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Bank Earnings Show Diverging Fortunes on Wall Street and Main Street

Hundreds of thousands of small businesses are closing for good. Temporary layoffs at larger companies are becoming permanent. But the country’s largest banks, which together serve a majority of Americans through loans, credit cards or deposit services, are not raising an alarm.

In their third-quarter earnings reports this week, big banks have said they are generally prepared for a wave of loan defaults they expect in the second half of next year. And their own fortunes are just fine: A trading and investment banking bonanza on Wall Street is helping them stay profitable.

A few common themes have emerged from the reports.

The pandemic has made for a turbulent year across a wide range of markets, but all the trading that investors have done in response has kept the revenue rolling into the banks.

Goldman Sachs reported strong markets revenue on Tuesday, helping it generate profits of $3.62 billion — far surpassing analyst expectations of $2 billion. Trading of bond products linked to interest rates, corporate credit, mortgages, and the prices of oil and other commodities lifted the bond division’s quarterly revenue 49 percent higher from the same period last year. In stocks, divisional gains were 10 percent.

In a call with analysts, Goldman executives said some of the boom had come because the firm increased its share of trading activity on behalf of the market’s 1,000 biggest money managers and other active traders who give business to Wall Street.

Goldman’s asset-management operations benefited from a rally in stock prices as well. A rise in the value of its positions in companies like the online commerce platform BigCommerce (up more than 40 percent since its shares began trading in August) and the medical equipment maker Avantor (up nearly 30 percent this year) helped the division generate 71 percent more revenue.

But it was not just Goldman that benefited. Bank of America’s investment banking business had the second-best performance in its history in the third quarter, trailing only this year’s second quarter, according to the bank’s chief financial officer. At JPMorgan Chase, trading revenue rose 21 percent and investment banking revenue 52 percent from a year earlier.

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Credit…Justin Sullivan/Getty Images

Steeling themselves for widespread defaults by customers unable to pay credit-card, home-loan or other debts because of the pandemic, the biggest banks have sent vast sums of cash into special pools they will draw from to cover losses in the future. But in general, the banks say, their customers are doing better than they expected.

The reason? Bank officials pointed to the trillions of dollars the federal government has distributed in the form of enhanced unemployment benefits, forgivable small-business loans and other programs created this spring by the CARES Act.

“Recent economic data has been more constructive than we would have expected earlier this year,” JPMorgan’s chief financial officer, Jennifer Piepszak, said on a call with journalists on Tuesday. “Over all, consumer customers are holding up well. They have built savings relative to pre-Covid levels and, at the same time, lower debt balances.”

This quarter, the banks each set aside less money than in previous quarters to prepare for losses. Bank of America and JPMorgan Chase said their credit-card customers were making their payments again.

The bank with the most strained customers seems to be Wells Fargo, which said it had spent nearly $1 billion trying to help customers who were struggling to repay their loans come up with new payment plans to keep them from defaulting. Even so, the bank said, its borrowers are less likely to fall behind now than they were earlier this year.

While government relief programs have prevented serious problems so far in the financial sector, none of the banks are banking on more stimulus.

In their economic forecasting, each bank takes a range of possible outcomes into account, from better than expected to doomsday. On Wednesday, Bank of America’s chief financial officer, Paul Donofrio, said just one of the scenarios it was looking at might contain more stimulus money. And that model is based on a consensus of various Wall Street economists’ forecasts; the bank’s own internal models aren’t counting on further relief.

JPMorgan’s economic forecast accounts for the effects of a government stimulus package only until the end of 2020. No more stimulus is built into its models for 2021.

The bank’s chief executive, Jamie Dimon, and his peers have all pointed out that the industry is grappling with a great deal of uncertainty about the future. JPMorgan might be overprepared if the economy fares better than expected — but a worst-case scenario could still expose the bank to heavy losses.

Although his bank is not expecting further federal relief next year, Mr. Dimon said another round of stimulus would be important.

“There are still 12 million people unemployed. There is still a lot of pain and suffering. There are still a lot of small businesses that need help,” he said.

Indeed, calls for more government aid to struggling businesses are growing, even as an impasse in Washington seems unlikely to end as Election Day draws near.

On Wednesday, a former Goldman Sachs executive, Gary Cohn — who served for a year as President Trump’s economic adviser — urged lawmakers to get a deal done quickly.

“This isn’t a matter of politics, this is a matter of protecting our economy as we know it,” Mr. Cohn wrote on Twitter.

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Snowflake Stock More Than Doubles in IPO Debut

SAN FRANCISCO — It’s bonanza time in Silicon Valley and on Wall Street.

Snowflake, a data storage and analytics provider, kicked off a frenzied phase of technology initial public offerings on Wednesday when its stock opened at more than double its listing price and then soared in early trading, in a sign of Wall Street’s appetite for fast-growing companies.

The company opened at $245 a share on the New York Stock Exchange, up from $120 set by its bankers, and then shot up to as high as $319 before closing at $254. The listing, which valued Snowflake at $70.4 billion, was the largest so far this year and the largest ever for a software maker, according to Renaissance Capital, which tracks I.P.O.s. It was also a major payday for Snowflake’s venture capital investors, who had valued the start-up at $12.4 billion just seven months ago.

Snowflake is among several prominent tech companies that are expected to list their shares in the coming months as the tech industry thrives amid the pandemic-induced economic downturn. After a lull in I.P.O.s during the volatile early months of the coronavirus crisis this spring, new listings roared back over the summer and have accelerated in recent weeks, even as tech stocks hit some recent turbulence.

Other companies are also rushing to get out ahead of the Nov. 3 election, which could lead to more volatility. They include Airbnb, the home rental company; DoorDash, the on-demand delivery provider; Wish, an e-commerce site; Palantir, a data analytics start-up; OpenDoor, a real estate marketplace; and Asana, a collaboration software provider.

This week, the software companies Sumo Logic, American Well Corporation and Unity Software are also set to go public, along with JFrog, which listed its shares on Wednesday. Together, the debuts represent a private market value of more than $78 billion.

Investors are eager to back hot I.P.O.s to juice their returns, said Kathleen Smith, principal at Renaissance Capital. “We’ve been on this rocket ship of returns since the drop in March,” she said.

But Ms. Smith cautioned that Snowflake’s high price set it up for trouble if it did not keep growing quickly. “It’s nosebleed territory,” she said. “It can’t mess up on the growth side.”

Frank Slootman, Snowflake’s chief executive, agreed. “This is just a hot deal, and we’ll have to live with the consequences of it,” he said in an interview with CNBC.

The action followed weeks of mounting hype over Snowflake, which offers database software that companies use to store and analyze their reams of information. Mr. Slootman, a longtime Silicon Valley software executive who has led Snowflake since 2019, previously ran ServiceNow and Data Domain, both of which also went public.

On Tuesday, Snowflake sold 28 million shares for $120 each, a sharp increase from its initial price range of $75 to $85. It raised a total of $3.4 billion in its offering, which was led by Goldman Sachs and Morgan Stanley.

The company’s revenue has been growing quickly, jumping 133 percent in the first six months of the year to $242 million, up from $104 million during the same period last year. But it is also unprofitable, losing $171 million in the first half of this year. In its offering prospectus, Snowflake emphasized that once customers begin using its services, it often gets them to move more of their data onto its platform.

Snowflake’s largest investors include Sutter Hill Ventures, which owns 20 percent of the company, as well as Altimeter Capital, Redpoint Ventures, Sequoia Capital and Iconiq Capital. Last week, Berkshire Hathaway and Salesforce Ventures each agreed to purchase $250 million of shares in Snowflake’s public offering, stoking hype around the listing.

In recent years, public market investors have been skeptical of the richly valued, money-losing “unicorn” start-ups that enjoyed a decade of free-flowing venture capital. Last year, Uber’s I.P.O. flopped and WeWork, the co-working company, pulled its I.P.O. after intense scrutiny.

The arrival of the coronavirus in March further threatened to upend the start-up industry. But the opposite has happened. Start-ups and big technology companies alike have benefited as people work and learn from home and live more of their lives online. Now start-ups are taking advantage of the booming stock market and investor excitement for tech.

Several tech start-ups with upcoming market debuts plan to try new methods and processes for the transaction. Some, including OpenDoor, the vehicle sales site Shift Technologies and various electric vehicle makers, are agreeing to “blank check” mergers via special purpose acquisition companies. Such transactions offer more flexibility around deal terms and can be completed quickly.

Others, like Palantir and Asana, said they would go public via direct listing, which bypasses the traditional underwriting process. With a private valuation of $20 billion, Palantir could be the largest company to try such a transaction, following in the footsteps of Slack, the workplace collaboration service, and Spotify, the music streaming company. Venture capitalists have argued for this method because it does not aim for a first-day trading “pop” that indicates the company could have priced its shares higher and raised more money from the transaction.

Past direct listings have also not raised new capital, but in August, the Securities and Exchange Commission approved the New York Stock Exchange’s plan to let companies raise money in direct listings. The plan has been criticized by some as harmful to potential investors.

Other companies may explore the Long Term Stock Exchange, a new trading platform created by Eric Ries, author of tech bible “The Lean Startup.” The exchange, which is intended to give longer-term investors more voting control, is backed by several of Silicon Valley’s top investors. It opened for business last week.

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Snowflake More Than Doubles in Debut as Wall Street Embraces Tech IPOs

SAN FRANCISCO — It’s bonanza time in Silicon Valley and on Wall Street.

Snowflake, a data storage provider, kicked off a frenzied phase of technology initial public offerings on Wednesday when its stock immediately more than doubled in its market debut, in a sign of Wall Street’s appetite for fast-growing companies.

The company opened at $245 a share on the New York Stock Exchange, up from $120 set by its bankers, before shooting to $298 and then later bouncing around. The listing, which valued Snowflake at more than $68 billion, was the largest so far this year and the largest ever for a software maker, according to Renaissance Capital, which tracks I.P.O.s. It was also a major payday for Snowflake’s venture capital investors, who had valued the start-up at $12.4 billion just seven months ago.

Snowflake is among several prominent tech companies that are expected to list their shares in the coming months as the tech industry thrives amid the pandemic-induced economic downturn. After a lull in I.P.O.s during the volatile early months of the coronavirus crisis this spring, new listings roared back over the summer and have accelerated in recent weeks, even as tech stocks hit some recent turbulence.

Other companies are also rushing to get out ahead of the Nov. 3 election, which could lead to more volatility. They include Airbnb, the home rental company; DoorDash, the on-demand delivery provider; Wish, an e-commerce site; Palantir, a data analytics start-up; OpenDoor, a real estate marketplace; and Asana, a collaboration software provider.

This week, the software companies Sumo Logic, American Well Corporation and Unity Software are also set to go public, along with JFrog, which listed its shares on Wednesday. Together, the debuts represent a private market value of more than $78 billion.

Investors are eager to back hot I.P.O.s to juice their returns, said Kathleen Smith, principal at Renaissance Capital. “We’ve been on this rocket ship of returns since the drop in March,” she said.

But Ms. Smith cautioned that Snowflake’s high price set it up for trouble if it did not keep growing quickly. “It’s nosebleed territory,” she said. “It can’t mess up on the growth side.”

Frank Slootman, Snowflake’s chief executive, agreed. “This is just a hot deal, and we’ll have to live with the consequences of it,” he said in an interview with CNBC.

The action followed weeks of mounting hype over Snowflake, which offers database software that companies use to store and analyze their reams of information. Mr. Slootman, a longtime Silicon Valley software executive who has led Snowflake since 2019, previously ran ServiceNow and Data Domain, both of which also went public.

On Tuesday, Snowflake sold 28 million shares for $120 each, a sharp increase from its initial price range of $75 to $85. It raised a total of $3.4 billion in its offering, which was led by Goldman Sachs and Morgan Stanley.

The company’s revenue has been growing quickly, jumping 133 percent in the first six months of the year to $242 million, up from $104 million during the same period last year. But it is also unprofitable, losing $171 million in the first half of this year. In its offering prospectus, Snowflake emphasized that once customers begin using its services, it often gets them to move more of their data onto its platform.

Snowflake’s largest investors include Sutter Hill Ventures, which owns 20 percent of the company, as well as Altimeter Capital, Redpoint Ventures, Sequoia Capital and Iconiq Capital. Last week, Berkshire Hathaway and Salesforce Ventures each agreed to purchase $250 million of shares in Snowflake’s public offering, stoking hype around the listing.

In recent years, public market investors have been skeptical of the richly valued, money-losing “unicorn” start-ups that enjoyed a decade of free-flowing venture capital. Last year, Uber’s I.P.O. flopped and WeWork, the co-working company, pulled its I.P.O. after intense scrutiny.

The arrival of the coronavirus in March further threatened to upend the start-up industry. But the opposite has happened. Start-ups and big technology companies alike have benefited as people work and learn from home and live more of their lives online. Now start-ups are taking advantage of the booming stock market and investor excitement for tech.

Several tech start-ups with upcoming market debuts plan to try new methods and processes for the transaction. Some, including OpenDoor, the vehicle sales site Shift Technologies and various electric vehicle makers, are agreeing to “blank check” mergers via special purpose acquisition companies. Such transactions offer more flexibility around deal terms and can be completed quickly.

Others, like Palantir and Asana, said they would go public via direct listing, which bypasses the traditional underwriting process. With a private valuation of $20 billion, Palantir could be the largest company to try such a transaction, following in the footsteps of Slack, the workplace collaboration service, and Spotify, the music streaming company. Venture capitalists have argued for this method because it does not aim for a first-day trading “pop” that indicates the company could have priced its shares higher and raised more money from the transaction.

Past direct listings have also not raised new capital, but in August, the Securities and Exchange Commission approved the New York Stock Exchange’s plan to let companies raise money in direct listings. The plan has been criticized by some as harmful to potential investors.

Other companies may explore the Long Term Stock Exchange, a new trading platform created by Eric Reis, author of tech bible “Lean Startup.” The exchange, which is intended to give longer-term investors more voting control, is backed by several of Silicon Valley’s top investors. It opened for business last week.

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Palantir, Tech’s Next Big I.P.O., Lost $580 Million in 2019

SAN FRANCISCO — Palantir, a Silicon Valley company with strong links to the defense and intelligence communities, is poised to be the latest in a string of tech companies to offer shares on Wall Street well before turning a profit.

The company sent financial documents to its investors on Thursday night, ahead of its planned debut on the public markets this year. The documents, obtained by The New York Times, offer the first full look into the company’s financials and operations and show growing operating expenses as well as deep losses.

Palantir’s revenue in 2019 was $742.5 million, nearly 25 percent more than the year before. Its net loss of $580 million was about the same as 2018. And expenses were up 2 percent in 2019 to a little more than $1 billion.

The company, which has raised more than $3 billion in funding and is valued by private market investors at $20 billion, has not turned a profit since it was founded in 2003. As early as 2014, Palantir had fanned expectations that it would soon hit $1 billion in revenue. Six years later, it appears to be closing in on that goal. In the first six months of this year, Palantir’s revenue was $481 million.

A Palantir spokeswoman declined to comment. Details from the financial documents were reported earlier by the tech news site TechCrunch.

Palantir was founded by an eclectic group of Silicon Valley entrepreneurs, including Peter Thiel, who helped create PayPal before making an early investment in Facebook, and Alex Karp, Palantir’s chief executive and a former classmate of Mr. Thiel’s at the Stanford University Law School.

The company gained notoriety for its secrecy and government ties, spurred by an investment from In-Q-Tel, the investment arm of the Central Intelligence Agency and encouraged by cryptic comments from Mr. Karp about Palantir’s counterterrorism work.

But Palantir has recently been the subject of sustained protests over its government contracts, particularly its work with Immigration and Customs Enforcement, and critics have called on the company to stop assisting the agency with deportations.

The company licenses two pieces of software, Gotham and Foundry, and provides cloud-computing services and in-person technology support. Its software is designed to aid in data analysis and is widely used by government agencies for tasks like managing complex supply chains or tracking terrorism suspects.

Despite efforts to land more commercial customers, Palantir earned $345.5 million from its work with government agencies in 2019 and $397 million from commercial entities, the documents said. It had 125 customers in the first half of 2020, but did not name them in descriptions of its work.

Mr. Karp had been vocal in the past about his aversion to going public, citing the secret work of Palantir’s customers. An initial public offering “is corrosive to our culture, corrosive to our outcomes,” he said in 2014.

The documents describe Palantir’s plan to go public via a direct listing, in which no new shares are issued and no new funds are raised. This nontraditional method of going public has become more popular among large, high-profile tech companies in recent years, because they can easily raise money from private investors. The direct listings of Slack, the work collaboration software company, and Spotify, the music streaming company, helped popularize the strategy.

In most direct listings, shareholders are not bound by a traditional lockup period before they can sell their stock. But Palantir has imposed a 180-day lockup period. It will allow shareholders to sell 20 percent of their common stock immediately, but they must wait for the lockup to expire to sell more.

The company submitted its confidential filing to go public via direct listing on July 6.

Palantir has arranged a structure to ensure that its founders retain power. They have a special class of shares, Class F, that will have a variable number of votes to ensure the founders control 49.999999 percent of the company’s voting power, even if they sell some of their shares. The company argued to its investors that this structure would allow it to stay “Founder-led” after it went public.

In the documents, Palantir made the case that its strong ties to government contractors were an opportunity, citing the “systemic failures of government institutions to provide for the public.”

“We believe that the underperformance and loss of legitimacy of many of these institutions will only increase the speed with which they are required to change,” the document said.

But the documents also list many risks, including privacy and data protection laws, negative media coverage, the potential loss of Mr. Karp, and customer concentration — 28 percent of Palantir’s revenue came from its top three customers in 2019.

Mr. Karp, who received roughly $12 million in compensation last year, controls 8.9 percent of the company’s voting power. Mr. Thiel controls 28.4 percent of voting through various entities with titles often borrowed from “The Lord of the Rings,” like Rivendell and Mithril.

The name Palantir refers to spherical objects used in “The Lord of the Rings” to see other parts of fictional Middle-earth.

Other stockholders that own more than 5 percent of the company are Founders Fund; Sompo Holdings, the Japanese corporation that operates a joint entity with Palantir in Japan; and UBS. Smaller investors, according to PitchBook, include Fidelity, RRE Ventures, Morgan Stanley and Tiger Global Management.

Cade Metz contributed reporting.

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Saudi Aramco Says Profit Fell 73 Percent as Demand for Oil Shrank

Saudi Aramco, the world’s largest oil company, said on Sunday that its quarterly earnings plunged more than 73 percent compared to a year ago, as lockdowns imposed to curb the coronavirus pandemic drastically cut the demand for oil and slammed prices.

Despite the steep fall in earnings, to $6.6 billion from $24.7 billion, the company said it would continue paying a quarterly dividend of $18.75 billion, almost three times its cash flow. Aramco is locked into paying such a large amount — $75 billion a year — because of commitments made in the run-up to its initial public offering on the Saudi Tadawul stock exchange.

Nearly all of the dividend money will go to the Saudi government, which owns more than 98 percent of the company.

Continuing to pay such a large dividend distinguishes Aramco from other oil giants, like BP and Royal Dutch Shell, which have recently cut their payouts to preserve capital in difficult times.

“While other oil companies are taking the opportunity to reset the dividend, Aramco are somewhat locked into the IPO commitments,” said Neil Beveridge, an analyst at Bernstein, a market research firm. Mr. Beveridge estimated that Aramco is likely borrowing around $12 billion to pay the dividend.

Recently, a surging Apple dethroned Saudi Aramco as the world’s most valuable company. Apple now has a market capitalization of about $1.9 trillion compared to about $1.76 trillion for the Saudi company.

The earnings results showed other impacts of the fact that Aramco is under the overall direction of the Saudi government. Rather than cutting production as the pandemic took hold, as might have been expected, the company ramped it up under the orders of the government, which was engaged in a price war with Russia.

The company said Sunday that on April 2 it achieved a record daily production of 12.1 million barrels. The Saudi production surge sent a gusher of oil into the market as demand was plummeting, rattling markets. Futures for the U.S. benchmark, West Texas Intermediate, briefly reached a negative price.

In May, Saudi Arabia reined in production through an agreement reached under pressure from the Trump administration. Prices for Brent crude, the international benchmark, have risen from their April lows of under $20 a barrel to about $44 a barrel but still remain down about a third on the year. Under that agreement the Saudis are able to increase production by 500,000 barrels a day in August, but without a discernible impact on prices so far.

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After Taking a Pandemic Hit, Billboard Ad Companies See Signs of Hope

Jeremy Male is an executive in a branch of the advertising business — billboards — that took a huge hit in the spring. So he was heartened by what he saw this week on his commute from Greenwich, Conn., to his office in Manhattan.

Through the windows of the Metro North train and on his walk from Grand Central Terminal to the Chrysler Building, Mr. Male saw ads, ads, ads.

He is the chief executive of Outfront Media, a company that sells space on more than 500,000 billboards and other platforms in North America, including the sides of buses and the interiors of subway cars. And like other companies that specialize in so-called out-of-home display ads, Outfront Media has been hurt by the pandemic.

In an earnings report on Wednesday, Mr. Male said Outfront Media’s overall revenue for the second quarter of 2020, a three-month period of pandemic-related lockdowns across the United States, had declined nearly 50 percent from a year earlier.

It was a similar story for Clear Channel Outdoor, which sells space in 31 countries. On Friday the company said that its overall revenue fell nearly 55 percent during the same period. It was even worse for the advertising firm JCDecaux, which has more than 1 million promotional panels worldwide. Its advertising revenue sank nearly 66 percent.

Before worldwide lockdowns went into effect, out-of-home advertising was embracing digital innovation and growing faster than many other parts of the industry. But when the virus hit, budget-strapped companies scaled back how much they spent on marketing in general — and they were especially wary of buying ad space in shopping centers and along travel routes that fewer people were around to see.

To help them through the crisis, many billboard companies took out loans and renegotiated contracts with airports and public transit organizations, and members of JCDecaux’s board cut their compensation for the year by 25 percent.

A second wave of Covid-19 cases has disrupted reopening efforts, sparking renewed discussion about the future of urban living. But during a conference call with analysts this week, Mr. Male, of Outfront Media, said the return of out-of-home ads in New York suggested that cities “are going to be hugely relevant,” even after the pandemic. And that will be good for his part of the ad business: New York and Los Angeles represent 40 percent of Outfront Media’s revenues.

Advertising executives said this week that the worst may be over, as more people return to work or go on road trips. But any recovery will be gradual: Outfront Media expects billboard revenue to decline 25 percent during the third quarter, in comparison with the same period last year (after a second-quarter drop of 38 percent) while also forecasting that its revenue from transit ads will fall 65 percent.

Based partly on his observations, Mr. Male said that young people, a prime target for advertisers, would continue to flock to urban areas. “They ain’t going to be out in Westchester,” he said. “They’re going to want to be here in the city.”

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Uber’s Revenue Craters, as Deliveries Surge in Pandemic

OAKLAND, Calif. — Uber is synonymous around the world with ride hailing. But as the coronavirus pandemic shows few signs of loosening its grip, the company may become more closely associated with another business: delivery.

Uber said on Thursday that its ride-hailing business had cratered in the second quarter as people traveled less in the pandemic. The company’s revenue fell 29 percent to $2.2 billion from a year ago — the steepest decline since its initial public offering last May — as its net loss totaled $1.8 billion.

But its Uber Eats food delivery service surged, with revenue more than doubling from a year ago to exceed that of ride hailing for the first time. Revenue for Uber Eats soared to $1.2 billion, while rides came in at $790 million.

Dara Khosrowshahi, Uber’s chief executive, said in a call with investors on Thursday that the varied pandemic responses around the world had created “a tale of 10,000 cities” for the company, with business recovering in some regions and not in others.

In spite of the challenges, he said delivery was “a very high-potential opportunity” for Uber to expand even further by offering deliveries of home goods, prescription medications and pet supplies.

Uber has doubled down on food delivery in recent months. In May, Mr. Khosrowshahi sought to acquire Grubhub, a delivery service, but the companies struggled to agree on terms and to deal with potential antitrust scrutiny. Last month, Uber said it would instead acquire the delivery service Postmates in an all-stock deal valued at $2.65 billion.

Buying Postmates is expected to give Uber roughly 35 percent of the U.S. food delivery market, analysts said. That would allow Uber to challenge the delivery leader, DoorDash, which is estimated to have a 45 percent market share. The mixed results sent Uber’s share price down more than 2 percent in after-hours trading.

“Right now, they are swimming in the red ink,” said Dan Ives, managing director of equity research at Wedbush Securities. “Investors are still giving them the benefit of the doubt because of Uber Eats.”

Uber has consistently lost money, and Mr. Khosrowshahi remains under pressure to make it profitable. The company’s net loss in the second quarter narrowed from $5.2 billion a year ago, when it was dealing with stock-based compensation costs from its initial public offering. Uber said it still intended to become profitable sometime next year.

The company also said there were some signs that its rides business was improving internationally. In France, business had recovered about 70 percent, it said, while rides to work and to social gatherings in places such as Hong Kong, New Zealand and Sweden were higher than they had been before the pandemic.

But in the United States, which is one of Uber’s largest markets, rides were down 50 percent to 85 percent in many major cities.

Uber also faces legal challenges in California and Massachusetts, where the state attorneys general have sued Uber and Lyft for violating labor law. Drivers in both states should be classified as employees, not independent contractors, and be entitled to full employment benefits, the states have said.

If the lawsuits are successful, they could diminish Uber’s business because it would make it more expensive to operate, analysts said.

“It will be hard to argue that Uber and Lyft are the future of transportation,” said Tom White, an analyst for D.A. Davidson. “These guys will look a lot more like tech-centric, tech-smart taxi operators.”

Most drivers prefer to remain independent contractors, Mr. Khosrowshahi said. “We are confident in our position,” he said.

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Disney, Staggered by Pandemic, Sees a Streaming Boom

The Walt Disney Company reported doomsday financial results on Tuesday as a result of the coronavirus pandemic and a television-related write-down, with net quarterly losses totaling $4.72 billion.

But Disney’s newest and, as far as many investors are concerned, most important business — streaming — experienced blockbuster growth as people quarantined at home. Disney said it had more than 100 million subscribers worldwide across its Disney+, Hulu and ESPN+ streaming services. Powered by the release of “Hamilton,” Disney+ has about 60.5 million by itself, hitting the low end of its initial five-year goal after only nine months in operation.

To further strengthen its streaming business, Disney said that it would bypass theaters in the United States, Canada and part of Europe and make “Mulan” — a $200 million film — available to Disney+ subscribers on a premium basis. Indefinite access will cost $30 on top of Disney+ membership and start on Sept. 4.

“Mulan” had been scheduled for release in theaters worldwide in March. Disney said it would still release the live-action movie in countries where theaters are open but Disney+ is not available. That includes China, where the film’s story takes place.

“The tremendous success of Disney+ in less than a year clearly establishes us as a major force in global direct-to-consumer space,” Bob Chapek, Disney’s chief executive, told analysts on a conference call. “We are looking at ‘Mulan’ as a one-off as opposed to a new windowing model.” Mr. Chapek added, however, that Disney was “excited” to discover how a major film might perform in online release.

Robert A. Iger, Disney’s executive chairman and former chief executive, did not participate in the call, his first such absence since naming Mr. Chapek chief in February.

Disney also announced that it would introduce a new general entertainment subscription streaming service overseas. It will be called Star, arrive next year and offer programming from Disney properties like ABC, FX, Freeform, Searchlight and 20th Century Studios, which Disney bought from Rupert Murdoch last year.

As such, Disney will not pursue an international rollout of Hulu, which is available only in the United States.

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Credit…Gerardo Mora/Getty Images

Revenue in the quarter that ended on June 27, the third in Disney’s fiscal year, added up to $11.78 billion, falling from $20.26 billion a year ago. In the most-recent quarter, Disney furloughed an estimated 100,000 employees, cut executive pay by up to 50 percent and took out a $5 billion line of credit to bolster its liquidity, on top of $8.25 billion secured in March. The company also suspended its summer dividend and slashed $700 million in expansion spending at its domestic theme parks.

Per-share losses totaled $2.61 — a stark departure from the spectacular growth the company delivered from 2006, when it bought Pixar, to last year, when it swallowed the majority of Mr. Murdoch’s entertainment empire. In the same period last year, Disney had a profit of 79 cents per share.

Excluding one-time items, Disney squeaked out per share profit for the most recent quarter of eight cents, better than analysts were expecting. The items included nearly $5 billion of write-downs, in large part related to Disney’s traditional international television business. Disney has closed down more than 20 overseas cable channels so far this year.

Increasingly cost-conscious consumers are canceling their cable and satellite service in larger numbers, resulting in lower subscriber fees and advertising sales for companies like Disney, which owns the FX, Freeform, National Geographic, Disney Channel and Disney Junior cable networks. It is not just overseas: Richard Greenfield, a founder of the LightShed partners research firm, estimates that Americans will be cutting the cord at an 8 percent rate by the end of the year, compared with a 6 percent rate in the spring.

Despite the impact of the pandemic, Disney’s share price has been remarkably buoyant, with investors overlooking near-term losses and focusing on comeback efforts — most notably the return of some sporting events and the reopening of a retrofitted Walt Disney World to a limited number of visitors. The early success of Disney’s streaming division has also helped Disney shares, which climbed 5 percent in after-hours trading on Tuesday, to about $123.

Hulu has been on a roll because of new programming, including the FX-supplied series “Mrs. America,” which received eight Emmy nominations. Disney+ created a cultural thunderclap in early July, when it released a live capture of the original “Hamilton” stage production.

But building streaming services is tremendously expensive. Losses at Disney’s streaming division grew to $706 million from $562 million in the quarter.

Disney Media Networks, a division that includes ESPN, was helped by the pandemic, at least from a fiscal standpoint. It had operating profit of about $3.2 billion, a 48 percent increase, because ESPN was able to defer substantial rights payments to the N.B.A. and Major League Baseball. Disney’s movie studio held its own; operating profit fell 16 percent, to $668 million, in part because theaters were closed and the company did not have to spend hundreds of millions of dollars to advertise the arrival of new films.

But it was a brutal period for Disney’s theme park division, where operating profit plunged $3.7 billion, resulting in a loss of about $2 billion. Christine M. McCarthy, Disney’s chief financial officer, told analysts that Shanghai Disneyland, which reopened in early May, had started to bounce back. But the company’s Florida mega-resort, Walt Disney World, which reopened in mid-July, has performed worse than the company had anticipated.

“We expect that demand will grow when the Covid situation in Florida improves,” Ms. McCarthy said on the conference call. Florida reported roughly 5,500 new coronavirus infections on Tuesday. That is down from more than 9,000 a day last week but is still among the highest infection rates in the nation.

Disney’s theme parks have long been watched as a bellwether for the broader economy. It is unclear whether the masses — reeling from widespread pay cuts and job losses — will be able to afford Disney vacations in the months and years ahead. So far, Disney has not reduced its ticket prices.

NBCUniversal, which operates two major theme parks in Orlando, has also indicated that demand is lighter than anticipated. Universal has put into place multiple rounds of layoffs since its Florida parks reopened in early June, and the company in recent days announced a startling promotion for Florida residents: buy one two-park adult ticket ($164) and get unlimited visits through the end of the year. NBCUniversal said last week that revenue at its theme park unit shrank to $87 million in the most-recent quarter from $1.46 billion.

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Ford Replaces Its C.E.O.

Ford Motor said its chief executive, Jim Hackett, will retire on Oct. 1, ending a three-year run in which the automaker has tried to streamline its operations and focus its business on electric cars, trucks and sport-utility vehicles with mixed success.

Mr. Hackett, 65, will be succeeded by James D. Farley Jr., who had been named chief operating officer in February.

“I am very grateful to Jim Hackett for all he has done to modernize Ford and prepare us to compete and win in the future,” said William Clay Ford Jr., Ford’s executive chairman. The company, he added, is becoming “much more nimble.”

Mr. Hackett, a former chief executive of Steelcase, an office furniture manufacturer that is much smaller and less complex, was named to the top job at Ford in May 2017, as the company’s business was slumping. He promised to revitalize Ford’s operations and steer the company toward vehicles that would generate profits and invest in emerging technologies like electric and self-driving vehicles.

The company is starting to introduce some of the models developed under Mr. Hackett, including a redesigned F-150 pickup truck and the Mustang Mach E, an electric S.U.V. styled to resemble the storied sports car.

“We have lots of work ahead of us to complete our mission, but thanks to Jim, we are a very different company today than we were three years ago,” Mr. Ford said in a conference call to discuss the leadership change.

Mr. Hackett is credited with eliminating money-losing cars from Ford’s North American lineup in favor of more profitable pickups and S.U.V.s. He formed alliances with Volkswagen, the Indian automaker Mahindra and Rivian, a start-up working on electric trucks in which Ford has invested. Mr. Hackett also accelerated plans to develop electric vehicles.

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Credit…Patrik Stollarz/Agence France-Presse — Getty Images

But so far, the turnaround has had little effect on the company’s bottom line and stock price. Ford’s profits fell in 2018 and 2019, dropping to $47 million last year. This year, the pandemic has hammered its business, and the company lost $876 million in the first half of the year.

Wall Street analysts have criticized Mr. Hackett for stopping short of presenting a full turnaround plan with detailed financial goals and timetables. Ford had planned to do so early in his tenure, but changed course and presented only broad targets and revealed its plans piecemeal as it rolled out specific initiatives and projects.

Ford shares were trading at about $11 when Mr. Hackett arrived. The stock was trading at $6.77 Tuesday afternoon, up about 1 percent.

Mr. Hackett “faced challenges in technology changes and current operations without technology or auto industry experience,” said Erik Gordon, a business professor at the University of Michigan who follows the auto industry.

Investors value Ford at about $27 billion, just one-tenth the market capitalization of Tesla, the electric automaker that makes far fewer cars and has been around only since 2003.

Mr. Farley, 58, joined Ford in 2007 from Toyota Motor, and has held a variety of jobs, including running the company’s marketing, its European operations and a new business strategy group.

Mr. Farley said his first priority is ensuring a smooth transition. He added that he is optimistic about the company’s prospects now that it has introduced the new F-150, a new Bronco S.U.V. and the Mustang Mach E, a potential Tesla rival slated to go into production late this year.

On his list of tasks are raising Ford’s profit margin in North America to 10 percent or more, cutting costs and reviving the company’s sales in Europe, China and South America.

“I’m inspired by the momentum we are building,” Mr. Farley said in the conference call. “To fulfill our mission, we need to swing for the fences.”

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‘A Big Correction’: Pandemic Brings Change to ‘Bloated’ Ad Industry

The advertising industry’s tendency toward excess — catered parties in Las Vegas headlined by pop stars; unwieldy internal hierarchies stuffed with countless director roles; throw-it-at-the-wall ad placement — has persisted for years despite concerns about wastefulness.

The pandemic may force all of that to change.

Some people in the industry say a correction was necessary. Marketing budgets have dwindled as the coronavirus led to nationwide lockdowns and canceled events, and customers are no longer in the mood for flashy TV commercials or bright, cheerful billboards.

The research firm Forrester predicted last week that advertising spending in the United States would decline by 25 percent this year and would not recover until 2023. For Twitter, advertising revenue fell 23 percent in the most recent quarter. Now the platform has said it is looking into subscriptions and other ways to make money that do not depend on ads.

The ad giant Omnicom Group said on Tuesday that revenue in its second quarter slumped nearly 25 percent and that the decline “is expected to continue for the remainder of the year.” Like many of its peers, it laid off 6,100 employees, shed more than 1 million square feet of space, froze hiring and implemented some pay cuts.

In place of the pre-pandemic parties and dinners, the longtime advertising executive Gaston Legorburu has been going “from war room to war room” at Fortune 500 companies, where he said he found many advertising plans and marketing departments in limbo. His agency, Glue IQ, has placed interim workers at companies that have cut back their staffs.

“There’s a big correction — a lot of these teams have gotten too big and too bloated,” he said. “They’re now having the realization that they can do twice as much with half as many people.”

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Credit…Chipotle

While the industry tightens, the ads it produces have become simpler and more practical. Campaigns are often produced quickly and on the cheap as companies have tried to adjust to the initial shock of lockdown, worldwide civil rights protests and the seesaw of reopenings that have sometimes been interrupted by new outbreaks.

More clients have asked that their ads be made by and feature a more diverse group of people, while also demanding more evidence that the ads are effective. Agencies have experimented with digital tools to help brands stay relevant, such as a “tension map” that analyzes online conversations around the country.

“This is an industry that is constantly talking about wanting to transform itself, but that is also constantly sticking to very traditional approaches,” said Marcelo Pascoa, the vice president for marketing for the beer brand Coors. “Old habits die hard, but people are being forced out of necessity to adapt faster.”

In 2020 and 2021, agencies will shed 52,000 jobs, according to Jay Pattisall, an analyst with Forrester. Half the jobs will not return, he predicted. Last week, the agency Wieden & Kennedy laid off 11 percent of its work force, citing “an impasse” with the pandemic. Havas, another large ad company that laid off employees, said that recovering “will undoubtedly take more time than hoped.”

“There will be fewer and smaller agencies that are just as capable, if not more capable, because they’ll lean on technology for basic tasks — like a bot that takes notes for you during a call, that processes the paperwork to hire an influencer for a campaign, or does audience analysis for a media planner,” Mr. Pattisall said.

Other work may go to part-time contractors, as companies seek flexibility, said Kenny Tomlin, who recently co-founded the digital agency CourtAvenue. Mr. Tomlin has helped connect Fortune 100 brands with “pre-tired” marketing professionals — workers who are on the cusp of retirement but still want occasional work.

“There are a lot of client engagements right now that are project-based, where they don’t want to sign multiyear retainment agreements, and they don’t know what their long-term budgets are,” Mr. Tomlin said.

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Credit…Bud Light

The pandemic and the Black Lives Matter protests have forced many companies to take a hard look at their marketing strategies. Visa said this month, during what it called “a time of great introspection and change,” that it would take bids from ad agencies hoping to become its go-to creative partner. The company, which spent $235 million on marketing in the first quarter of 2020, said it would consider candidates’ commitment to diversity in its review.

Coca-Cola is also “reassessing our overall marketing return on investment on everything from ad viewership across traditional media to improving effectiveness in digital,” James Quincey, the chief executive, said during a conference call last week. The company will “be judicious in our use of marketing,” he added, as it tries to track changes in regional lockdown policies.

But there are reasons for optimism. Dentsu, a major advertising holding company, has returned some agency employees to full shifts after moving them to reduced schedules. At the advertising and communications giant WPP, which has had more than 100,000 employees working from home for months, new business plunged early in the pandemic but has since recovered to early 2020 levels.

WPP and the rest of the country have “seen decades of innovation in a few short months,” said its chief executive, Mark Read.

Live sports, a magnet for advertising, may be on their way back, with the National Basketball Association season scheduled to restart July 30 and the National Hockey League set to return Aug. 1.

Ad space attached to four games that helped usher in the Major League Baseball season on Saturday quickly sold out, according to Fox Sports. More than 60 advertisers, such as Hankook Tire and Bud Light, participated. But that space may be at risk: More than a dozen Miami Marlins players and coaches have tested positive for the coronavirus after this weekend’s games, putting the rest of the shortened season in doubt.

Derek Andersen, the chief financial officer of Snap, warned on a conference call last week that the demand for ads in the third quarter of the year had “historically been bolstered by factors that appear unlikely to materialize in the same way they have in prior years, including the back-to-school season, film release schedules, and the operations of various sports leagues.”

The uncertainty has provided a challenge to an industry that tried to gauge the national mood.

“The consumer psyche and what they wanted to hear and needed to hear from brands would just change week to week,” said Chris Brandt, the chief marketing officer of Chipotle.

Filming restrictions meant that the restaurant chain had to turn to “really scrappy” tactics to produce ads, such as using FaceTime and previously created material. A recent campaign shot on a farm in Idaho cost “a fraction of what a full-blown production would have cost,” Mr. Brandt said.

“This is the new standard,” he said. “I don’t want to go back to every spot being half a million dollars.”

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