Microsoft, Tesla, Coronavirus, Facebook and Amazon - 5 Things You Must Know Thursday

Stock futures fall as the death toll from the coronavirus in China rises; Amazon reports earnings; Microsoft's Azure unit drives its earnings beat; Tesla soars after smashing profit estimates.
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Here are five things you must know for Thursday, Jan. 30:

1. -- Stock Futures Slump as Coronavirus Deaths Rise

Stock futures declined sharply Thursday following heavy losses in Asia as the death toll from the coronavirus in China rose, global airlines expanded flight cancellations to the region and as companies such as Amazon.com (AMZN) - Get Report began restricting employee travel to China.

The World Health Organization is set to meet later Thursday in Geneva amid speculation the agency could label the outbreak as a global health crisis, triggering deeper travel restrictions in and out of China, the world's second-largest economy.

The death toll from the virus has risen to 170, with more than 7,700 people in China and elsewhere confirmed infected. India reported its first confirmed case of coronavirus.

With economists altering forecasts for China's economic growth GDP sharply downwards, and some markets in Asia region returning to trading following the Lunar New Year holiday, global stocks were back in the red and shrugging off a series of stronger-than-expected quarterly earnings from the biggest American tech companies. Stocks in Taiwan on Thursday slumped more than 5%.

Federal Reserve Chairman Jerome Powell also cited the coronavirus risk when he explained Wednesday that the central bank was still monitoring "increasing uncertainties" in the global economy and risks to growth from the virus. The Fed opted to leave benchmark interest rates unchanged, as expected, at its meeting Wednesday.

Contracts linked to the Dow Jones Industrial Average fell 215 points, futures for the S&P 500 declined 25.15 points and Nasdaq futures were down 66.50 points.

Stocks finished mixed Wednesday as investors looked for support from stronger-than-expected earnings from Apple (AAPL) - Get Report. The Dow rose less than 0.1% to end the session at 28,734.45.

2. -- Amazon, Coca-Cola and Verizon Report Earnings

Coca-Cola's (KO) - Get Report adjusted earnings in the fourth quarter of 44 cents a share met Wall Street forecasts.

Verizon (VZ) - Get Report  reported fourth-quarter adjusted earnings of $1.13 a share, missing analysts' estimates by 1 cent.

Earnings reports are also expected Thursday from Amazon.com (AMZN) - Get Report, Altria (MO) - Get Report, DuPont (DD) - Get Report, Visa (V) - Get Report, Raytheon (RTN) - Get Report, Electronic Arts (EA) - Get Report, Biogen (BIIB) - Get Report, United Parcel Service (UPS) - Get Report, Northrop Grumman (NOC) - Get Report, Eli Lilly (LLY) - Get Report, U.S. Steel (X) - Get Report and Amgen (AMGN) - Get Report.

Amazon is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN? Learn more now.

The economic calendar in the U.S. Thursday includes the fourth-quarter Gross Domestic Product report at 8:30 a.m. ET. Economists expect GDP in the quarter to increase at an annual pace of 2.1%, matching the pace of the third quarter.

The calendar also includes weekly jobless claims at 8:30 a.m.

3 . -- Microsoft's Azure Unit Drives Earnings Beat

Microsoft (MSFT) - Get Report reported fiscal second-quarter earnings that topped analysts' estimates and the stock jumped in premarket trading Thursday, up 3.44% to $173.82, as revenue from its commercial cloud unit Azure soared 62%.

Microsoft reported quarterly earnings of $1.51 a share, easily toppings forecasts of $1.32. Revenue rose 14% to $36.9 billion as sales from Microsoft's intelligent cloud division jumped 27% to $11.9 billion.

For the fiscal third quarter, Microsoft said it sees intelligent cloud revenue - where it remains locked in a battle with market leader Amazon - in the region of $11.85 billion to $12.05 billion and sales from personal computing of between $10.75 billion and $11.15 billion.

"Overall, in terms of the Azure momentum, it's sort of the thing that we have seen even in the previous quarters so, which is, we have a stack that is from infrastructure to the (platform as a service) that's fairly differentiated," Microsoft CEO Satya Nadella told investors on a conference call late Wednesday. 

Azure's revenue jump of 62% in the fiscal second quarter was just ahead of the 59% pace recorded over the previous three months, marking the first quarter-on-quarter acceleration in two years. 

"Bottom line, Microsoft continues to operate at the highest of levels and with this quarter has once again demonstrated why it deserves to be one of the few companies on the planet deserving of a market cap in excess of $1 trillion," said Jim Cramer and the Action Alerts PLUS team, which holds Microsoft in its portfolio.

4. -- Tesla Soars on Earnings Beat, Sees Delivering More Than 500,000 Cars in 2020

Tesla (TSLA) - Get Report soared in premarket trading, rising 11.08% to $645.37 after the electric vehicle company blasted past fourth-quarter earnings estimates and said it would "comfortably" deliver more than half a million cars in 2020.

Tesla reported adjusted earnings for the December quarter of $2.14 a share, smashing the Wall Street forecast of $1.77. Revenue rose 2.1% to $7.38 billion and beat analysts' forecasts of $7 billion.

Looking into 2020, Tesla said vehicle deliveries should "comfortably exceed" 500,000, which would represent at least an 86% improvement from 2019. The company also insisted it has no plans to raise capital even as it pledges to ramp-up battery production.

"It's hard to think of another company that has more exciting product and technology roadmap, so, I'm super fired-up about where Tesla will be in the next 10 years," founder and CEO Elon Musk told investors on a conference call late Wednesday. "If you look back 10 years from today to 2010, we will produce approximately at 1,000 times more cars in 2020 then we produced in 2010."

5. -- Facebook Sinks After Rise in Expenses

Facebook FB fell sharply in premarket trading Thursday despite reporting solid fourth-quarter earnings and revenue.

The stock declined 7.29% to $206.96.

The social media giant topped bottom and top-line forecasts, posting earnings of $2.56 a share on revenue of $21.08 billion, compared with analysts' estimates of profit of $2.52 and revenue of $20.88 billion. 

Facebook’s earnings of $2.56 a share were only 1.2% higher than analysts’ average expectations, the smallest quarterly earnings beat Facebook has ever produced, according to MarketWatch. Meanwhile, year-over-year sales growth of 24.6% was its lowest in history.

Facebook also disclosed an increase in expenses last quarter, reporting $12.22 billion in total costs and expenses compared with $9.1 billion last year. Operating margin  contracted to 42% vs. 46% in the year-earlier quarter.

"We would not be surprised to see a bull vs. bear debate unfold because even though the core Facebook story (not Instagram) is showing some cracks in developed regions probably due to saturation and preference for Instagram, the company as a whole is still the dominant social media advertising platform on the market with incredible reach and strong ROIs," said Jim Cramer and the Action Alerts PLUS team, which holds Facebook in its portfolio. "Plus, we can make a very strong argument that shares are already priced for slowing growth because it is not aggressively valued at 24x consensus 2020 earnings per share estimates."