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Tuesday July 7, 2020
Zoom's Revenue Soars
Zoom Video Communications, Inc. (ZM) released its latest quarterly earnings on Tuesday, June 2. The company posted record numbers during a time when people around the world were required to find an alternative to in-person meetings.
The videoconferencing technology company reported revenue of $328.17 million for the quarter. This was a 169% increase from revenue of $121.99 million during the same quarter last year.
“We were humbled by the accelerated adoption of the Zoom platform around the globe in Q1,” said Zoom CEO Eric S. Yuan. “The COVID-19 crisis has driven higher demand for distributed, face-to-face interactions and collaboration using Zoom. Use cases have grown rapidly as people integrated Zoom into their work, learning, and personal lives.”
Zoom posted net income of $27.04 million. This was up from $198,000 of net income at this time last year.
Zoom became a household name earlier this year as workplaces and schools began to rely heavily on the company’s video conferencing software. The company’s popularity skyrocketed as coronavirus-spurred lockdowns around the globe created the need to find new ways to continue to be productive. The company reported 265,400 customers with more than ten employees at the end of the quarter. This was a 354% increase from this time last year.
Zoom Video Communications, Inc. (ZM) shares ended the week at $207.60, up 13.3% for the week.
DocuSign Reports Earnings
DocuSign, Inc. (DOCU) reported quarterly earnings on Thursday, June 4. The company’s revenue grew year-over-year.
The digital signature software company reported $297.0 million in revenue. This was up 39% from revenue of $280.9 million in revenue at the same time last year.
“Our strong first quarter results reflect our ability to help organizations accelerate their digital transformation as they adapt to the changing business environment, magnified by COVID-19,” said DocuSign CEO Dan Springer. “Many are taking their first steps with us, while others are expanding their initiatives.”
DocuSign posted a net loss for the quarter of $47.80 million. This was an increased loss over $45.72 million at this time last year.
DocuSign is one of the market leaders in digital signature technology. The company facilitates the execution of documents through digital means rather than through traditional paper signing. During the quarter, social distancing and stay-at-home orders caused many individuals and businesses to move to digital signatures. The company’s shares rose 3% following the earnings release.
DocuSign, Inc. (DOCU) shares ended the week at $139.64, down 1.9% for the week.
Smucker’s Earnings Rise
The J.M. Smucker Company (SJM) posted its latest quarterly earnings on Thursday, June 4. The company’s sales and earnings increased from the prior year.
Net sales came in at $2.09 billion. This was up 10% from net sales of $1.90 billion at this time last year.
“I am extremely proud and thankful for how our employees have responded during the COVID-19 pandemic,” said Smucker’s CEO Mark Smucker. “We ensured our employee safety and well-being, supported the communities where we do business, maintained our product quality standards, and partnered with our suppliers and retailers to provide a steady supply of food for consumers and their pets.”
The company’s net income for the quarter was $226.3 million, or $1.98 per share. This is up from $71 million in net income, or $0.63 per share at the same time last year.
Smucker’s brands include Jif, Meow Mix and Folgers in addition to its namesake line of fruit spreads. The company’s strong earnings in the quarter are attributed to the spike in grocery store traffic as consumers sought to stock up amid the uncertainty surrounding the coronavirus pandemic. Sales for the company’s U.S. Retail Consumer Foods segment rose 22% for the quarter. This was followed by U.S. Retail Coffee with an 11% increase, while U.S. Retail Pet Foods rose 6%.
The J.M. Smucker Company (SJM) shares ended the week at $107.44, down 5.8% for the week.
The Dow started the week at 25,343 and closed at 27,111 on 6/5. The S&P 500 started the week at 3,039 and closed at 3,194. The NASDAQ started the week at 9,471 and closed at 9,814.
Treasury Yields Jump Following Strong Jobs Report
Yields on U.S. Treasurys rose this week as indicators of economic recovery began to surface. An unexpected swing in jobs added from one month to the next boosted investors’ confidence.
On Friday, the Department of Labor released the Employment Situation Summary for May 2020. Nonfarm payrolls rose 2.5 million during the month, up dramatically from April’s loss of 20.7 million jobs.
“Today was a shocking jobs number – and for the first time this year, it was a positive shock,” said Independent Advisor Alliance’s Chief Investment Officer, Chris Zaccarelli. “It’s very encouraging to see workers being recalled back by their employers and the unemployment rate dropped back down in May.”
The benchmark 10-year Treasury note yield was at 0.929% during early trading on Friday after opening the week at 0.659%. The 30-year Treasury bond hit 1.736% midday Friday after Monday’s opening at 1.452%.
The unemployment rate fell to 13.3% for May. In February, the rate hit a low of 3.5% before spiking to 14.7% in April due to COVID-19.
“The glimmer of hope in that report, as awful as it was, was that 78% of the people who lost their jobs would be temporary,” said Scott Clemons, Chief Investment Strategist with Brown Brothers Harriman. “It turns out that optimism seems to have been warranted.”
The 10-year Treasury note yield closed at 0.90% on 6/5, while the 30-year Treasury bond yield was 1.68%.
Mortgage Rates Rise
Freddie Mac released its latest Primary Mortgage Market Survey on Thursday, June 4. The report showed a slight rate increase.
This week, the 30-year fixed rate mortgage averaged 3.18%, up from last week’s average of 3.15%. At this time last year, the 30-year fixed rate mortgage averaged 3.82%.
The 15-year fixed rate mortgage held steady at last week’s average of 2.62%. During this time last year, the 15-year fixed rate mortgage averaged 3.28%.
“While the economy is slowly rebounding, all signs continue to point to a solid recovery in home sales activity heading into the summer as prospective buyers jump back into the market,” said Freddie Mac’s Chief Economist Sam Khater. “While homebuyer demand is up and has been broad-based across most geographies, supply has been slower to improve.”
Based on published national averages, the savings rate was 0.06% for the week of June 1. The one-year CD finished at 0.26%.
Published June 5, 2020