Question
An article in the Wall Street Journal discusses the rebound of the automobile industry. Always look for STRATEGIC CONTENT. Please think about and come up
An article in the Wall Street Journal discusses the rebound of the automobile industry. Always look for STRATEGIC CONTENT. Please think about and come up with a reasonable response to one of these related issues:
(Reasonable means you search the Wall Street Journal for relevant comments.)
Companies Fret Over Coronavirus Despite Rebound; Results from auto makers to cereal producers are better than expected, but firms remain hesitant about the future. 'The world is in a fragile state.'
Maidenberg, Micah.Wall Street Journal (Online); New York, N.Y.[New York, N.Y]01 Nov
Business for manycompaniesrebounded faster than expected following thecoronavirus-related economic shock this spring, but many corporate leaders are warning that the bounceback wasn't uniform and may prove fleeting as infections surge again .
Stronger demand buoyedcompaniesranging from auto makers to cereal producers during the quarter that ended in September as businesses and consumers adapted to the disruptions caused by thecoronavirus. Yet executives described the path forward as tenuous, with caseloads hitting records in the U.S. and government officials in Europe and elsewhere imposing limits on some activities.
"It is not a straight-line recovery around the world," Coca-Cola Co. Chief Executive James Quincey told investors last month after the beverage giant said
quarterly revenue fell 9% , more moderate than the 28% decline in the prior period. "It's important to remember the world is in a fragile state."
Evencompaniesthat have benefited from shifting customer behavior during the pandemic, like Apple Inc., have sounded cautionary notes. Thecompanyon Thursday declined to offer a revenue forecast for its current quarter , disappointing investors. Luca Maestri, Apple's chief financial officer, cited "the continued uncertainty around the world in the near term."
Othercompanieshave announced fresh rounds of job reductions as the pandemic continued to drag down their end markets. Exxon Mobil Corp. plans to cut up to 15% of its global workforce , including 1,900 positions in the U.S.,overthe next year. Boeing Co. said last week that it expects to reduce its head count by another 11,000 employees , including 7,000 layoffs, on top of the almost 20,000 already announced.
"Thecoronavirusremains a central problem," said Frank Witter, finance chief at Volkswagen AG, as the world's largest car maker by sales reported a third-quarter profit of 2.6 billion, equivalent to $3 billion, compared with a loss in the previous quarter.
The cautious tone from executives comes after manycompaniesreported better-than-expected quarters. Of the 64% ofcompaniesin the S&P 500 index that had given results as of Friday, more than 80% have posted revenue and per-share earnings above analyst estimates, according to FactSet, on track to be the highest such levels since thecompanystarted tracking those metrics in 2008. Overall, though, revenue and earnings for the quarter are still expected to decline yearoveryear, but by a smaller percentage than the June quarter and what was expected by analysts a month ago.
Helpingcompanieswas a strongreboundin gross-domestic product in the U.S. and across the eurozone during the third quarter; however, economic forecasters and government officials believe economies in both regions will likely lose steam as the year ends. The International Monetary Fund expects China will be the only major economy to grow this year overall.
Diverging outlooks for growth across global markets is making it difficult forcompaniesto forecast the end of the year, executives said. Samsung Electronics Co., which reported a 49% increase in quarterly profit for the third quarter, said its television business faces fresh challenges in the fourth quarter due to the spread of thecoronavirusin markets such as the U.S. and Europe.
"Some of these countries may go back into lockdown," Kim Won-hee, vice president of Samsung's visual-display business, told investors. "This may lead to economic contraction globally on a long-term basis."
Techcompanieshave been among the biggest winners as more people spend more time working and socializing at home, and as businesses invest in digital tools to adapt to the trend. For the latest quarter, Apple, Amazon.com Inc., Google parent Alphabet Inc., Facebook Inc. and Microsoft Corp. collectively generated 18% more revenue than in the year-earlier period.
But those giants are also having trouble laying out how 2020 will wrap up and what next year might bring. Amazon finance chief Brian Olsavsky said thecompanygenerally faces issues tied to the holidays, such as spending levels, and noted it saw some disruption during the election four years ago. But thecoronavirusremains the major issue Amazon is trying to navigate.
"I think the fact that Covid is dwarfing all of those is causing us a lot of uncertainty on our top-line range," he said Thursday after thecompanysaid revenue shot up 37% for the third quarter to $96.2 billion and profit almost tripled. Thecompanyforecast $112 billion to $121 billion in sales for the current quarter.
Facebook operations chief Sheryl Sandberg said the next few quarters will continue to be precarious for many businesses. The social-mediacompanyalso said its own performance next year is uncertain , citing potential changes in demand for advertising related to online commerce.
Executives say they are focusing on controlling the variables they can by using the pandemic to position theircompaniesfor the long term. That includes Kellogg Co., thecompanybehind cereals such as Corn Flakes, which has benefited as consumers buy more food to eat at home.
"We believe that this crisis, as terrible as it's been, has given us an opportunity to really engage with consumers in meaningful and lasting ways and to make those investments to emerge stronger," Kellogg Chief Executive Steve Cahillane said. Thecompanyon Thursday raised its comparable-sales forecast for 2020.
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