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Facebook smashes revenue estimates amid pandemic, forecasts ad growth
31 July 2020, 3:58 AM

Facebook Inc beat analysts’ estimates for quarterly revenue on Thursday and forecast similar growth ahead, as businesses tapped its digital ads tools despite an unprecedented boycott and the economic upheaval of the coronavirus pandemic.

Facebook shares jumped 7% in extended trading after the world’s biggest social network posted revenue growth of 11%, its slowest ever but still far above analysts’ expectations of 3%, according to IBES data from Refinitiv.

Ad sales, which contribute nearly all of Facebook’s revenue, rose 10% to $18.3 billion in the second quarter as people under lockdown spent more time online and businesses rapidly pivoted to e-commerce. Monthly active users rose to 2.7 billion, ahead of estimates of 2.6 billion.

The results were a boon for Facebook a day after its CEO, Mark Zuckerberg, took sharp jabs in a US congressional hearing. Zuckerberg was among four top tech CEOs who were grilled by lawmakers on alleged abuses of market power.

On a call with investors Thursday, Facebook executives sounded notes of defiance about both demands for aggressive regulation and the July advertising boycott, which sought to pressure Facebook to take more action against hate speech.

Zuckerberg said he was “troubled” by calls to “go after” targeted advertising online. “This would reduce opportunities for small businesses so much that it would probably be felt at a macroeconomic level. Is that really what policymakers want in the middle of a pandemic in recession?”

He also pushed back on the boycott’s aims, saying there was a gulf between “how the vast majority of people actually experience our services and the impression you get if you’re just reading much of the commentary about Facebook.”

The company appeared unscathed by the campaign, which drew the support of major advertisers including Unilever, Starbucks Corp and Coca-Cola Co.

Facebook said ad sales in the first three weeks of July grew 10% year-over-year, in line with the rate for the second quarter, and projected that ad revenue growth in the third quarter would be consistent with that, likewise faster than Wall Street estimates.

About 1 100 companies joined the boycott. Although some were among Facebook’s biggest individual spenders, the bulk of Facebook’s ad revenue comes from small businesses.

Zuckerberg said observers “wrongly assume that our business is dependent on a few large advertisers.”

Investors were bracing for difficulties in the second quarter, which was the first to reflect the full impact of virus-related lockdowns. Facebook said in April it was seeing signs of stability for sales in the first three weeks of the quarter after a plunge in March.

Debra Aho Williamson, principal analyst at eMarketer, said she believed Facebook unit Instagram played a “major role” in helping the company withstand the effects of the pandemic.

“Although Facebook doesn’t release details about Instagram’s revenue, we believe that Instagram has been a rapidly growing contributor to the company’s total revenue, and that its success is helping to buoy Facebook as a whole,” she said.

The company fared better than Alphabet Inc’s Google, the world’s biggest seller of online ads, which beat expectations but not by a fantastic amount. Alphabet’s quarterly sales fell for the first time in its 16 years as a public company.

Facebook tempered expectations for later in the year, saying privacy changes being introduced by mobile device makers like Apple could hinder the data sharing it uses to serve personalized ads.

Such “aggressive platform policies” could “cut a lifeline” for small businesses, Facebook’s chief financial officer, David Wehner, cautioned.

Total costs and expenses increased 4% to $12.7 billion in the second quarter, compared with the $12.5 billion analysts had forecast. The company was still recruiting aggressively, adding 4,200 new hires in the quarter, its most on record.

Net income came in at $5.2 billion, or $1.80 per share, in the three months ended June 30. A year earlier it earned $2.6 billion, reflecting a $2 billion charge related to a privacy settlement with the Federal Trade Commission.

Analysts had expected a profit of $1.39 per share.

Johnson & Johnson starts human study of COVID-19 vaccine after promising monkey data
31 July 2020, 3:29 AM

Johnson & Johnson on Thursday kicked off US human safety trials for its COVID-19 vaccine after releasing details of a study in monkeys that showed its best-performing vaccine candidate offered strong protection in a single dose.

When exposed to the virus, six out of six animals who got the vaccine candidate were completely protected from lung disease and five out of six were protected from infection as measured by the presence of virus in nasal swabs, according to the study published in the journal Nature.

“This gives us confidence that we can test a single-shot vaccine in this epidemic and learn whether it has a protective effect in humans,” Dr. Paul Stoffels, J&J’s chief scientific officer, told Reuters in a telephone interview.

The drug-maker said it had started early-stage human trials in the United States and Belgium and would test its vaccine candidate in more than 1 000 healthy adults aged 18 to 55 years, as well as adults aged 65 years and older.

The US government is backing J&J’s vaccine effort with $456 million (350.8 million pounds) in funding as part of a spending spree aimed at speeding production of a vaccine to end the pandemic, which has infected millions and killed more than 660 000 people.

Stoffels said prior tests of this type of vaccine in other diseases found that a second shot significantly increases protection. But in a pandemic a single-shot vaccine has a significant advantage, sidestepping a lot of the logistical issues involved in getting people to come back for their second dose.

The company plans to take up the question of one or two doses in its phase 1 trial.

Depending on those results, J&J plans to start large-scale, phase 3 testing with a single-shot regimen in the second half of September. Around the same time, the company will start a parallel phase 3 study testing a two-shot regimen of the vaccine, Stoffels said.

“The Johnson & Johnson vaccine is exciting because it’s a single dose,” White House Coronavirus Task Force Coordinator Deborah Birx said in an interview with Fox News.

Having one dose “show protection in monkeys like the other vaccines have shown with two doses does shorten the time period for development because your readout becomes 30 days quicker,” she said.

J&J’s vaccine uses a common cold virus known as adenovirus type 26, or Ad26, to ferry coronavirus proteins into cells in the body, causing the body to mount an immune defense against the virus.

In the monkey study, scientists from J&J and Harvard’s Beth Israel Deaconess Medical Center studied seven different potential vaccines in 32 animals and compared the results to 20 control animals who got placebo shots.

Six weeks later, all of the animals were exposed to the SARS-CoV-2 virus. All 20 animals that received the placebo developed high levels of virus in their lungs and nasal swabs.

In the best-performing candidate, which J&J selected for human testing, none of the animals had virus in their lungs and only one showed low levels of virus in nasal swabs. Lab tests showed they all had developed antibodies capable of neutralizing the virus after a single shot.

“This study shows that even just a single immunization with the Ad26 vaccine leads to neutralizing antibody responses and robust protection of monkeys against COVID-19,” said Dr. Dan Barouch, a vaccine researcher at Beth Israel Deaconness who led the research in collaboration with J&J.

J&J shares were up nearly 2% at $149.93 before the market open on Thursday.

Australia confident Sydney virus cases under control, despite Melbourne outbreak
31 July 2020, 2:20 AM

Australian Prime Minister Scott Morrison said on Friday he was confident a coronavirus flare-up in Sydney, the country’s biggest city, was under control but acknowledged the larger spike in cases in Melbourne remained a challenge.

The state of Victoria, whose capital Melbourne is under are imposed six-week lockdown, reported a record 723 new infections on Thursday. The state now accounts for more than half of the country’s 190 deaths from the novel coronavirus.

“The level of community outbreak and community transmission in Victoria is the great challenge down there,” Morrison said on 2GB radio. “And there’s still a lot of work to do and we’re not on top of it yet.”

Morrison said New South Wales, home to Sydney, had contained the spread of the virus from outbreaks at pubs, restaurants and aged care homes thanks to much better contact tracing than in Victoria.

“The key difference is that in New South Wales … there are no cases that have an unknown source. None,” he said, noting that Victoria has had around 50 cases a day with no known source.
“That is one of the key reasons we feel much more confident in New South Wales,” he said.

Morrison urged Muslims who will be celebrating the Eidal-Adha festival starting on Friday to stay away from big gatherings. Victoria’s outbreaks since June have been partly linked to family gatherings after the holy fasting month of Ramadan.

“At times like this, it’s even more important that we don’t gather in those large groups, that as important as faith is,that we really do think of the health issues here,” he said.

SA records 11 046 new COVID-19 cases
31 July 2020, 12:45 AM

South Africa has recorded 11 046 new COVID-19 cases on Thursday, bringing the cumulative number to 482 169 confirmed cases.

315 new COVID-19 related deaths have been reported in the last 24 hours with 121 from Eastern Cape, 96 from Gauteng, 55 from KwaZulu-Natal, 34 from Western Cape and 9 from North West.

This brings the cumulative number of deaths to 7 812.

The total number of tests conducted to date is 2 918 049 with 44 886 new tests conducted since the last report.

The number of recoveries currently stands at 309 601 which translates to a recovery rate of 64%.

US government to launch ‘overwhelming’ COVID-19 vaccine campaign by November
30 July 2020, 11:55 PM

The Trump administration anticipates launching a far-reaching promotions campaign by November to encourage Americans to get vaccinated against the coronavirus,contingent on evidence that a successful vaccine will be available roughly by year end, a senior administration official said.

The campaign will likely be compressed into a short period of time, around four to six weeks, to eliminate any lag between when Americans are alerted to the vaccine and then they can get vaccinated, the official said during a press conference.

“The fine line we are walking is getting the American people very excited about vaccines and missing expectations versus having a bunch of vaccines in the warehouse and not as many people want to get it,” the official said.

“You may not hear a lot about promoting vaccines over the airwaves in August and September but you’ll be overwhelmed by it come November.”

The official cautioned that there is still uncertainty around the timing of when a vaccine will actually be available. Doses could be available as early as October or as late as January, he said.

He also added that the details of the communications campaign will vary based on which subsets of the population the vaccines prove most likely to benefit, which will be determined as data reads out from ongoing clinical trials.

Moderna Inc and Pfizer Inc launched two 30 000-subject trials of COVID-19 vaccines on Monday that could clear the way for regulatory approval and widespread use by the end of this year.

British drug-maker AstraZeneca Plc said it will begin large-scale US trials this summer of its vaccine.

The US government has begun preparing to distribute the vaccines, including talking to private companies about developing technology to track their deployment and monitor who has received them.

 

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