Top US stocks to watch: Amazon, Duolingo and Beyond Meat

Amazon celebrates a win in India, Duolingo’s app is removed from stores in China, Beyond Meat delivers record revenue, Didi considers giving up control of its data, Norwegian Cruise sets sail again, ViacomCBS grows subscribers at record rate, and Zynga beats expectations.

USA (1)

Amazon

Amazon is celebrating a major win after India’s top court gave merit to the company’s claims that its partner in the country, Future Group, should not be allowed to sell $3.4 billion worth of assets to rival Reliance Industries.

Amazon and Future are in legal battles over the proposed deal, which Amazon claims violates contracts, which Future denies. An arbitrator in Singapore made an interim decision last year that put the deal on hold after agreeing Amazon’s claims held some merit – a decision that is enforceable in India, according to the Supreme Court.

Arbitration proceedings are still ongoing. Future said there are remedies it can undertake to get the deal over the line, while Amazon welcomed the news and said it hopes it will be able to draw a line under the dispute.

Duolingo

Duolingo has been hit by the overhaul to the private tutoring industry in China after its language-learning app was removed from some app stores in the country.

Duolingo said it was hoping to have the app reinstated and clarified existing users can continue to use the service as usual. Reports suggested Android app stores from Huawei and Tencent were among those to have removed the app. It is thought to still be available on iPhones.

It is not clear what the precise reason is for the removal, but comes after China announced it was banning for-profit organisations for tutoring core subjects as part of an overhaul of the education system designed to cut the costs of raising children to spur on the country’s birth rate. Duolingo only went public last week at $102 per share and trades at $146 before the bell.  

Beyond Meat

Beyond Meat reported record quarterly revenues yesterday and said sales to on-trade had returned to growth after being hit hard by the pandemic, but missed expectations and disappointed with its outlook after warning it was being cautious as the Delta variant spreads.

Revenue rose 32% year-on-year in the second quarter to $149.4 million but its net loss widened to $19.7 million from $10.2 million. On a per share basis, that ballooned to a $0.31 loss from $0.16, coming in larger than the $0.24 loss forecast by Wall Street.

Beyond Meat said it is aiming for third quarter revenue of $120 to $140 million. That would be 27% to 48% higher than the year before but was disappointing compared to the $153.3 million expected by analysts.

Didi

Didi Global is considering giving up control of its most valuable data in the hope it can help resolve the investigation launched by cybersecurity officials in China that has plunged the stock into trouble since listing in the US last month.

Bloomberg reported Didi has put forward several proposals to help allay fears over how it handles data, including handing over management of data to a third party, possibly one that is state controlled. That has prompted questions about how much access Didi would have to its own data.

Officials are thought to be considering multiple routes of action as part of its crackdown. Reports suggest this could vary from a fine to the state becoming the largest shareholder in the business. Some even suggest Didi could be forced to go private and delist from the US.

Norwegian Cruise

Norwegian Cruise said it successfully restarted cruise operations after the Norwegian Jade set sail around the Greek Isles last week, with more ships to start cruising over the coming weeks and months.

Revenue in the second quarter remained negligible as cruises remained suspended, causing its net loss to remain largely in-line with last year at $717.8 million. The first cruise in the US will restart this weekend. Overall, around 40% of its capacity should be in operation by the end of the third quarter and that should rise to 75% by the end of the year.

Norwegian Cruise said bookings continue to be strong and that 2022 looks ‘very positive’ in terms of demand and pricing. ‘The company is experiencing robust future demand across all brands with the overall cumulative booked position for full year 2022 meaningfully ahead of 2019’s record levels at higher pricing even when including the dilutive impact of future cruise credits,’ the company said.

ViacomCBS

ViacomCBS acquired more subscribers in the second quarter than ever before and delivered a bump in earnings as it revealed its Paramount+ streaming service is heading to Europe.

The company said it added 6.5 million subscribers to end the quarter with 42 million in total. That drove an 82% rise in streaming subscription revenue and a doubling in advertising streaming revenue. Subscriber growth was driven by the diverse content offered by Paramount+ while advertising growth was spurred on by Pluto TV.

Overall revenue growth came in at 8% to $6.56 billion, ahead of the $6.48 billion expected by analysts. Net earnings per share more than doubled to $1.50 from $0.73. It also announced that Paramount+ will be expanding into numerous European countries thanks to a new partnership with Sky.

Virgin Galactic

Virgin Galactic released quarterly results yesterday and said it was reopening sales of commercial space flights to the public starting at $450,000 per seat after successfully completing its fourth spaceflight, including the first fully-crewed one last month. 

The company booked a net loss of $94 million in the second quarter compared to a $72 million loss the year before and ended June with $552 million in cash.

Apple

Apple said it will start checking photos on iPhones in the US when they are uploaded to its iCloud storage system to identify potential images of child sex abuse.

The automated system will flag potential images that will then be checked by a human, who will then decide if further action is needed such as alerting authorities.

The move will please authorities that have previously butted heads with the company over access to information on potential criminals, but also sparks a debate about privacy. However, other major firms like Alphabet, Facebook and Microsoft already have similar systems in place.

Johnson & Johnson

Johnson & Johnson has filed an application to get emergency use approval for its coronavirus single-shot vaccine in India, according to an emailed statement sent to Reuters.

J&J is in talks about accelerating delivery of jabs to India, which will be delivered through a supply deal signed with local vaccine manufacturer Biological E.

If approved, J&J’s jab would join the approved list of vaccines alongside AstraZeneca, Bharat Biotech, the Gamaleya Institute and Moderna.

AngloGold Ashanti

AngloGold Ashanti reported lower earnings in the second quarter after the pandemic and other operational problems significantly pushed up the cost of production.

Headline earnings dropped to $363 million from $404 million the year before. That was the result of production falling to 1.2 million ounces from 1.3 million and all-in cash costs rising to $1,333 per ounce from $1,003 the year before.

It said it lost 42,000 ounces of output due to the pandemic in the first half and revised its guidance for the full year down to produce between 2.45 and 2.60 million ounces at a total cash cost of $1,240 to $1,340 an ounce to remove the contribution from Obuasi in the second half.

Corteva

Corteva launched a new buyback and raised its dividend after delivering growth in the first half, prompting it to raise its guidance for the rest of the year.

Net sales grew 7% in the first half to $5.6 billion and operating Ebitda rose 18% to $1.46 billion. Crop Protection sales rose 12% and Seed sales increased 5%. Corteva also raised its dividend by 7.7% and launched a new $1.5 billion buyback, building on the $550 million worth of stock bought back during the first half.

Corteva said it is now expecting net sales of $15.2 to $15.4 billion this year and operating Ebitda of $2.5 to $2.6 billion. It was previously targeting revenue of $14.6 to $14.8 billion.

Zynga

Mobile game developer Zynga said it performed much better than expected in the latest quarter as it revealed it has agreed to buy rival StarLark.

Revenue rose to $720 million in the second quarter from $452 million the year before, coming in ahead of the $675 million guided by the company. Net income of $28 million turned from a $150 million loss the year before and was also better than the $30 million loss forecast by Zynga. Bookings jumped 37% in the period to $712 million.

Zynga also announced it has completed its acquisition of mobile advertising platform Chartboost for $250 million and has agreed to buy mobile game developer StarLark, the firm that brought us the game franchise Golf Rival, for $525 million. It also said that Rollic, its subsidiary driving its portfolio of hyper-casual games, had surpassed the 1 billion download mark.

Robinhood

Robinhood shares are set to continue their wild ride today, after the brief rally in the stock came to an abrupt end yesterday as the stock sank over 27% to close at $50.97.

That is still a sizeable gain from its $38 IPO price, but down from its high of over $84. The fall yesterday was sparked by news that a number of investors that supplied convertible debt before its IPO now had the option to cash-out of around 98 million shares. Reports from Bloomberg suggest the debt converted into equity at the time of listing for $26.60 a share, demonstrating the bumper gains the investors have made.

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