Wall Street’s main stock indexes slipped as a surprise increase in weekly jobless applications raised concern about a slow recovery in the economy.
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Specifically, US Labor Department data showed that first-time claims for state unemployment benefits jumped by 13,000 to a seasonally adjusted 861,000 during the week ended Feb. 13. Economists polled by Reuters had expected 765,000 applications in the reported week. Additionally, data for the prior week was revised upwards to show 55,000 more applications were filed than previously reported.
The tech-heavy Nasdaq Composite Index fell 0.8% and the S&P 500 Index declined 0.5%. The Dow Jones Industrial Average depreciated 0.4%.
In earnings news, shares of Twilio spiked more than 7% after the cloud communications platform surprised investors with posting a profit in the fourth quarter. The company reported non-GAAP diluted EPS of $0.04 in 4Q, while analysts were expecting a loss of $0.08 per share. Revenues came in at $548.1 million, up by 65% year-on-year, and beating consensus estimates of $454.7 million. “TWLO announced that it expects to sustain 30% y/y organic growth for the next 4 years – which we view as achievable with CPaaS [cloud communications platform) remaining at the forefront of a global shift to digitalization,” commented Rosenblatt Securities analyst Ryan Koontz, who has a Buy rating on the stock.
Shares of Vonage Holdings tanked 14% as the cloud communications company’s earnings in the fourth quarter lagged analysts’ estimates. Additionally, the company pulled out of an anticipated plan to divest its consumer business segment. The company’s 4Q adjusted earnings per share (EPS) of $0.02 fell short of analysts’ estimates of $0.05. Meanwhile, revenues rose 4.2% to $323 million year-on-year and came in ahead of the Street consensus of $316.2 million. Vonage CEO Rory Read said, “we have completed a thorough review of the Consumer business and we have decided to retain this business. Our decision was driven by valuation, the $600 million of cash generation we expect from Consumer over the next five years, and what is best for our company and shareholders.”
In telecoms news, Nokia Corp. nabbed a multi-year contract by A1 Austria to provide 5G network coverage across the country. Financial terms of the deal weren’t disclosed. Under the terms of the contract, Nokia will supply 5G radio access and core network services. The companies expect to launch the 5G core element in the first half of this year. Nokia will provide its AirScale portfolio which includes 5G RAN, AirScale base stations and Nokia AirScale radio access products to A1 Austria. Following a successful pilot, A1 Austria will launch 4G and 5G network slicing commercially.
Cannabis producer Tilray’s fourth-quarter loss narrowed to $0.02 per share from a loss of $2.14 during the same period last year. Analysts were expecting a loss per share of $0.15. Revenues came in at $56.6 million, up by 20.5% year-on-year and ahead of consensus estimates of $55.7 million. Tilray CEO, Brendan Kennedy, said, “Over the course of 2020, and despite COVID-19 related challenges, we transformed and strengthened Tilray, delivered solid full year results, significantly reduced net loss, and achieved our stated goal of delivering break even or positive Adjusted EBITDA in Q4 2020.” Shares rose about 1% after rallying 11% in pre-market trading.
In healthcare news, Rigel Pharmaceuticals popped 12% after inking an exclusive $960 million collaboration with Eli Lilly to develop and commercialize receptor interacting serine/threonine protein kinase 1 (RIPK1) inhibitors for the treatment of immunological and neurodegenerative diseases. The partnership includes an upfront payment of $125 million to Rigel and development, regulatory and sales milestone payments of up to $835 million from Lilly. Rigel is also entitled to royalty payments varying from mid single digits to high teens dependent on its investment in clinical development.
Last, but not least, Palantir Technologies dropped almost 8% in what appeared to be some profit-taking as a chunk of the data software company’s shares became available for sale after a locktime period. Separately, Palantir teamed up with Akin Gump Strauss Hauer & Feld LLP to introduce a new legal digital service platform. Financial terms of the collaboration were not disclosed. The platform, Akin Gump’s RegSpot, will be powered by Palantir’s foundry software and allow Akin Gump’s clients to access solutions to meet their legal needs and deal with compliance processes.
