Amazon, Apple, Exxon, AbbVie and Gilead - 5 Things You Must Know Friday

Stock futures fall sharply after Apple and Amazon warn of uncertainties from the coronavirus pandemic; Exxon and Chevron report earnings; Gilead could spend $1 billion on its coronavirus drug.
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Here are five things you must know for Friday, May 1:

1. -- Stock Futures Slide on Coronavirus Uncertainties

Stock futures fell sharply Friday after comments from Apple  (AAPL) - Get Report and Amazon.com  (AMZN) - Get Report about the coronavirus pandemic's impact on their operations were tinged with uncertainty.

Sentiment also took a hit Friday from President Donald Trump's suggestion he could use new tariffs on China over its handling of the coronavirus pandemic. 

The Washington Post reported that senior U.S. officials have begun  exploring proposals for punishing or demanding financial compensation from Beijing.

Contracts linked to the Dow Jones Industrial Average dropped 500 points, futures for the S&P 500 slumped 63 points and Nasdaq futures declined 236 points.

Stocks in the U.S. finished lower Thursday after millions more Americans applied for unemployment benefits last week, bringing the jobless numbers to more than 30 million in just six weeks. Even with Thursday's losses, however, the S&P 500 rose almost 13% in April, the index's best month since 1987.

The economic calendar Friday includes the PMI Manfacturing Index for April at 9:45 a.m. ET, the ISM Manufacturing Index for April at 10 a.m. and Construction Spending for March at 10 a.m.

2. -- Apple Won't Provide Current-Quarter Guidance

Apple  (AAPL) - Get Report was falling in premarket trading Friday after the iPhone maker reported fiscal second-quarter profit that beat analysts' estimates but declined to give a forecast for the current quarter because of coronavirus uncertainty.

Apple said it would boost its buyback program by $50 billion and lift its dividend by 6% to 82 cents a share.

The stock fell 3.05% in premarket trading Friday to $284.84.

Apple Breaks Down Three Phases of COVID-19 Impact, Hinting at What's to Come

Earnings in the quarter were $2.55 a share vs. $2.46 a share a year earlier. Analysts expected $2.29 a share. Revenue rose to $58.31 billion from $58.02 billion and beat analysts' forecasts of $54.78 billion.

“Despite Covid-19’s unprecedented global impact, we’re proud to report that Apple grew for the quarter, driven by an all-time record in services and a quarterly record for wearables,” said CEO Tim Cook.

Apple said iPhone sales fell $28.96 billion from $31.05 billion a year earlier but beat forecasts of $28.39 billion. 

The company's services business saw revenue of $13.35 billion, ahead of expectations of $12.85 billion.

"Bottom line, while management may not have been able to provide guidance, we believe the decision to not only raise the dividend, but also increase the repurchase program speaks to management's confidence in the long-term strength and durability of the business," said Jim Cramer and the Action Alerts PLUS team, which holds Apple in its portfolio.

3. -- Amazon Warns of Second-Quarter Loss

Amazon.com  (AMZN) - Get Report posted a profit drop in the first quarter and the tech and online retailing giant said it could report an operating loss of $1.5 billion in the second quarter as it plans to ramp up spending to meet demand during the coronavirus pandemic.

“If you’re a shareowner in Amazon, you may want to take a seat, because we’re not thinking small,” CEO Jeff Bezos said. “Under normal circumstances, in this coming Q2, we’d expect to make some $4 billion or more in operating profit. But these aren’t normal circumstances. Instead, we expect to spend the entirety of that $4 billion, and perhaps a bit more, on Covid-related expenses getting products to customers and keeping employees safe.”

The stock fell 5.67% to $2,333.65 in premarket trading on Friday.

Amazon reported first-quarter earnings of $2.5 billion, or $5.01 a share, down from $3.56 billion, or $7.09 a share, a year earlier. Revenue jumped to $75.5 billion from $59.7 billion.

Analysts had forecast first-quarter earnings of $6.23 a share on revenue of $73.7 billion.

"The market has had a nice run and AMZN is probably overdue for some type of pullback, but if you are an Amazon shareholder, you cannot be afraid when management tells you it is in investment mode," said Jim Cramer and the Action Alerts PLUS team, which holds Amazon in its portfolio.

4. -- Exxon, Chevron, AbbVie and Clorox Report Earnings

Exxon Mobil  (XOM) - Get Report posted a first-quarter loss of $610 million, the energy giant's first quarterly loss in at least 32 years.

Chevron  (CVX) - Get Report posted stronger-than-expected first-quarter revenue and pledged to protect its dividend amid the biggest three-month decline in history for global crude prices. 

Earnings reports are also expected Friday from AbbVie  (ABBV) - Get Report, Clorox  (CLX) - Get Report, Honeywell  (HON) - Get Report, Estee Lauder  (EL) - Get Report, Colgate-Palmolive  (CL) - Get Report, Newell Brands  (NWL) - Get Report and Phillips 66  (PSX) - Get Report.

AbbVie, Clorox, Colgate-Palmolive and Honeywell are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stocks? Learn more now.

5. -- Gilead Sciences Could Spend $1 Billion on Coronavirus Drug

Gilead Sciences  (GILD) - Get Report reported first-quarter earnings and revenue that beat analysts' estimates and said it was expanding production of its remdesivir drug, which is in trials as a possible treatment for Covid-19.

The company reported adjusted earnings of $1.68 a share on revenue of $5.5 billion. Analysts had expected earnings of $1.57 a share on sales of $5.4 billion. 

"Our focus at this time is on both our work with remdesivir and our ongoing commitments to the people who depend on our medicines today," said Daniel O’Day, chairman and CEO.

A major study from the National Institute of Allergy and Infectious Diseases suggested that Gilead's experimental drug worked against the coronavirus.

O'Day said on a conference call with analysts that the company plans to donate about 1.5 million vials of the drug, enough for about 140,000 treatments. Costs associated with ramping up the drug's production could reach as much as $1 billion, according to company executives on the call.

"There's been no other time like this in the history of the planet," O'Day told analysts. "We need to be very thoughtful of how we provide access."

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