TUESDAY, MARCH 1 , 2022. THE WASHINGTON POST EZ RE A23
Economy & BusinessTECHNOLOGY
HP revenue increases
in first quarter
HP increased its full-year
earnings outlook on strong
personal computer demand
while saying it would take a hit to
quarterly profit as a result of
global sanctions on Russia.
The company said annual
profit will be as much as $4. 38
per share, an increase of 11 cents
a share from the forecast issued
in November. Earnings,
excluding some items, will be as
high as $1.08 per share in the
current period ending in April,
the company said Monday in a
statement. The quarterly outlook
includes an impact of three cents
because of t he global sanctions
against Russia, HP’s c hief
executive, Enrique Lores, said in
an interview.
Driving that rosy outlook is an
increased demand for PCs, a
market t hat HP now expects to
be worth as much as $560 billion
by 202 4, as well as continued
success in segments like gaming
and 3D printing.
“The market i s now
significantly bigger than it was
before the pandemic,” Lores said.
“We don’t t hink we’ll continue to
grow at t he 40 percent annual
growth rates that we have seen in
the last two years, but the new
market s ize is sustainable.”
Still, supply chain challenges
will continue to affect HP’s
printing business through the
remainder of the year, he said.
The company, b ased in Palo Alto,
Calif., w ill work through a
growing order backlog that is
expected to remain elevated
through 2022, Lores said.
Fiscal first-quarter revenue
increased 8.8 percent to
$17 billion, compared with
analysts’ average estimate of
$16.5 billion, according to data
compiled by Bloomberg.
Personal systems sales, which
includes PCs, jumped 15 percent
to $12.2 billion. Printing revenue
dipped 4 percent to $4.8 billion,
in the period ended Jan. 31.
— Bloomberg NewsZoom sees 21 percent
revenue gain in Q4Zoom Video Communications
projected sales for the current
quarter that fell short of Wall
Street’s estimates, ramping up
pressure on the software vendor
to show it can continue to grow
beyond the initial boom causedby the coronavirus pandemic.
Shares declined 10 percent in
extended trading.
Sales will be about
$1.07 billion in the period ending
in April, the c ompany said
Monday in a statement. Analysts,
on average, estimated
$1.1 billion, according to data
compiled by Bloomberg. For the
full year, Zoom anticipates
revenue as high as $4.55 billion,
which was also lower than Wall
Street’s estimate of $4. 75 billion.
Fiscal fourth-quarter revenue
gained 21 percent to $1.07 billion
compared with analysts’
expectations of $1.05 billion.
Profit, excluding some items, was
87 c ents a share.
The company, b ased in San
Jose, has expanded its suite of
products in a bid to broaden its
business and ease investors’
fears. Last w eek, Zoom unveiled
a new cloud contact center
product. The company also sells
an Internet-enabled replacement
for landline phones and
technology to help organizations
improve meetings that involve
remote and in-office
workers. Despite the progress in
expanding its product portfolio,
Zoom continues to face stiff
competition
— Bloomberg NewsOILPetroleos Mexicanos
reports large net lossPetroleos Mexicanos reported
its largest net loss in seven
quarters even as crude output
increased, the latest sign thebeleaguered Mexican state driller
has a ways to go t o stabilize its
finances.
The company reported a
fourth-quarter loss of
124.1 billion pesos ($6.1 billion)
compared with a profit of
96.1 billion pesos a year earlier,
which it said was because ofglobal crude tax increases of 65
percent compared with late- The dollar strengthening
against the peso led to exchange-
rage l osses, Pemex added.
Fourth-quarter oil and
condensate output rose to
1.751 million barrels a day in the
quarter, a 4.5 percent annual rise,
because of higher volumes of
light crude and condensates.
However, output of its heavy
flagship crude Maya declined
substantially.
Pemex’s financial debt fell 0.7
percent compared with a year
ago to $109 billion by the end of
December, thanks to federal
government support, the
company said in a statement
Monday.
— Bloomberg News
ALSO IN BUSINESS
Workday on Monday r eported a
loss of $73.3 million in its fiscal
fourth quarter. The company,
based in Pleasanton, Calif., said it
had a loss of 29 cents per share.
Earnings, adjusted for stock
option expense and nonrecurring
costs, were 78 cents per share.
The maker of human resources
software posted revenue of
$1. 38 billion in the period.— Associated PressDIGESTALBERT GEA/REUTERS
A visitor at the SK Telecom booth uses a screen to experience
some of the firm’s metaverse services during the GSMA’s 2022 Mobile
World Congress in B arcelona on Monday. SK Telecom promoted its
metaverse software at the four-day technology-focused conference.rizon, according to David Bahns-
en, chief investment officer of the
Bahnsen Group.
Although the U. S. market fun-
damentals have weathered the
storm so far, “sentiment-driven
concerns are unlikely to change
anytime soon,” Bahnsen said
Monday in comments emailed to
The Washington Post. “From a
market perspective, sanctions
against Russia will likely have the
largest impact on currency mar-
kets, i ncluding the ruble, the E uro
and the d ollar.”
In recent days, the United
States a nd its allies have moved to
bar several major Russian banks
from SWIFT (a global monetary
transfer service), crack down on
Russian oligarchs and prevent
Russia’s central bank from bailing
out the domestic economy.
Russia responded b y more than
doubling its key interest rate from9.5 percent to 20 percent on Mon-
day. In a statement, the Bank of
Russia said the hike, one of the
largest one-time increases in re-
cent memory, was because of a
drastic change in “external condi-
tions for the Russian economy.”
The bank also froze the o pening of
its stock market a nd delayed t rad-
ing on domestic debt and curren-
cy markets.
Russia’s economy was already
showing signs of severe distress
before the new measures were
implemented, with Russians
flocking to ATMs in a desperate
bid to withdraw cash as the ruble
weakened. Last week, as the in-
cursion into Ukraine unfolded,
Moscow’s MOEX index endured
one of the steepest equity crashes
in stock market history.
On Monday, t he New York Stock
Exchange and the Nasdaq halted
trading of several Russian-owned,U. S.-listed companies citing “reg-
ulatory concern.” E-commerce gi-
ant Ozon Holdings and mining
giant Mechel PAO were among
those frozen. The Wall Street Jour-
nal reported that the halts would
be temporary and would not ex-
tend to delisting, when stocks are
permanently kicked off an ex-
change.
Other consequences are piling
up, such as Russia’s move Monday
to ban air carriers from 36 coun-
tries, including European nations
and Canada, from its massive,
highly t rafficked airspace after the
European Union took similar ac-
tion a gainst R ussian airlines. T his
will force major airlines to take
longer, more circuitous routes to
Asia and the Middle East, likely
increasing the c ost of ticket p rices
and jet fuel f or travelers.
Tr avel stocks slumped in re-
sponse, with United sliding3.1 percent and Delta 3.9 percent,
Southwest dropping 3 percent
and American sliding 1.2 percent.
Carnival and Royal Caribbean
cruise lines both dipped more
than 3 .5 percent.
The maelstrom of disruption is
arriving at a moment when the
global economy is grappling with
a host of pandemic-era stressors,
from chaotic supply chains to
widespread labor shortages. Al-
though investors typically shrug
off geopolitical tensions, the
Ukraine crisis is weighing heavily
on the markets because of Russia’s
central role as a global energy
producer. Russia produces about
10 percent of the world’s oil sup-
ply, on par with the United States
and Saudi Arabia, and surging
energy costs will ripple quickly
through the economy, fueling in-
flation that is already threatening
the economic recovery.○
DOW 33,892.60
DOWN 166.15, 0.5% ○NASDAQ 13,751.40
UP 56.78, 0.4% ○S&P 500 4,373.94
DOWN 10.71, 0.2% ○GOLD $1,900.70
UP $13.10, 0.7% ○CRUDE OIL $95.72
UP $4.13, 4.5% ○10-YEAR TREASURY YIELD 1.82%
DOWN 7.2%CURRENCIES
$1= 114.92 Y EN, 0.89 EUROSBY TAYLOR TELFORDGlobal markets closed i n mixed
territory on Monday after major
indexes recovered from e arly loss-
es, showing a continuation of the
previous week’s volatility amid
fast-growing s anctions penalizing
Russia for i ts invasion of Ukraine.
Stocks initially declined ahead
of another busy week of earnings
and economic data as investors
kept their focus on the fast-un-
folding crisis, with emergency
U. N. meetings Monday while dele-
gations from Russia and Ukraine
convened for the first time on the
Belarus border. The latter talks
concluded, but with plans to con-
tinue, amid a backdrop of bom-
bardment in Kharkiv, Ukraine’s
second-biggest city. Recent sanc-
tions targeting major Russian
banks and companies have en-
raged Russian President V ladimir
Putin, who called the measures
“illegitimate” and ordered his nu-
clear forces to a higher state of
alert.
Major U. S. indexes dipped at
the opening bell and oscillated in
afternoon trading. The Dow Jones
industrial average c losed down
166 points, or 0.5 percent. The
broader S&P 50 0 was down about
11 points, or 0.24 percent, while
the tech-heavy Nasdaq composite
index e nded the day up 56 points,
or 0.41 percent. All three are down
more than 7 percent year to date,
according to MarketWatch.
European markets also closed
in the red despite clawing back
some l osses, with France’s C AC 4 0
declining 1.4 percent and Ger-
many’s DAX giving up more than
0.7 percent. Asian markets were
mixed at the close, with most in-
dexes notching moderate gains,
while Hong Kong’s Hang Seng In-
dex posted a mild decline of
0.25 percent.
Markets loathe uncertainty,
and volatility is likely to rage as
investors grapple with the lack of
an immediate resolution of the
Ukraine-Russia c onflict on the ho-
The historical record suggests
that military conflicts and related
geopolitical disruptions usually
do more short-term damage to
markets than they change overall
sentiment and trends, according
to Chris Larkin, managing direc-
tor of trading at E-Tr ade from
Morgan Stanley. Even after the
immediate, headline-based vola-
tility subsides, there will be many
challenges for investors to con-
tend with, Larkin said Monday in
comments emailed to The Post.
“The macro f actors that were in
place before a shock will, in time,
reassert themselves,” Larkin said.
“So pressures like high inflation
and rising interest rates will re-
main after the market fully ab-
sorbs the shock of the events in
Europe.”
Oil prices surged higher amid
the rising tensions, which have
seen oil prices pushed beyond
$100 per barrel in recent s essions.
Brent crude, the international oil
benchmark, was trading roughly
4.4 percent higher Monday,
around $98. 30 per barrel. West
Texas Intermediate crude, the U. S.
oil benchmark, also climbed
4.2 percent, to trade above $95 per
barrel.
Since December, oil prices have
risen more than 40 percent, influ-
enced in part by speculation that
Putin was preparing to launch an
attack. President Biden has said
that limiting the pain Americans
feel at the gas pump is “critical,”
and that U. S. officials a re working
with allies to secure releases from
the global oil r eserve.
Gold, a Russian export and in-
vestor safe haven in times of tur-
moil, continued its upward
march. On Monday, i t was trading
more than 0.8 percent higher,
around $1,903. 30 per troy ounce.
Other commodities tied t o Rus-
sia and Ukraine, such as alumi-
num, w heat, corn and nickel, were
trading at multiyear highs Mon-
day because of anticipated disrup-
tion.
Government bonds, another
safe haven, also saw pressure
amid the tensions. The yield on
the 10 -year U. S. Tr easury note
edged down to 1.8 percent. Bond
yields move inversely to prices.Aaron Gregg contributed to this
report.Global markets recover e arly l osses but remain volatile
COURTNEY CROW/NEW YORK STOCK EXCHANGE/ASSOCIATED PRESS
Trader John Romolo on the floor of the New York Stock Exchange on Friday. U.S. indexes are down more than 7 percent so far this year.Investors rattled by
escalating sanctions in
Russia-Ukraine conflictthat make up the shell of the vac-
cine’s nanoparticle. The lipids
form a sphere around the mRNA
payload. The mRNA is released
inside a human cell and instructs
it to produce the coronavirus’s
spike protein, which in turn trig-
gers production o f antibodies.
The ratio of the four lipids in t he
spherical bubble i s the telltale key
to the Arbutus invention, the com-
pany maintains. When the first
scientific preprint e merged of how
Moderna, with help from NIH,
made its coronavirus vaccine at
the beginning of the public health
emergency, the authors listed a
lipid ratio that matched the Arbu-
tus patents, t he l awsuit says.nanotechnology particle] t echnol-
ogy ... Moderna was able to begin
producing its COVID-19 vaccine
within just a few days of t he S ARS-
CoV-2 genomic sequence entering
the p ublic domain,” t he s uit says.
“Moderna’s COVID- 19 vaccine
could not have been developed,
much less on a timeline unprec-
edented in human history, with-
out Arbutus’s proven and patent-
ed LNP delivery technology —
technology that had transformed
vaccine design from a years-long
project i nto o ne that could b e per-
formed w ithin an hour o ver a Jan-
uary weekend,” the lawsuit says.
The key invention in the case is
the arrangement of four lipidsgovernment to “avoid any distrac-
tion” in the fight against the omi-
cron variant of the coronavirus.
Moderna and A rbutus had b een
operating under licensing terms
for Moderna’s earlier experimen-
tal use of the nanoparticles, Arbu-
tus and G enevant contend i n their
suit. The particles are used t o pro-
tect and d eliver messenger RNA as
it travels through t he body.
After Moderna rolled out its
coronavirus vaccine using the
nanoparticles in 2020 in record
time, Arbutus and Moderna com-
municated about a license for the
new shots without reaching any
agreement, t he lawsuit says.
“Relying on Arbutus’s [lipidover its vaccine, which was devel-
oped in less than a year and has
been key to fighting the pandemic.
The company is embroiled in a
patent dispute with the federal
government after it disputed
claims that three scientists from
the National Institutes of Health
were co-inventors of the vaccine.
Government scientists worked
with Moderna in January 2020 to
rapidly develop the spike protein
technology key to its vaccine. The
company also received billions in
federal funding to develop its vac-
cine and to boost manufacturing
capacity.
Moderna said in December it
was pausing its dispute with theArbutus and Genevant “years of
painstaking work to develop and
refine.” The suit had been expect-
ed after Moderna lost a U. S. Court
of Appeals ruling last year in the
protracted p atent battle.
Moderna, a 10 -year-old Cam-
bridge, Mass.-based biotechnolo-
gy f irm that had not marketed a ny
product before the pandemic, has
said it expects coronavirus vaccine
sales to top $19 billion in 2022.
Arbutus and Genevant — a com-
pany spearheaded by former Ar-
butus scientists — could demand
some of that as royalties if their
challenge succeeds.
The suit is one of two high-
p rofile legal fights Moderna facesBY YASMEEN ABUTALEB
AND CHRISTOPHER ROWLANDModerna faces yet another pat-
ent challenge over its coronavirus
vaccine after Arbutus Biopharma
and Genevant Sciences, both
small biotechnology companies,
filed a lawsuit on Monday a lleging
Moderna hijacked its technology
to develop the multibillion-dollar
vaccine.
Arbutus and Genevant said in
their lawsuit that Moderna in-
fringed on their patent for what is
called lipid nanoparticle technol-
ogy, which they say was key in the
development o f Moderna’s mRNA
vaccine and took scientists from
Moderna faces a new patent lawsuit over its l ucrative coronavirus vaccine