked an Evergrande subsidiary to put presale proceeds from the stalled Sunshine Peninsula residential development into a state-owned custodia account, the report said.
  • An agency in Zhuhai, near Macau, also asked Evergrande to put sales revenue in a government account. As many as eight other provinces have asked Evergrande, since August, to put presale revenue into custodial accounts as it put hundreds of unfinished developments on hold.
  • Evergrande has $300 billion in debt, including $20 billion held offshore. Last week, Evergrande missed a payment on $2 billion of debt, reports said. Separating presale revenue prevents it from being used for debt payments.
  • Federal Reserve Chair Jerome Powell has said China is highly levered for a developing economy but that there isn’t a lot of derelict U.S. exposure to Evergrande debt.

What’s Next: Wall Street is worried how an Evergrande failure would affect markets. Property contributes a quarter of China’s economic activity and is a major source of household wealth there. A drop in property prices could hurt consumer confidence and worsen China’s economic slowdown.

—Liz Moyer

***

Congestion at Busiest U.S. Ports Causing Shipping Delays Nationwide

The busiest U.S. ports at Los Angeles and Long Beach, Calif., are experiencing unprecedented backlogs, with thousands of shipping containers to move and more than 60 ships waiting to dock, contributing to shipping delays nationwide, The Wall Street Journal reported.

  • Shipping demands have increased as businesses replenish their pandemic-depleted inventory, but supply shortages are worsening at apparel maker


    Nike
    ,
    and retailer


    Costco
    ,
    which is limiting paper towel sales.

  • Unlike ports in Asia and Europe that are open around the clock, U.S. ports operate in two shifts on weekdays, because overnight or Saturday shipping is more expensive. Trucking companies are short of drivers to haul boxes, or to load or unload containers from freight trains.
  • In the U.K., thousands of gas stations ran dry Sunday and supermarket shelves were sparsely stocked after a truck driver shortage delayed the delivery of fuel and groceries. The government will issue 5,000 temporary visas for foreign drivers. The British Retail Consortium called it “too little, too late.”
  • To attract more supply-chain workers, logistics providers are raising pay, increasing shift flexibility, and bringing in robots to help with surging e-commerce volumes.


    Walmart
    ,


    Amazon

    and


    United Parcel Service

    are offering signing bonuses, including college tuition help.

What’s Next: Worker shortages are speeding up automation in what were largely manual warehouse and fulfillment operations.


GXO Logistics

added 40% more robotics and automation systems in North America in 2021, with plans to open nine new automated U.S. sites this year for e-commerce.

—Janet H. Cho

***

WHO Reviving Investigation Into Origins of Covid-19 With New Scientists

The World Health Organization is reviving its investigation into the origins of Covid-19, which has killed more than 4.7 million people worldwide, assembling a new team of about 20 scientists to search for new clues in China and elsewhere before critical evidence disappears.

  • The U.S. and its allies have urged the WHO to proceed with the investigation, while China has argued that new inquiries should focus on other countries. A previous WHO-led inquiry that visited Wuhan, China, said data from Chinese scientists could not determine when, where and how the virus began.
  • Previous WHO-led teams urged their Chinese counterparts to analyze blood banks, test farmworkers, and study the earliest cases. China and its allies say the investigation should scrutinize other possible sources such as Italy, or a U.S. military bioresearch facility in Fort Detrick, Md.
  • Columbia University professor Jeffrey Sachs disbanded a task force of scientists investigating the origins of Covid-19, saying its links to the nonprofit EcoHealth Alliance risked perceptions of bias, because it used U.S. funds to study bat coronaviruses with the Wuhan Institute of Virology.
  • Demand for and questions about boosters have increased since the Centers for Disease Control and Prevention recommended them for people 65 and older, those with underlying medical conditions, and those at higher risk of infection who received the


    Pfizer

    –


    BioNTech

    vaccine. More than 2.6 million Americans have received boosters.

What’s Next: New York Gov. Kathy Hochul may bring in the National Guard and out-of-state medical workers to fill hospital staffing shortages, as thousands of unvaccinated workers could lose their jobs with Monday’s mandated healthcare worker Covid vaccination deadline looming.

—Janet H. Cho

***

MarketWatch Wants to Hear From You

My 76-year-old mother recently moved into assisted living, and she may need to sell her house to cover her expenses. Is there something we can do now to reduce the capital gains on the house in the future, should she outlive her savings?

A MarketWatch correspondent will answer this question soon. Meanwhile, send any questions you would like answered to thebarronsdaily@barrons.com.

***

—Newsletter edited by Liz Moyer, Camilla Imperiali, Steve Goldstein, Rupert Steiner

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Business

Amazon to Hire 125,000 Workers With Average Starting Pay at $18 an Hour

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The logo of Amazon at a distribution center.


Ina Fassbender/AFP via Getty Images


Amazon.com

is hiring more than 125,000 drivers and warehouse workers and will pay them a starting average wage of more than $18 an hour —and up to $22.50 in some places, the internet retailer announced Tuesday.

The jobs will be both part time and full time, and in all regions of the country—from Arizona and Indiana to New Jersey and Florida.

Workers in certain locations also will get a sign-on bonus of up to $3,000, which shows just how competitive the job market is. Amazon (ticker: AMZN) didn’t specify the locations where either the bonus or the higher wage will be paid.

Amazon now pays one of the highest minimum wages—if not the highest—by a U.S. retailer. In 2018, the tech giant established a minimum wage of $15 an hour, more than double the federal minimum wage of $7.25.

In the past few years, other retailers and consumer-based companies have raised their minimum wages. This year alone,

Walmart

(WMT),

Costco Wholesale

(COST),

Chipotle Mexican Grill

(CMG), and

McDonald’s

(MCD) have increased their starting pay.

Amazon let one of its warehouse workers in Miami speak to the benefits of its higher pay.

“Before Amazon, I was at a car wash making $9 an hour. Then I came to Amazon and I started earning $15 an hour—it was life-changing for me,” said Leonardo, who the company didn’t identify by his last name.

Amazon is on a hiring spree. At the beginning of September, the company announced it will fill 40,000 corporate and technology jobs; since the pandemic began in March 2020, Amazon has hired more than 450,000 people in the U.S.  

Tuesday’s announcement ties in with its offer last week to pay 100% of college tuition for more than 750,000 U.S. employees.

Also read: This Robot Trader Just Turned Bullish on Amazon, Facebook and Nvidia. Here’s What It Sold.

Amazon shares closed down 0.21%, to $3,450, on Tuesday. The stock has gained almost 6% so far this year and has risen 9.3% over the past 12 months, lagging the

S&P 500’s

18% and 31% gains over the same periods.

Write to editors@barrons.com

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Business

Amazon Delays Return to Office to 2022 Amid Renewed Covid-19 Surge

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Amazon.com Inc. said it would delay corporate employees’ return to offices until next year as conditions around the Covid-19 pandemic evolve.

The company adds to the wave of businesses adjusting their return-to-work plans as the highly transmissible Delta variant of the virus drives a surge in coronavirus cases.

Amazon said Thursday that it was pushing its return to offices to at least Jan. 3, 2022. The online retail giant previously had targeted early September for regular office work to resume. The decision affects office workers both in the U.S. and other countries. The Seattle Times earlier reported on Amazon’s change in plans.

“We will continue to follow local government guidance and work closely with leading medical healthcare professionals, gathering their advice and recommendations as we go forward to ensure our work spaces are optimized for the safety of our teams,” Amazon said.

San Francisco-based Wells Fargo & Co. Thursday said it was delaying its staggered office return to Oct. 4 citing rising Covid-19 cases across the U.S. The guidance doesn’t affect those employees already working in person and some others.

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Business

Etsy Stock Tumbles, Despite a Solid Earnings Report

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Etsy stock slid sharply after earnings.


Gabby Jones/Bloomberg


Etsy

stock was in free fall late Wednesday after the artisanal crafts e-tailer’s sales outlook eclipsed a solid second-quarter earnings report.

Etsy (ticker: ETSY) reported second-quarter earnings of 68 cents a share, beating Wall Street expectations for 63 cents. Sales came in at $529 million, just topping analyst projections for $525 million. The company posted $3 billion in consolidated gross merchandise sales, within management’s guidance for $2.8 billion to $3.1 billion.

Additionally, active sellers increased by 67% in the quarter, and active buyers increased by 50.1% compared with the same period last year. Gross merchandise sales per active buyer also grew 22% year over year.

Still, Etsy stock nosedived 14.5% in after-hours trading to $172.85.

What likely has investors concerned is that Etsy’s third-quarter guidance suggests the company may cede ground as the economy reopens. Management is forecasting revenue between $500 million and $525 million for the September quarter, falling short of analyst estimates for $528 million in sales for the period. Etsy again didn’t provide full-year guidance.

In addition, beating analyst expectations might no longer be enough for e-commerce companies to keep investors satisfied.

Heading into earnings, analysts had high expectations for Etsy, projecting revenue and earnings figures that were on the high end of management’s guidance. While Etsy surpassed analysts’ benchmarks and posted numbers within its own guidance, investors appear to be reassessing the growth potential of e-commerce, especially after the surge in online spending during the Covid-19 pandemic. It also remains to be seen whether the economic reopening will allow bricks-and-mortar retailers to claw back consumer spending that otherwise would have gone online.

Across the board, shares of e-commerce companies have been taking a hit, despite better-than-expected earnings. Just last week, Just last week, Amazon.com (AMZN) beat earnings estimates, but sales came in slightly short of analyst forecasts for the e-commerce giant’s latest quarter. That prompted investors to wipe 7.4% off the company’s market capitalization in after-hours trading in the wake of the report.

Write to editors@barrons.com

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Business

Amazon Earnings Show a Sharp E-Commerce Slowdown

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Aaron P. Bernstein/Getty Images


Amazon

shares are heading lower in late trading Thursday after the e-commerce and cloud computing giant reported mixed results for the June quarter, with better-than-expected profits but sales that fell shy of Wall Street estimates.

The miss reflects a shortfall in Amazon’s e-commerce business, which suffered a sharp deceleration from recent growth trends. The e-commerce slowdown was partially offset by better-than-expected results in the company’s cloud computing, advertising, and third-party seller segments.

For the quarter, Amazon (ticker: AMZN) posted sales of $113.1 billion, up 27% from a year ago, or 24% when adjusted for currency, right in the middle of the company’s guidance range of $110 billion to $116 billion, and a little shy of Wall Street’s consensus of $115.4 billion. Earnings were $15.12 a share, ahead of analysts’ $12.28 per share forecast. Operating income was $7.7 billion, toward the top of the company’s projected range of $4.5 billion to $8 billion, and just below the Wall Street consensus of $7.8 billion.

Revenue from online stores was $53.2 billion, up 16% from a year ago, or 13% adjusted for currency, well shy of the Street consensus forecast of $57.3 billion. That was below the 41% growth in the March quarter and 49% growth a year ago.

Amazon chief financial officer Brian Olsavsky said on a call with analysts that since May the company’s growth—aside from Prime Day—dropped into the mid-teens, from recent growth in the 35% ro 40% range, and 44% growth in the March quarter. The company sees growth for the September quarter int he 10% to 16% range.

Olsavsky pointed to wider availability of vaccines and consumers leaving the house more as factors in the slowdown, in addition to tough comparisons with a year ago.

Olsavsky added that the company expects a “pattern of difficult comps” to continue for the next few quarters until the company laps the pandemic period.

Third-party services revenue was $25.1 billion, up 38%, or 34% adjusted for currency, above the consensus forecast at $24.8 billion. But that was nonetheless a slowdown from 60% in the March quarter and 53% a year ago.

Amazon Web Services, the company’s cloud business, had revenue of $14.8 billion, up 37%, and well ahead of the Street estimate at $14.3 billion, accelerating from 32% growth in March and 29% growth a year ago.

“Other” revenue, mostly advertising, was $7.9 billion, up 87%, or 83% on a currency adjusted basis, well ahead of consensus at $7 billion, and consistent with recent strong advertising data from

Facebook,

Alphabet and other ad-driven businesses. Physical store revenue was $4.2 billion, up 11%, topping the Street view at $3.9 billion.

North American sales growth, excluding foreign exchange effects, slowed to 21% in the quarter, down from 39% in March and 44% a year ago. Operating margin in North America was 4.7%, down from 5.4% in March, though up from 3.9% a year ago. International sales were up 26%, down from 50% in the March quarter, and 41% in the year earlier quarter.

For the September quarter, Amazon is projecting sales of $106 billion to $112 billion, shy of the Street consensus at $118.6 billion, with operating income ranging from $2.5 billion to $6 billion, versus $6.2 billion a year ago. The company said guidance assumes about $1 billion in costs related to Covid-19. 

Amazon shares are down 7.1% in late trading. The stock is up 11% in 2021 , trailing the

S&P 500

‘s 18% gain.

Write to Eric J. Savitz at eric.savitz@barrons.com

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Business

Jeff Bezos’ Blue Origin Targets Bigger Space Goals

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Jeff Bezos

’ plans for space go far beyond the short trip he is slated to take there Tuesday.

The

Amazon.com Inc.

AMZN -1.59%

founder has poured billions into his Blue Origin LLC space venture over more than two decades, believing humanity must ultimately establish outposts across the solar system.

More immediately, Mr. Bezos’ company is seeking business in a space market that will triple in size to more than $1 trillion in annual sales by 2040, Morgan Stanley says, assuming rapid technological developments enable routine moon landings, asteroid mining and space tourism.

Blue Origin’s crew capsule interior. The company has spent years developing rockets, engines and vehicles.



Photo:

Blue Origin

His own giant leap comes when Blue Origin is scheduled to launch Mr. Bezos and three other people to the edge of space in an 11-minute flight, the first launch with passengers on the company’s New Shepard rocket.

A successful trip could provide traction in an emerging space-tourism market, which includes

Richard Branson’s

Virgin Galactic Holdings Inc.

Blue Origin’s broader challenge is winning the kind of large government contracts that provide a steady revenue stream and lend credibility to companies that secure them. Space Exploration Technologies Corp., the formal name for

Elon Musk’s

SpaceX, has jumped ahead of Blue Origin in winning those deals.

For years, Blue Origin has been building up operations and developing a portfolio of rockets, engines and vehicles. That push has been animated by what Mr. Bezos has described as his passion for space. He has cited the Apollo 11 moon-landing mission as a foundational moment for him and referenced science-fiction writers like Arthur C. Clarke and the scientist and author Carl Sagan in speeches.

A New Shepard rocket launch.



Photo:

Blue Origin

“If we’re out in the solar system, we can have a trillion humans in the solar system, which means we’d have a thousand Mozarts and a thousand Einsteins. This would be an incredible civilization,” Mr. Bezos said during a speech two years ago. To that end, Blue Origin can lower the cost of space launches, in part by developing reusable rockets, Mr. Bezos has said.

The talk from the Amazon founder has been paired with major financial commitments. Mr. Bezos has disclosed he has sold $1 billion in Amazon stock annually to fund Blue Origin.

After founding Blue Origin in 2000, Mr. Bezos began acquiring hundreds of thousands of acres of land in West Texas for the company in the early part of that decade, telling a newspaper in the area in 2005 he wanted to build a rocket launchpad on the property.

Now, in addition to the launch site in Texas, the company has facilities in Florida, California, Alabama and Washington, D.C., as well as headquarters outside of Seattle. It employs more than 3,500 people, including Chief Executive

Bob Smith,

a former executive at

Honeywell International Inc.’s

aerospace unit. The privately owned Blue Origin doesn’t release financial statements.

Mr. Bezos is “doing what he did with Amazon, which is to roll over every nickel he could get into capital equipment and innovation,” said

Howard McCurdy,

a professor at American University who has written about space and the National Aeronautics and Space Administration.

Richard Branson successfully traveled to the edge of space on Sunday, and Jeff Bezos isn’t far behind. But the two billionaire founders’ spacecrafts, flight logistics and altitudes have some differences. Photo illustration: Laura Kammermann

This year, Blue Origin intends to conduct two additional flights with passengers on the New Shepard following Tuesday’s launch, executives said Sunday at a briefing. Mr. Smith didn’t specify how much the company is selling tickets for.

“Willingness to pay continues to be quite high. Our early flights are going for a very good price,” he said.

Outside of the emerging space-tourism market, SpaceX has gained a deeper footing with space-related agencies in Washington. NASA and the Pentagon have spent $2.8 billion tied to 52 prime contracts won by the company led by Mr. Musk over the past 14 federal fiscal years, according to a federal spending database. They have spent $496.5 million in 33 contracts won by Blue Origin over that period.

Blue Origin didn’t respond to questions about competition with SpaceX or its plans for working with government agencies. Mr. Smith has in the past said the company wants to gain work with such customers.

The two companies are sparring over a deal to build a moon lander for a trip planned for 2024. The Apollo 11 moon lander reached the moon in 1969 on July 20, the same date for Mr. Bezos’ scheduled space trip on Tuesday. NASA awarded SpaceX the lander contract in April, but Blue Origin protested that decision with the U.S. Government Accountability Office, a move that could lead to NASA rebidding the contract.

The accountability agency is expected to issue a decision on Blue Origin’s case by Aug. 4. The Dynetics unit of

Leidos Holdings Inc.

also competed for the lander and filed a protest.

SpaceX is now the most prolific launcher, sending up 23 rockets so far this year, according to Federal Aviation Administration data covering licensed launches. Its reusable rockets help cut the cost of reaching space, a strategy also pursued by Blue Origin, which has completed nine such launches since late 2017.

“They need to have a track record,” said

Marco Cáceres,

a space analyst at aerospace consulting firm Teal Group, referring to Blue Origin.

The New Shepard rocket scheduled to go up Tuesday has been designed for tourist trips into suborbital space, with a six-person gumdrop-shaped capsule and windows stretching 3.5 feet by 2.3 feet along its sides. Along with the Amazon founder, the craft’s passengers are Mark Bezos, Mr. Bezos’ brother; Wally Funk, an 82-year-old pilot who graduated in the 1960s from a program for female astronauts; and Oliver Daemen, an 18-year-old Dutch student, the company’s first paying customer.

The company also has been developing the New Glenn rocket, a vehicle that will stand 321 feet tall and is designed to use seven main engines to lift large payloads to orbit. In February, Blue Origin said it had made progress on several hardware components for the rocket and that it was targeting a maiden flight for New Glenn toward the end of next year.

Blue Origin has struck deals to push its technology into the space market. The company is developing a new rocket engine for United Launch Alliance, which launches satellites for the Pentagon and U.S. spy agencies. The engine, which will replace the Russian-made motors now used, is behind schedule. Last week, NASA said Ultra Safe Nuclear Technologies, a Seattle company, would join with Blue Origin,

General Electric Co.

and other firms to design concepts for nuclear-propulsion systems that could power vehicles into deep space.

Blue Origin’s “aspirations are to become a company like SpaceX, like

Boeing,

like

Lockheed Martin,

” said

John Logsdon,

the former director of the Space Policy Institute at George Washington University.

Write to Micah Maidenberg at micah.maidenberg@wsj.com and Doug Cameron at doug.cameron@wsj.com

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