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Apple, Amazon, Exxon, Caterpillar - 5 Things You Must Know Friday

Stock futures rise following impressive earnings from Apple and; Google's revenue falls for first time since 2004; Exxon Mobil, Chevron and Caterpillar report earnings Friday.

Here are five things you must know for Friday, July 31:

1. -- Stock Futures Boosted by Big Tech

Stock futures were modestly higher Friday as impressive earnings from Apple  (AAPL) - Get Free Report and  (AMZN) - Get Free Report revealed just how much consumers have come to depend on products from the tech giants during the coronavirus pandemic.

Facebook  (FB) - Get Free Report and Alphabet  (GOOGL) - Get Free Report, the parent company of Google, also posted solid earnings.

Contracts linked to the Dow Jones Industrial Average rose 76 points, S&P 500 futures gained 9 points and Nasdaq futures were up 115 points.

The reports from America's most powerful tech companies were lifting sentiment a day after data showed the U.S. economy contracted the most on record in the second quarter and as deaths in Texas, Florida and Arizona from Covid-19, the disease caused by the coronavirus, set daily records.

Caterpillar  (CAT) - Get Free Report posted second-quarter adjusted earnings of $1.03 a share, higher than analysts' estimates of 65 cents. Revenue of $10 billion also beat forecasts.

Chevron  (CVX) - Get Free Report reported a wider-than-expected second-quarter loss and warned that commodity demand won't return to pre-pandemic levels until at least the end of the year.

Merck's  (MRK) - Get Free Report second-quarter adjusted earnings of $1.37 a share beat Wall Street forecasts and the drug company lifted its 2020 guidance.

Exxon Mobil  (XOM) - Get Free Report posted an adjusted loss of 70 cents a share in the second quarter, wider than analysts' estimates, as the coronavirus pandemic severely dented demand of crude.

Colgate-Palmolive  (CL) - Get Free Report posted stronger-than-expected second-quarter earnings as cleaning product sales during the peak of the coronavirus pandemic boosted the brand giant's top and bottom lines. 

Apple, Amazon and Colgate-Palmolive are holdings in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells the stocks? Learn more now.

The economic calendar Friday includes Personal Income and Outlays for June at 8:30 a.m. ET and Consumer Sentiment for July at 10 a.m.

2. -- Apple Posts Record Earnings, Splits Stock

Apple posted record earnings in its fiscal third quarter and said it would split its stock 4-for-1 as the tech giant looks to make it “more accessible to a broader base of investors.”

Apple Splitting Stock for First Time Since 2014

Apple shares rose 6.55% to $409.98 in premarket trading Friday.

Earnings in the quarter were $11.25 billion, or $2.58 a share, up from $10.04 billion, or $2.18 a share, a year earlier. Analysts predicted profit of $2.05 a share.

Revenue of $59.7 billion rose 11% from a year earlier and topped consensus estimates of $52.24 billion.

"Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments,” said Apple CEO Tim Cook. “In uncertain times, this performance is a testament to the important role our products play in our customers’ lives and to Apple’s relentless innovation."

Apple's iPhone revenue was $26.42 billion, above estimates of $22.2 billion. Many of Apple's retail stores worldwide were temporarily closed during the quarter, though some have now reopened at least on a minimal basis.

The company said new iPhones would be delayed "a few weeks," suggesting the handsets will be unveiled in October.

"We believe these results speak not only to the increased importance of consumer computing products more broadly given the remote work environment we find ourselves in, but also Apple's incredibly fierce customer loyalty - a less tangible, but absolutely crucial factor of our investment thesis - and management's time and again proven ability to navigate the harshest of operating environments, be it a trade war with a key country in the supply chain or a global pandemic the likes of which has not been seen in over a century," said Jim Cramer and the Action Alerts PLUS team, which holds Apple in its portfolio.

3. -- Amazon Blows Away Earnings Expectations posted second-quarter earnings of $10.30 a share, blowing away analysts' expectations after sales jumped 40% as consumers turned to the online retailing giant during the coronavirus pandemic.

The stock rose 5.49% to $3,219.51 in premarket trading Friday.

Amazon reported sales of $88.9 billion vs. year-earlier sales of $63.4 billion.

Analysts had expected Amazon to report earnings of $1.48 a share on sales of $81.45 billion.

“This was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe,” said founder and CEO Jeff Bezos in a statement. “As expected, we spent over $4 billion on incremental Covid-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand."

The company said revenue at its e-commerce business rose 47.8% in the second quarter to $45.9 billion, higher than forecasts of $39.89 billion. 

Amazon Web Services, the company’s cloud-computing division, reported revenue of $10.8 billion from $8.38 billion a year earlier. Operating income at the division was $3.36 billion in the period, up 58% from a year earlier.

Amazon said it expects third-quarter revenue of between $87 billion and $93 billion. Analysts had been calling for revenue of $86.3 billion,

"Whether it be greater adoption of e-commerce or the necessity of the cloud, Amazon is one of the largest beneficiaries of the accelerated trends brought on by the pandemic," said Jim Cramer and the Action Alerts PLUS team, which holds Amazon in its portfolio. "And in a time when lockdown orders disrupted everyday life as we knew it, management's relentless focus on their customers paid off in spades."

4. -- Alphabet's Revenue Dips, Facebook Sees Sales Rise 11%

Google parent Alphabet saw revenue in the second quarter fall 2% to $38.3 billion, the first sales decline since the company went public in 2004.

Ad sales slid 8% to $29.87 billion in the period from $32.49 billion a year earlier. 

Chief Financial Officer Ruth Porat, however, said on a conference call that ad sales began picking up again by the end of the second quarter.

Revenue from Google’s cloud division, a major beneficiary of the coronavirus pandemic, soared 43% to $3 billion. YouTube revenue rose 6% to $3.8 billion.

Facebook, meanwhile, posted a revenue jump of 11% in the quarter, with earnings nearly doubling to $5.18 billion.

Revenue rose to $18.69 billion from $16.89 billion a year earlier.

Facebook’s main social network reported 2.7 billion monthly active users in the quarter, higher than analysts' estimates.

Alphabet shares declined 0.35% to $1,532.98. Facebook rose 6.01% to $248.60 in premarket trading Friday.

Alphabet and Facebook are holdings in Jim Cramer’s Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells the stocks? Learn more now.

5. -- Warren Buffett Lifts Stake in Bank of America to 11.8%

Warren Buffett’s Berkshire Hathaway undefined lifted its stake in Bank of America  (BAC) - Get Free Report to 11.8% after buying another $522 million of stock in the Charlotte, North Carolina, lender.

Berkshire Hathaway bought about 21.2 million Bank of America shares earlier this week, according to a regulatory filing.

Bank of America slipped 0.36% to $24.75 in premarket trading.