America’s love of big autos translated into blowout results yesterday for General Motors, which also benefited from recovering sales in China following a big hit amid the coronavirus pandemic.
The US auto giant, which recently launched new sport utility vehicles to accompany its fleet of revamped pickup trucks, enjoyed lofty profit margins in North America, fuelled by strong vehicle pricing and tight auto inventory.
Executives spoke of “pricing power” in the US, partly in the aftermath of US auto plant closures for about two months this spring due to Covid-19.
Production resumed in May under strict safety protocols.
“You really have this demand out there that we haven’t seen in a long time, especially for full sized pickups,” chief executive Mary Barra said on CNBC. “We just keep seeing demand for trucks continuing to grow.”
Barra said in an earlier briefing with reporters that she was confident that GM would be able to maintain auto production despite rising Covid-19 cases in the US.
“When the protocols are followed, we don’t have facilities spread,” she said, adding that the company has brought on temporary workers at times in recent months.
GM scored a 72% increase in third-quarter profit to $4.0bn from the year-ago period.
That translated into earnings of $2.78 per share, more than twice the expected level.
Revenues of $35.5bn were roughly flat compared with last year’s level.

ArcelorMittal 
Steel giant ArcelorMittal said yesterday it cut its net loss in half during the third quarter as demand rose with major economies exiting coronavirus lockdowns.
The net loss of $261mn was also half of the net loss posted in the July to September period of 2019.
On an operating basis, however, the firm bounced back into profit of $718mn from an operating loss of $253 in the second quarter, when many major economies shut many businesses, dampening demand for steel.
But many countries then eased those measures during the third quarter, leading to a rebound in demand for steel in many sectors, in particular the auto industry.
ArcelorMittal said sales hit $13.3bn, which was nearly a 21% jump from the second quarter, but were still a fifth below the level of last year. That beat the analyst consensus of $12.8bn compiled by Bloomberg.
“The third quarter marked an improved operating performance for the Group with steel markets recovering gradually from the very challenging second quarter after the ending of lockdowns,” CEO Lakshmi Mittal said in a statement.
But he added that “the recent rise in Covid-19 cases worldwide makes it prudent to remain cautious about the outlook and we should be prepared for further volatility.”

New York Times
The New York Times said yesterday profits rose in the past quarter, lifted by gains in paying digital readers, as its total subscription base topped 7mn.
The prestigious US daily said net profit rose to $35.5mn in the third quarter, more than double the level from a year earlier, while revenues rose 13% to $301mn.
The Times said that revenue from digital subscribers in the quarter – which rose to some 6mn – was for the first time higher than that from print subscribers.
“For the second quarter running, total digital revenue exceeded print revenue.
And for the first time, total digital-only subscription revenue exceeded print subscription revenue, making digital-only subscriptions not just the central engine of the company’s growth,” said Meredith Kopit Levien, who took over earlier this year as president and chief executive officer.
“We ended the quarter with approximately 6.9mn total subscriptions, and crossed the 7mn mark in the month of October, an increase of 2mn digital-only subscriptions over the last year and 393,000 over the last quarter.”
The Times has seen gains in readership in recent years as it has bolstered its newsroom to cover President Donald Trump’s administration and the coronavirus pandemic while expanding its footprint.
“The news cycle certainly played a role, but as we are increasingly seeing with each passing quarter, so too did the breadth of our coverage and our improving ability to mean more to more people,” Levien said.
“The continued demand for quality, original, independent journalism across a range of topics makes us even more optimistic about the size of the total market for digital journalism subscriptions and our position in it.”

Sainsbury’s
Up to 3,500 jobs are at risk at British supermarket group Sainsbury’s as its new CEO embarks on a restructuring drive that will close 420 Argos shops and all in-store meat, fish and deli counters.
Detailing his strategy for Britain’s second biggest grocer, Simon Roberts, who succeeded Mike Coupe in June, said yesterday he would refocus Sainsbury’s on its core food business. He plans to lower prices, treble the number of new products launched each year, expand online services to meet growing demand and open 110 new convenience stores over three years.
“We will put food back at the heart of Sainsbury’s,” he said.
“Our other brands – Argos, Habitat, Tu, Nectar and Sainsbury’s Bank – must deliver for their customers and for our shareholders in their own right.”
He said the bank could be sold, confirming to reporters “expressions of interest” have been received.
He denied he was taking the 151-year old Sainsbury’s downmarket by closing in-store counters.
“We’ve had a really good look at how customers are shopping for food today and the reality on the counters is that they have been in long term decline for quite a period of time,” he told reporters.
He is targeting an Argos general merchandise store or collection point in every Sainsbury’s supermarket, reducing the Argos standalone store estate to around 100 by March 2024.
Roberts said his plan would boost earnings, forecasting pretax profit in the year to March 2022 ahead of that reported in the year to March 2020 – a year not impacted by Covid-19.
Sainsbury’s said it aimed to find alternative roles for as many affected employees as possible.
Sainsbury’s reported a pretax loss of £137mn ($178mn) for the 28 weeks to September 19, reflecting a £438mn charge due to the Argos closures and other strategic and market changes.
Underlying pretax profit was £301mn – ahead of analysts’ average forecast of £275mn and the 238mn made in the same period last year, reflecting a 6.9% increase in like-for-like retail sales.
Covid-19 related costs of about £290mn were partially offset by £230mn of business rates relief.
Roberts said Sainsbury’s was justified in taking the relief because of the huge costs incurred in “feeding the nation” during the crisis.
Full year 2020-21 underlying pretax profit was forecast to be at least 5% higher than 2019-20’s £586mn, reflecting stronger than expected sales.
Sainsbury’s is also paying dividends again – declaring a 7.3 pence special dividend in lieu of a final dividend for 2019-20, and an interim payment of 3.2 pence.

Bristol Myers Squibb
Bristol Myers Squibb Co yesterday posted better-than-expected third-quarter earnings, with most of its top-selling drugs outperforming Wall Street forecasts, as many Americans resumed routine medical care they had put off earlier in the coronavirus pandemic.
The company said it earned $1.87bn, or 82 cents a share, in the quarter, up from $1.35bn, or 83 cents a share, a year ago.
This year’s results include sales of drugs acquired with the $74bn purchase of Celgene late last year.
Excluding one-time items, Bristol Myers said it earned $1.63 a share for the quarter.
Analysts on average expected $1.49, according to IBES data from Refinitiv.
The New York-based company raised its full-year profit forecast and now expects to earn $6.25 to $6.35 per share, up from its prior view of $6.10 to $6.25 a share.
Sales were $10.54bn in the quarter, beating analysts’ forecasts by about $200mn.
The company’s cancer drugs Revlimid, Opdivo and Pomalyst, as well as rheumatoid arthritis medicine Orencia, all exceeded Wall Street expectations.

Alibaba
Chinese e-commerce leader Alibaba yesterday reported solid 30% year-on-year revenue growth for the July-September quarter, providing some much-needed good news amid turmoil over its Ant Group affiliate’s abandoned IPO.
Hangzhou-based Alibaba said revenue – a key measure of the internet giant’s business health as well as overall Chinese consumer spending – rose to 155bn yuan ($23bn). The announcement comes ahead of China’s November 11 “Single’s Day” shopping festival next week, which was popularised by Alibaba and is now the world’s biggest annual shopping event.
Alibaba’s latest quarterly earnings provided further evidence of China’s recovery from the coronavirus, which emerged in the country late last year and hammered its economy earlier in 2020.
Alibaba has said the pandemic may be helping e-commerce as consumers opt for the safety of online shopping.
Alibaba’s profit for the quarter fell 60%, however, to 28.7bn yuan compared to last year, when it booked a significant one-time gain upon receiving a 33% equity interest in its financial arm Ant Group.
Global markets were stunned on Tuesday by the suspension of Ant group’s planned record-breaking $34bn IPO.
The suspension came amid rising acrimony between Alibaba’s billionaire co-founder Jack Ma, who is also Ant Group’s controlling shareholder, and Chinese regulators.
Regulators have threatened Ant’s bottom line by suddenly tightening online lending requirements in the run-up to the planned issue of shares, which had been set to begin trading yesterday.
Ant Group made its name with the online payments platform Alipay, but has expanded into offering loans, credit, and insurance, putting it at odds with traditional state-owned financial institutions and government regulators.
News of the IPO cancellation hammered Alibaba shares listed in New York and Hong Kong earlier this week.

Commerzbank
Germany’s second-largest lender Commerzbank yesterday reported a third quarter net loss of €69mn after provisions against a coronavirus hit economy and a restructuring that will close branches and cut jobs.
Operating profit dropped nearly two-thirds to €168mn, weighed down by risk provisions on its loan portfolio that doubled in a year due to the pandemic.
“We have a stable customer business and a strong capital position,” finance chief Betina Orlopp said, adding that this “represents a good basis for future impacts arising from the coronavirus crisis”.
“We have paved the way for further cost savings,” Orlopp added.
Commerzbank, like its crosstown rival Deutsche Bank, is cutting thousands of jobs as it looks to restructure.
It is shutting 200 branches as consumers pivot to contactless spending and online accounts, and cutting as many as 10,000 jobs.
This resulted in €201mn of charges from restructuring, driving third-quarter earnings into loss.
The third quarter net loss of €69mn compared with a profit of 297mn for the same period last year.
Commerzbank also confirmed that it expects to end the year with a net loss, which would be the first since 2009.
Last year, it posted a net profit of €644mn.
The task of getting the bank back on track will fall to its new boss from the start of 2021, Manfred Knof, a defector from Deutsche Bank. He will replace Martin Zielke, who resigned in July after being criticised by its second-biggest shareholder, investment house Cerberus.

Lufthansa 
German flag carrier Lufthansa yesterday posted a third quarter net loss of €2.0bn as it prepares for a “hard and challenging” winter amid lockdowns to curb the coronavirus pandemic.
Europe’s largest airline said it will fly a maximum of 25% of normal capacity from October to December and expects to burn through €350mn ($410.9mn) in cash a month.
“We are now at the beginning of a winter that will be hard and challenging for our industry,” chief executive Carsten Spohr said in a statement.
After its revenues crashed in the first wave of the coronavirus pandemic, the airline was propped up in June by the German state which pumped in €9bn of liquidity for a 25% stake.
But the return of restrictions on movement in its home territory of Germany, alongside even stricter lockdowns in countries such as France and Britain, has “significantly worsened” the outlook for air travel, Lufthansa said.
CEO Spohr urged the introduction of “widespread rapid tests” for the virus, in order to reduce the need for lengthy quarantines which airlines say are deterring travellers.
The company remains on track, it said, to return to positive operating cash flow in 2021 — but only if the “situation allows for an increase in capacity to around 50% of pre-crisis levels”. In the three months to September, the carrier reported a net loss of €2.0bn, compared with a 416mn euro profit in the same period last year, as it carried just 20% of its usual passenger numbers.
Losses were reduced due to “strict cost savings and the expansion of our flight programme” in the summer months, Spohr said.
Lufthansa succeeded in cutting the outflow of funds at the start of the pandemic from €1mn per hour to “only” €1mn every two hours, it said in October.
The airline had previously warned that 30,000 jobs were under threat as it scaled down its winter schedule to levels not seen since the 1970s and yesterday said that 27,000 full-time positions were “surplus”.
Lufthansa’s board says it aims to find agreements to “limit the number of redundancies required” through short-time working and pay cuts.
Lufthansa, which includes subsidiaries Swiss, Austrian, Brussels Airlines and Eurowings, hopes to remain “the leading European airline group” after an “inevitable restructuring”, Spohr said.

Société Générale
French banking giant Société Générale yesterday reported a return profit in the third quarter as it benefited from cost reductions and a rebound in activity after heavy losses due to the coronavirus pandemic.
For the period July to September, the group posted a net profit of €862mn ($1.0bn), up almost 1.0% from the same period in 2019, it said in a statement.
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This followed losses of €326mn in the first quarter and more than €1bn in the second as the company struggled with the consequences of the economic crisis sparked by the coronavirus pandemic.
The group reported a “rebound in revenues in all activities.”
The latest results “illustrate the ability of all our businesses to rebound, after the exceptional lockdown period that we have experienced, and to adapt to a still very uncertain environment,” CEO Frederic Oudea said.
“The performances reflect our efforts in terms of commercial development, cost control and rigorous risk management.” 
During the first two quarters the bank was forced to make provisions on a massive scale against non-repayment of loans.
The provisions continued in the third quarter but to a much lesser extent.
It also improved profitability by significantly reducing management costs in all divisions.