What Moderna Earnings Reveal About The Pandemic

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What Moderna Earnings Reveal About The Pandemic

by David Reavill

 

While it may not be intentional, vaccine maker Moderna provides us with the most accurate measure of the Covid-19 Pandemic. The data is all here, in Moderna’s earnings report released yesterday. And to understate the case, these results are dismal. Top-line revenue is down a third, and net income is down two-thirds.

Now you may be asking why these Moderna earnings are so important, and the answer is that Moderna results may be the most accurate account of the current state of the Pandemic for you and me.

For anyone who has researched this topic you’ll note that the CDC data, our country’s most thorough accounting for Covid, needs to be updated. Most mortality numbers from the CDC are a year old and tell us little about Covid’s current status.

Even Covid’s overall lethality is hazy at best. Current estimates are that Covid has killed somewhere between 5 and 25million victims worldwide. That’s an 80% range between the high and low end. Or about the same degree of mortality that we currently estimate the Black Death or the Plague of Justinian nearly a thousand and fifteen hundred years ago.

Comparing the Covid Pandemic to the only comparable recent Pandemic, the HIV/Aids pandemic is like night and day. For Aids, scientists can provide the exact number who’ve perished to likely the nearest hundred. We know, for instance, that 40.1 million died from HIV/AIDS.

For Covid, there is an 18 million range between high and low deaths worldwide. It is a remarkable lack of precision.

On the other hand, Moderna, a publicly traded company, must report quarterly earnings. And those earnings must accurately reflect the company’s financial performance.

Making Moderna such an excellent proxy for the status of Covid is that the Covid vaccine is essentially the only money-making product the company has had over these past couple of years. Moderna is bringing on new products, but they have yet to reach the marketplace.

Moderna’s financial statements closely track the ups and downs of Covid. The company was in the development stage for ten years until 2021. During that decade, Moderna operated at a loss, awaiting the time that one of its products would become viable.

As bad as Covid was, it did wonders for Moderna. Like a rocket, Moderna’s income exploded in 2021, the first full year of the Pandemic. From a $700mm loss the year before to a $12 billion gain in 2021. And for the first time, Moderna became profitable.

These results point to the high point of the Pandemic. Most Covid deaths occurred in 2021 and the first half of this year, and Moderna distributed the most number of vaccines.

This decline in the number of vaccines currently administered is clearly shown in the Moderna sales record. At the peak of Moderna sales last year, the number of vaccines administered was nearly $5 billion worth per quarter. The latest quarterly sales were slightly over $3 billion. They were reflecting that one-third decline in sales we mentioned at the beginning.

In management’s statement yesterday, they predict that sales for the last quarter will be in the $4 billion-plus range. What makes this, so telling is that next quarter will be the fourth quarter of the year, winter — the time when respiratory illnesses are the most virulent.

So, Moderna estimates that this year’s fourth quarter sales will be lower than last year’s fall quarter. An accurate indication that we see a rapid decline in the number of shots administered. And by inference, fewer Covid illnesses in the general population.

Wall Street, of course, is none too happy with these developments. The Street is always looking for higher, not lower, profits. Moderna’s stock began the year at well over $300 per share and today trades for less than half that as analysts continue to reduce Moderna’s profits estimates for 2022.

We will know much more at Moderna’s next earnings call early in January. But for now, Modern’s earnings look to continue to slide. Which likely means that the worst of the Covid Pandemic may be behind us.

But what’s bad news for Moderna’s earnings may be excellent news for the rest of us.

Econ Briefs

The labor market turned decidedly negative, according to two reports this morning.

First, the Payroll Report showed a massive decline in new jobs added. Monthly job gains have averaged over 400k this year. But in October, October saw just 261K new jobs. That’s a drop of 35% in new workers added to the payroll — a dramatic change in this usually staid Payrolls Report.

Next came the nail in this two-part decline in the labor market. The Unemployment rate ticked up two ticks to 3.7%. It matched the August rate for the highest level of unemployment in the last eight months.

This could not happen at a worse time for incumbents running in Tuesday’s election. Those in office like to claim that their policies create jobs. Here are the two most closely followed measures of the labor market, both showing very dramatic declines. You can bet that people will take these measures with them when they go to the polls to vote.

Rounding out this plethora of bad labor news, we saw significant declines in private companies’ average hourly earnings and payrolls. Only manufacturing and government employment showed gains in this report.

Later today, we’ll get the latest reading on the number of active oil wells in the country. Don’t forget. We’ve never recovered to the oil drilling levels we achieved in 2019.


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GuvGeek
GuvGeek
2 months ago

The Medical Industrial Complex, The Military Industrial Complex, and to some extent High Tech, Farming, and Education are extremely volatile and poorly Managed Industries that have become dependent on Government. They have all come to rely on Government for their existence. Anytime the Government becomes a crutch for an industry it no longer follows sound management principles.

The Medical Industrial Complex is worse than playing the Lottery. Finding true breakthrough medications is a total crap shoot, so companies spend a lot of time lobbying for approvals of very marginal, and sometimes dangerous, medications to stay solvent.

The Military Industrial Complex needs Wars and Police Actions to stay solvent. While much of the High tech is “cool”, the reality is that in most cases it’s the Solid and reliable low tech that wins wars. Swarm a 5th Generation Fighter with Fifty F4s and the 5th Generation fighter will lose.

The High Tech Industry is very dependent on Government Contracts but most High Tech industries can exist without Government contracts. To some extent Farming can survive without Government subsidies and would do better without Government Regulation. Education has been destroyed by Government. Government removed competition from the Education Industry. As a result, education lags behind industry in many cases by 10 years and it now takes 16 years to educate a child to be a marginally productive citizen when we did this in 8 years a century ago. We need to be able to educate our Children to world class standards in 12 years or less so they can be productive and independent by 18 years old.

The Bottom Line is Big Government and Big Industry are both incredibly wasteful of Resources. The bigger an Industry becomes, the more dependent it becomes on Government and Government Regulation to Control Competition. The worse thing is the Idea in Government that some Companies are too big or too important to fail. Businesses fail due to incompetence, lack of vision, or bad management. We now have a critical problem in the United States with Government messing with the Free Market Place and Redistributing Wealth.

In America, there is no longer a Free Market and the Stock Markets are manipulated to ensure that entities deemed to big to fail are bailed out by the Government! Moderna was a Government bailout of a failing Company!

Stop medical tyranny
Stop medical tyranny
2 months ago

No one seems to mention that the governments funded these vaccines with taxpayer dollars. The vaccines were “free” to anyone who wanted one.

Last edited 2 months ago by Stop medical tyranny
VenessaFord
VenessaFord
2 months ago

uyk

Last edited 2 months ago by VenessaFord