Finance

A logo of the Exxon Mobil Corp is seen at the Rio Oil and Gas Expo and Conference in Rio de Janeiro, Brazil September 24, 2018.
Sergio Moraes | Reuters

Exxon said Friday that its third-quarter profit was the highest in years as improving demand, higher commodity prices and streamlined operations boosted results.
The company earned $1.58 per share during the period on an adjusted basis, which was ahead of the $1.56 analysts surveyed by Refinitiv were expecting. Revenue totaled $73.79 billion, short of the $76.34 billion the Street was expecting.

“All three of our core businesses generated positive earnings during the quarter, with strong operations and cost control, as well as increased realizations and improved demand for fuels,” Darren Woods, Exxon’s chairman and CEO, said in a statement.
The $1.58 in EPS is the biggest adjusted quarterly profit since 2014, according to FactSet.
Exxon said its cash flow from operating activities reached $12.1 billion, funding capital investments, debt reduction and the company’s dividend. Earlier this week the company announced its first divided hike in more than two years.
The oil giant said Friday that starting in 2022 it plans to begin a share repurchase program of up to $10 billion over the following 12 to 24 months.
As Exxon and the energy industry more broadly recovered from the pandemic and the demand destruction it brought, shareholders have demanded capital discipline. Exxon has implemented aggressive cost-cutting measures, and the company expects its 2021 capital program to come in near the low end of the $16 billion to $19 billion range it previously outlined.

The company’s third-quarter results also speaks to Exxon’s ongoing recovery following the pandemic. During the second quarter the company earned $1.10 per share on revenue of $67.74 billion.
Exxon’s revenue jumped nearly 60% year over year. In the third quarter of 2020 Exxon lost 18 cents per share on an adjusted basis while generating $46.2 billion in revenue.
During the latest quarter Exxon spent $3.9 billion on capital and exploration productions, with oil-equivalent production standing at 3.7 million barrels per day.
Shares of Exxon advanced 1% during premarket trading on Friday. For the year the stock is up 56%, more or less matching the S&P energy sector’s 53% return.

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Check out the companies making headlines before the bell:
Chevron (CVX) – Chevron gained 2.1% in the premarket after posting its highest quarterly profit in 8 years amid surging energy prices. Chevron earned an adjusted $2.96 per share for the third quarter, beating the $2.21 consensus estimate, with revenue also beating Wall Street forecasts.

Exxon Mobil (XOM) – Exxon exceeded estimates by 2 cents with adjusted quarterly earnings of $1.58 per share, though revenue came in below analyst forecasts. Exxon was helped by stronger demand and higher prices, among other factors, and its profit was its highest in four years. Exxon added 1.5% in premarket trading.
Newell Brands (NWL) – The company behind consumer product brands like Rubbermaid, Sunbeam and Sharpie earned an adjusted 54 cents per share for the third quarter, 4 cents above estimates, with revenue slightly above forecasts. It also raised its full-year outlook despite supply chain and inflation issues, and its stock added 2% in premarket action.
Colgate-Palmolive (CL) – The personal care products company beat estimates by 2 cents with adjusted quarterly earnings of 81 cents per share and revenue also beating analyst predictions. Like many other companies, Colgate said it faced higher costs for raw materials and logistics.
Momentive Global (MNTV) – The parent of SurveyMonkey agreed to be bought by customer service platform operator Zendesk (ZEN) for $4.13 billion in stock. Zendesk tumbled 18.5% in the premarket, while Momentive Global lost 5.7%.
Apple (AAPL) – Apple matched estimates with quarterly earnings of $1.24 per share, but revenue fell below analyst forecasts for the first time since 2016. Supply chain issues impacted the production of iPhones and other Apple products, and the stock fell 3.6% in the premarket.

Amazon.com (AMZN) – Amazon earned $6.12 per share for the third quarter, well below the $8.92 consensus estimate, with revenue also falling below forecasts. Like Apple, Amazon cited supply chain issues and also pointed to labor shortages, and Amazon shares slid 4.5% in premarket trading.
Starbucks (SBUX) – Starbucks beat estimates by a penny with an adjusted quarterly profit of $1.00 per share, but the coffee chain’s revenue and global comparable-store sales fell short of Wall Street forecasts. Starbucks saw a particularly negative impact on its results from a resurgence of Covid-19 in the key China market. Starbucks slumped 5.2% in premarket action.
Gilead Sciences (GILD) – Gilead earned an adjusted $2.65 per share for its latest quarter, surpassing the $1.75 consensus estimate, while the drugmaker’s revenue exceeded forecasts by a comfortable margin. Gilead saw strong demand for its antiviral Covid-19 treatment remdesivir, but said full-year sales of its non-Covid drugs won’t reach earlier estimates and its stock lost 1.7% in the premarket.
U.S. Steel (X) – U.S. Steel surged 9.2% in premarket trading after it reported an adjusted quarterly profit of $5.36 per share, compared with a $4.85 consensus estimate. Revenue also came in above analyst projections as steel shipments surged, while U.S. Steel also raised its quarterly dividend to 5 cents per share from 1 cent, and announced a $300 million stock buyback.
Western Digital (WDC) – The disk drive maker tumbled 11.2% in premarket trading after the company provided weaker-than-expected current-quarter financial guidance. Western Digital, like other tech companies, is being hit by supply chain issues, although it did beat estimates by 4 cents with an adjusted quarterly profit of $2.49 per share.

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A sign is posted in front of a Chevron gas station on July 31, 2020 in Novato, California.
Justin Sullivan | Getty Images

Chevron said Friday that it generated the highest free cash flow on record during the third quarter as surging commodities prices and lower operational costs boosted operations.
The oil giant beat top- and bottom-line estimates for the period, earning $2.96 per share on an adjusted basis. Revenue jumped more than 80% year over year to $44.71 billion.

Wall Street analysts were expecting the company to earn $2.21 per share on sales of $40.52 billion, according to estimates from Refinitiv.
“Third quarter earnings were the highest since first quarter 2013 largely due to improved market conditions, strong operational performance and a lower cost structure,” Mike Wirth, Chevron’s chairman and CEO, said in a statement.
Chevron paid $2.6 billion in dividends during the period, repurchased $625 million worth of stock, and reduced debt by $5.6 billion.
Friday’s results mark an ongoing turnaround for Chevron and energy companies more broadly, after the pandemic and worldwide economic shutdown sapped demand for petroleum products.
During the second quarter of 2021 the oil giant earned $1.71 per share on an adjusted basis, with revenue coming in at $37.6 billion. Chevron reported a loss of $207 million during the third quarter of 2020 and posted sales of $24.45 billion.

Chevron said it continues to exercise capital discipline, and 2021 spending is down 22% year over year.
The company’s upstream operations brought in $5.135 billion during the most recent quarter as oil and gas prices rebounded from their pandemic lows. In the same period last year the unit brought in just $235 million.
Chevron’s net oil-equivalent production rose 7% year over year to 3.03 million barrels per day.
During the third quarter the company’s average sales price per barrel of crude oil and natural gas liquids for U.S. operations jumped nearly 90% year over year to $58. The average sales price for natural gas surged to $3.25 per thousand cubic feet, up from 89 cents last year. The average per barrel price for international operations was $68, up from $39 in 2020.
Shares of Chevron jumped 2% during premarket trading on Friday. For the year, the stock is up 34% through Thursday’s close, lagging the S&P 500 energy sector’s 53% gain.
Exxon will report results later on Friday. The company is expected to earn $1.56 per share on $76.34 billion in revenue, according to estimates from Refinitiv. Last quarter the company earned $1.10 per share on revenue of $67.74 billion.
During the third quarter of 2020 Exxon lost 18 cents per share on an adjusted basis while generating $46.2 billion in revenue.

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Alibaba ranks among the top three e-commerce platforms in Europe, according to Euromonitor International.
The company is keen to tap a wave of growth in online shopping there, especially for the upcoming Singles Day festival on Nov. 11.
Logistics arm Cainiao plans to install a total of 5,000 package lockers globally before Singles Day, especially in Russia, Poland, Spain and France.
Spain, Russia and Brazil are among the core countries for overseas unit AliExpress’ expansion, Li Dawei, head of AliExpress Supply Chain, told CNBC earlier this month.

Employees pack crates with merchandise for orders at a Cainiao warehouse, the logistics subsidiary of Alibaba Group Holding, ahead of the company’s annual Singles’ Day shopping extravaganza in Wuxi, Jiangsu province, China, on Nov. 9, 2020.
Qilai Shen | Bloomberg | Getty Images

BEIJING — Alibaba is investing further in Europe for Singles Day this year, as the Chinese tech giant competes with Amazon for the European Union’s exploding e-commerce market.
Alibaba remained among the top three online sellers of consumer goods in eastern Europe last year, according to Euromonitor International. Amazon wasn’t on the top 10 list for the region, which includes countries like Poland and the Czech Republic.

Amazon is by far the top seller in western Europe, which includes France and Spain, according to Euromonitor. But the U.S. e-commerce giant’s market share in the region did not grow during the pandemic, remaining at about 19.3% in 2020.
In contrast, Alibaba’s market share increased to 2.9% in 2020, up from 2% the prior year, the data showed.

Alibaba held first place in eastern Europe e-commerce in 2019, according to Euromonitor International. But Polish online shopping site Allegro took first place in 2020 during the pandemic, while Russian rival Wildberries took second, according to the data. That pushed Alibaba down to third place last year.
The competition for Europe comes as online shopping in the region got another lift this year. Stay-home policies and other social distancing measures have remained in place for many months amid a prolonged fight to control multiple waves of Covid-19 outbreaks.
“It’s time for the next stage of e-commerce growth in Europe,” NielsenIQ said in a report in June.

For “fast-moving consumer goods” — a category that includes food, beverages, personal care and home care — the report said e-commerce sales growth doubled in Italy and Spain in the first quarter of this year, compared with the same period in 2020. Updated figures weren’t available as of the publication of this article.

Alibaba prepares for Singles Day — in Europe

Alibaba is keen to ride that wave of growth. Different business units have announced expansion into Europe in the weeks leading up to the Singles Day shopping festival.
The shopping event, spearheaded by Alibaba in China, is similar to Black Friday in the U.S. or Amazon’s Prime Day. Singles Day is also known as “Double 11″ since it falls on the 11th day of the 11th month of the year — Nov. 11.
In recent years, Alibaba has promoted the shopping festival overseas through its own e-commerce website for selling to consumers outside of China, called AliExpress. The platform mostly connects Chinese sellers with overseas buyers, allowing foreign businesses and consumers to buy directly from factories in China.

Double 11 is going to be a great way for a lot of these companies as they start to grow. It’s a great way for you to go acquire customers.

Jonathan Cheng
partner, Bain & Company

Spain, Russia and Brazil are among the core countries for AliExpress’ overseas expansion, Li Dawei, head of AliExpress Supply Chain, told CNBC in a Mandarin phone interview earlier this month.
Alibaba founder Jack Ma is reportedly traveling in Europe this month to study local agricultural practices and technology, in his first trip away from greater China in more than a year. The company referred CNBC to the Jack Ma Foundation, which did not immediately respond to a request for comment.

Subsidizing delivery costs

AliExpress plans to double its subsidies for international logistics support this Singles Day from last year. That’s a slowdown in pace from the company’s claims last year that it spent five times as much on subsidies as it did in 2019.
AliExpress claimed, during a period of global shipping congestion, that it did not raise costs for customers and hasn’t seen any major delivery delays because of its reliance on charter flights. Most goods sold through AliExpress are also small consumer products and don’t need to be transported by ship.
For Singles Day, AliExpress said weekly overseas charter flights will increase to 100 a week from Nov. 11 and 30, up from 80 a week.

Alibaba’s logistics arm Cainiao launched package lockers in major cities in Spain and France in September 2021. Ahead of Nov. 11, on Singles Day, Alibaba sped up its investment in package lockers, which allow couriers to deliver many packages to one neighborhood’s residents at once.

Once the packages leave China, they can be distributed at logistics arm Cainiao’s sorting centers, six in Europe and one in Russia, according to the company.
The shopping festival has also sped up investment in package lockers, which allow couriers to deliver many packages to one neighborhood’s residents at once.
In early September, Cainiao announced it had installed a network of 170 lockers in Madrid and Barcelona in Spain, and more than 80 in Paris, France. The logistics unit said it planned to install a total of 5,000 lockers globally before Singles Day, especially in Russia, Poland, Spain and France.
Cainiao and international commerce retail revenue both grew by at least 50% in the quarter that ended June 30 compared to a year ago, with the business segments each accounting for about 5% of Alibaba’s overall revenue.

Building up local customers

Not only does AliExpress want to sell to consumers in Europe, it also wants local merchants to sign onto its platform, where they can take advantage of subsidies, said Li, the head of AliExpress Supply Chain.
However, he said many businesses prefer to work with multiple e-commerce sites, instead of just with AliExpress alone.
Small and medium-sized merchants would also like to build their own brands on those platforms and on their own websites, Li said, noting that in those cases, AliExpress plays more of third-party role by selling logistics and store management services.

Read more about China from CNBC Pro

“In general I think there’s lots of learning from China in terms of, how do you think about e-commerce,” Jonathan Cheng, partner at Bain & Company and leader of the firm’s Greater China Retail practice, said on a call with reporters Wednesday. “We would argue that China’s absolutely at the forefront in terms of customer operations, and in marketing and in effectiveness and all that.”
“Double 11 is going to be a great way for a lot of these companies as they start to grow. It’s a great way for you to go acquire customers,” Cheng said, declining to comment specifically on Europe. “Amazon basically did a very similar thing.”
But he noted that after years of rapid growth in the number of customers, companies will need to think about how to retain users and earn profits.
— CNBC’s Saheli Roy Choudhury contributed to the report.

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“DOWN THE rabbit hole”, were the words on our cover on decentralised finance in September. To illustrate it Justin Metz, a visual artist, looked to the first edition of “Alice in Wonderland” for inspiration. On 25th October we put a non-fungible token (NFT) of that cover up for sale. A little over a day later, after a late flurry of bids, it sold for 99.9 ether (around $420,000).Listen to this storyYour browser does not support the element.Enjoy more audio and podcasts on More

Stock futures dipped in overnight trading Thursday as shares of major technology companies suffered following disappointing earnings reports.
S&P 500 futures fell 0.3% and Nasdaq 100 futures traded 0.6% lower. Futures on the Dow Jones Industrial Average were flat.

Amazon shares dropped more than 3% in extended trading after the e-commerce giant badly missed earnings and revenue expectations for the third quarter. The company also issued disappointing guidance for the critical holiday period.
Apple stock fell 4% after the tech giant’s quarterly revenue fell short of expectations amid larger-than-expected supply constraints on iPhones, iPads and Macs.   
The overnight action came after the S&P 500 and the tech-heavy Nasdaq Composite closed Thursday’s session at record highs as investors shrugged off disappointing economic data.
The U.S. economy grew at a 2% annualized pace in the third quarter, its slowest increase since the end of the 2020 recession and missing expectations of 2.8% growth.

Stock picks and investing trends from CNBC Pro:

“GDP told us what we already knew, the economy slowed down considerably in the third quarter,” said Ryan Detrick, chief market strategist at LPL Financial. “The good news is we see the next few quarters more than making up for the slowdown, as COVID trends continue to improve.”

The stock market has been raking in records amid solid earnings. About half of the S&P 500 have reported quarterly results and more than 80% of them beat earnings estimates from Wall Street analysts. S&P 500 companies are expected to grow profit by 38.6% year over year.
All three major averages are on track to post a winning week, their fourth positive week in a row. Month to date, the S&P 500 is up 6.7%, on pace for its best monthly performance since November 2020. The blue-chip Dow has gained 5.6% in October, while the Nasdaq has rallied 6.9%.

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President Joe Biden issued a $1.75 trillion social and climate spending plan on Thursday. About $1 trillion would be financed by higher taxes on wealthy Americans.
The Build Back Better proposal would levy a tax surcharge on Americans who earn more than $10 million, invest in more IRS enforcement and raise taxes for some business owners.
It’s unclear whether the plan has the full backing of Democrats in the House and Senate.

President Joe Biden delivers remarks on his proposed Build Back Better social spending bill in the White House on Oct. 28, 2021
Chip Somodevilla | Getty Images News | Getty Images

The White House issued a framework for a $1.75 trillion social and climate spending bill on Thursday — and would finance more than half of it from tax reforms aimed at wealthy Americans.
The plan would raise revenue by levying a tax surcharge on those making more than $10 million a year, raising taxes for some high-income business owners and strengthening IRS tax enforcement, according to the outline.

The framework was the product of several months of negotiations between moderate and progressive Democrats. Together, proposals targeting wealthy taxpayers would raise about $1 trillion of the nearly $2 trillion of total revenue being raised. (The rest would come from new taxes on corporations and stock buybacks, for example.)
President Joe Biden said the legislation was fully paid for and would help reduce the federal budget deficit.
More from Personal Finance:Enhanced child tax credit will continue for 1 more yearFamily caregivers may have to choose between jobs an at-home dutiesMiddle-class Americans face retirement insecurity
“I don’t want to punish anyone’s success; I’m a capitalist,” President Biden said in a speech Thursday. “All I’m asking is, pay your fair share.”
Biden reiterated that households earning less than $400,000 a year wouldn’t “pay a penny more” in federal taxes and would likely get a tax cut from the proposal, via elements like the enhanced child tax credit, and reduced costs on child care and health care.

The framework omits specifics beyond high-level detail. But it seems to abandon many tax proposals issued last month by the House Ways and Means Committee, even while the overarching policy goal of targeting the wealthy is the same.
For example, the framework doesn’t raise the current top 37% income tax rate or 20% top rate on investment income (with the exception of multimillionaires subject to the proposed surtax). It also wouldn’t impose new required distributions from big retirement accounts or alter rules around estate taxes and trusts, for example.

“It’s far slimmed down,” said Kyle Pomerleau, a senior fellow at the American Enterprise Institute, a right-leaning think tank. “It forgoes a lot of things they’d proposed in the House bill.”
Of course, the proposal needs near-unanimous backing from Democrats in the House and Senate, given their razor-thin majorities, and it’s unclear whether it has the party’s full support.
Here are some of the major provisions in the Build Back Better framework.

Millionaire and billionaire surtax

The plan would impose a new surcharge on the top 0.02% of Americans, according to the White House.
There would be a 5% surtax on modified adjusted gross income of more than $10 million, and an additional 3% (or, a total 8% surtax) on income of more than $25 million, according to a summary of provisions released Thursday.
The surtax is estimated to raise $230 billion over 10 years. It would kick in after Dec. 31.
“This is one of the main provisions in here that directly taxes the wealthy,” said Garrett Watson, senior policy analyst at the Tax Foundation.
It would affect a much larger number of people than another tax floated by Senate Democrats earlier this week on the wealth of billionaires. That tax would have affected about 700 people. There were 22,112 tax returns reporting income of more than $10 million in 2018, according to most recent IRS data.

Essentially, an 8% surtax would mean the highest earners pay a top 45% federal marginal income tax rate on wages and business income. (They currently pay 37%.)
They’d also pay a top 28% top federal rate on long-term capital gains and dividends, plus the existing 3.8% net investment income tax on high earners. (Taxes on long-term capital gains apply to growth on stocks and other assets sold after one year of ownership. The top tax rate is currently 20%.)
That the tax applies to “modified adjusted gross income” and not “taxable income” is significant, Watson said.
That’s because the AGI measure reflects income before it’s reduced by charitable contributions and other tax breaks — meaning the surtax would encompass more taxpayers.
apply to taxable years beginning after December 31, 2021

IRS enforcement

SOPA Images | LightRocket | Getty Images

Democrats’ plan would give $79 billion in new funding to the IRS to help close the so-called tax gap.
The top 1% evade more than $160 billion per year in taxes, according to the White House.
Relative to other taxpayers, they get a bigger share of income from opaque sources, such as certain business arrangements that aren’t as readily subject to tax reporting or withholding, according to Watson.
The IRS would hire enforcement agents trained to pursue wealthy tax evaders, overhaul 1960s-era technology and invest in taxpayer services to help ordinary Americans, according to the White House.
It estimates these measures would raise $400 billion over 10 years — the single-biggest revenue raiser in the proposal.
However, some question how lawmakers arrived at that revenue figure. The Treasury Department estimated last month that an $80 billion IRS investment would generate $320 billion in revenue over a decade.

Business income

There are two provisions in the Build Back Better framework related to business income.
One would apply a 3.8% Medicare surtax to all income from pass-through businesses and another would limit a tax break on business losses for the wealthy.
The reforms would raise $250 billion and $170 billion, respectively, over a decade, according to estimates.

Currently, the owners of most pass-through businesses are subject to a 3.8% self-employment tax or net investment income tax. (Such businesses, like sole proprietorships and partnerships, pass their earnings to owners’ individual tax returns.)
However, some profits (namely, those of S corporations) aren’t subject to the 3.8% net investment income tax, which was created by the Affordable Care Act to fund Medicare expansion. The proposal would close this loophole for wealthy business owners.
It would apply to single taxpayers with more than $400,000 in taxable income or married couples filing a joint return with more than $500,000 in taxable income.
The second proposal is also somewhat vague on business losses. But the House tax proposal last month, which contained a similar measure, may offer a clue; it would permanently disallow excess business losses (meaning, net tax deductions that exceed their business income).
This applies to businesses that aren’t structured as a corporation.
Both provisions would kick in after Dec. 31.
This is a developing story. Check back for updates.

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Amazon’s Shannon Building in Dublin.
Artur Widak | NurPhoto | Getty Images

Check out the companies making headlines after the bell: 
Amazon — Shares of the e-commerce giant dropped more than 4% in extended trading on Thursday after a disappointing quarterly earnings report. Amazon posted an EPS of $6.12 for the third quarter, badly missing the $8.92 estimate per Refinitiv. The company also issued disappointing guidance for the critical holiday period.

Starbucks — The coffee chain saw its shares falling over 2% in after-hours trading after a quarterly revenue miss. Starbucks posted quarterly revenue of $8.1 billion in the third quarter, falling short of a Refinitiv expectation of $8.21 billion as Covid-19 resurgences in China weakened sales.
Apple — The tech giant’s stock dropped more than 4% in extended trading after the company’s revenue fell short of Wall Street expectations in its fiscal fourth quarter, which CEO Tim Cook attributed to larger-than-expected supply constraints. Its earnings per share matched Street’s estimates.
United States Steel — Shares of the steel producer jumped more than 6% after the company announced a $300 million stock repurchase program. United States Steel also increased its quarterly dividend to $0.05 per share.
Gilead Sciences — The biotech stock fell about 2% in extended trading even after the company better-than-expected third-quarter earnings. Gilead reported adjusted quarterly earnings of $2.65 per share, beating Wall Street estimates of $1.75 per share, according to Refinitiv. The strong demand for its Covid-19 antiviral treatment, Veklury, offset decreasing sales of its HIV drugs, the company said.

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