US FINANCIAL MARKET
Stocks Lose Steam Just a Few Hours Away From Fed: Markets Wrap – Bloomberg, 7/26/2023
- Wall Street traders bracing for a Federal Reserve rate hike on Wednesday sent stocks lower on speculation Jerome Powell will signal another increase this year isn’t entirely off the cards.
- The S&P 500 fell 0.3%. The Nasdaq 100 fell 0.9%. The Dow Jones Industrial Average was little changed.
- After a widely expected 25-basis-point boost in July, the swap market is currently projecting a 52% chance of a move of that same magnitude before the year is over.
- Whether or not that will materialize is yet to be seen, but many analysts predict the Fed will at least keep its options open after raising borrowing costs to the highest level in 22 years.
- The S&P 500 dropped from the highest level since April 2022, the tech-heavy Nasdaq 100 underperformed and Dow Jones Industrial Average wavered.
- If the blue-chip gauge closes higher, it will be its 13th straight gain — the longest winning run since 1987.
- Two-year US yields were little changed at 4.88%.
- The yield on 10-year Treasuries was little changed at 3.88%.
- The dollar fluctuated.
- West Texas Intermediate crude fell 0.2% to $79.49 a barrel.
- Gold futures rose 0.3% to $2,009.20 an ounce.
- Another driver of trading Wednesday was the large batch of earnings reports, with results from big tech being highly scrutinized after the shares notched a historic advance in the first six months of the year.
- Google parent Alphabet hit a 15-month high as revenue beat expectations, while Microsoft fell the most since January on a tepid sales growth and Texas Instruments’s lukewarm forecast weighed on chipmakers.
- Traders also awaited results from Facebook owner Meta Platforms after the closing bell.
- The social media giant goes into its second-quarter earnings report with a relatively inexpensive valuation that could provide a cushion against any minor misses.
- Regional banks climbed as news that PacWest Bancorp is being bought by Banc of California bolstered confidence in the industry.
- Wells Fargo paced gains in larger lenders on plans to repurchase as much as $30 billion of its shares.
Alphabet Shares Gain on Revenue Beat From Google Search – Bloomberg, 7/26/2023
- Google parent Alphabet reported second-quarter revenue that exceeded analysts’ expectations, boosted by advertising on the company’s flagship search business, which is withstanding new competition from artificial intelligence chatbots.
- Alphabet’s sales, excluding partner payouts, were $62 billion in the quarter, the company said Tuesday in a statement.
- Analysts had projected $60.2 billion, according to data compiled by Bloomberg.
- Search advertising performed well, generating $42.6 billion, compared with analysts’ average estimate of $42.2 billion.
- Google’s cloud unit brought in a profit of $395 million on sales of $8.03 billion, beating analysts’ estimates for a profit of $163 million.
- YouTube reported ad sales of $7.67 billion, compared with Wall Street’s estimate of $7.4 billion.
- Net income was $18.37 billion, or $1.44 per share, compared to Wall Street’s $1.32-per-share estimate.
- Alphabet’s Other Bets — a collection of nascent companies including the self-driving car venture Waymo and life sciences unit Verily — brought in $285 million in second-quarter revenue while narrowing its losses to $813 million.
- The company said it will continue to slow its pace of hiring, and noted that it has staffed up some generative AI projects by reassigning teams.
Microsoft Posts Tepid Sales Growth as Cloud Business Slows – Bloomberg, 7/26/2023
- Microsoft reported tepid fourth-quarter sales growth, held back by decelerating demand for cloud-computing services while the software maker waits for a revenue boost from new artificial intelligence-powered products.
- Profit in the period ended June 30 was $2.69 a share and sales rose 8% to $56.2 billion, the software maker said in a statement Tuesday.
- For the fiscal fourth quarter, analysts on average had estimated $2.56 a share in earnings and $55.5 billion in sales, according to a Bloomberg survey.
- While overall results topped analysts’ projections, Azure cloud services revenue growth slowed to 27%, excluding currency fluctuations, from 31% in the previous quarter.
- Revenue in Microsoft’s Intelligent Cloud unit, made up of Azure and server software, was $24 billion, slightly above the $23.8 billion average analysts’ prediction.
- Microsoft’s sales from Windows operating system software sold pre-installed on computers fell 12% in the June quarter, a period when global PC shipments dropped 13%, according to market research firm IDC.
- In the company’s More Personal Computing division, the unit that includes Windows software, Surface devices and Xbox businesses, sales slipped to $13.9 billion, compared with the $13.6 billion average estimate.
- In the Productivity segment, mostly Office sales, revenue rose to $18.3 billion.
- That’s slightly above the projected $18.1 billion.
- Azure revenue growth for the first quarter of fiscal 2024, which ends in September, will be 25% to 26%, excluding the impact of currency fluctuations, Microsoft Chief Financial Officer Amy Hood said on a conference call.
- Microsoft’s Xbox video-game content and services revenue gained 5% in the quarter.
Visa Card Spending Tops Estimates as Travel Demand Stays Strong – Bloomberg, 7/26/2023
- Visa reported card-spending growth that was more robust than Wall Street expected as consumer demand for travel and dining out remained strong last quarter.
- Payments volume climbed 9% to $3.17 trillion in the fiscal third quarter ended June 30, San Francisco-based Visa said Tuesday in a statement.
- That beat the $3.14 trillion average estimate of analysts surveyed by Bloomberg.
- Revenue in the period rose 12% to $8.1 billion, beating the $8.06 billion that analysts predicted.
- Adjusted net income of $4.5 billion, or $2.16 a share, was 5 cents better than estimates.
AT&T Expands Cost-Cutting Campaign by $2 Billion – Wall Street Journal, 7/26/2023
- AT&T’s wireless profit center kept growing in the second quarter, prompting executives to back an upbeat estimate of earnings through the end of the year.
- Revenue increased 0.9% to $29.9 billion as stronger mobile-phone and fiber-optic services overcame weaker sales in the shrinking business landline unit.
- The Dallas company said Wednesday it hit its target of $6 billion of yearly cost savings ahead of schedule and plans to trim another $2 billion or more off its annual expenses over the next three years.
- The new target came as AT&T continued growing the wireless business that powers most of its profits.
- The unit ended the June quarter with a net gain of 326,000 postpaid phone lines, helping increase division revenue by 2%.
- Overall profit rose to $4.49 billion from $4.16 billion a year earlier—61 cents compared with 59 cents on a per-share basis.
- AT&T affirmed its 2023 projections for 3% adjusted earnings growth and free cash flow of $16 billion or better.
Coca-Cola raises full-year outlook as earnings beat estimates – CNBC, 7/26/2023
- Coca-Cola on Wednesday raised its full-year outlook after reporting earnings and revenue that topped estimates.
- “On the positive side, many supply chain pressures eased, concern surrounding the bank sector diminished and energy prices continue to pull back from record highs,” CEO James Quincey said.
- Revenue: $11.97 billion adjusted vs. $11.75 billion expected
- The company’s organic revenue, which strips out the impact of acquisitions and divestitures, increased 11% in the quarter, fueled by higher prices.
- Its U.S. volume fell just 1%, dragged down by falling demand for its namesake soda, Powerade and bottled water.
- Coke Zero Sugar’s volume rose 5%, thanks to strong demand in North America and Latin America.
- Ultra-filtered milk brand Fairlife saw strong growth in the U.S. Coke’s coffee division also reported volume growth of 5%, fueled by Costa Coffee’s performance in the United Kingdom and China.
- Earnings per share: 78 cents adjusted vs. 72 cents expected
- For 2023, Coke now expects comparable adjusted earnings per share growth of 5% to 6%, up from its prior forecast of a 4% to 5% rise.
- The company also hiked its outlook for organic revenue and now predicts an increase of 8% to 9%, up from its previous range of 7% to 8%.
Boeing Reports $149 Million Loss as Defense Charges Pile Up – Wall Street Journal, 7/26/2023
- Boeing reported a small second-quarter loss as more charges in its defense business outweighed the benefits of rising jetliner orders and deliveries.
- Sales in the quarter rose 18% to $19.8 billion, ahead of expectations, helped by its services arm as global airline flying moves toward 95% of prepandemic levels.
- Boeing beat expectations for sales, profit and free cash flow in the quarter and kept full-year and medium-term financial guidance unchanged.
- The net loss in the quarter ended June 30 of $149 million compared with a $160 million profit in the same period last year, better than expected among analysts polled by FactSet.
- Free cash flow rose to $2.6 billion from a drain of $182 million a year earlier.
- Boeing still expects to deliver between $3 billion and $5 billion in free cash in 2023.
- The aerospace giant said it is increasing jetliner production as planned while reducing its debt.
- Boeing said it still plans to deliver as many as 450 of its 737 MAX aircraft this year and up to 80 787 Dreamliners.
- The company recorded more charges on troubled defense programs, with another $514 million in the latest quarter.
- Boeing is moving toward producing 38 of its 737 MAX jetliners a month, a key milestone to satisfy demand and customers who have faced delayed deliveries.
Snap Falls After Sales Forecast Misses Estimates on Ad Demand – Bloomberg, 7/26/2023
- Snap projected revenue in the current quarter at the lower end of analysts’ estimates, signaling that improvements to the digital advertising business are taking longer than expected to pay off. The shares fell in extended trading.
- Second-quarter revenue was $1.07 billion, the Santa Monica-based company said Tuesday in a statement.
- That topped the average estimate of $1.05 billion, according to projections compiled by Bloomberg.
- The Snapchat app is still growing, with 397 million daily users in the second quarter.
- The company posted a net loss of $377 million, less than analysts’ average estimate of a loss of $397 million.
- Sales will be $1.07 billion to $1.13 billion in the period ending in September, the company said, compared with analysts’ average projection of $1.13 billion.
- The company said it will reach 405 million to 406 million daily users in the current quarter.
TI forecasts dull third quarter on sluggish chip demand, China weakness – Reuters, 7/26/2023
- Analog chipmaker Texas Instruments forecast third-quarter revenue and profit below Wall Street targets on Tuesday, bogged down by sluggish recovery in end-market demand that has forced clients to cancel orders.
- Wobbly China recovery after the country put an end to its “zero-COVID” policy has also prevented demand from rebounding quickly.
- Despite a demand crisis, the company said it will continue ramping up supply even at the cost of its profit margin, to support long-term demand and create a “geopolitically dependable capacity”.
- Inflation and rising interest rates have eroded spending across sectors, including in the industrial segment, its key market, comprising about 40% of its revenue.
- Texas Instruments forecast revenue in the current quarter to be in the range of $4.36 billion to $4.74 billion.
- Analysts polled by Refinitiv expect revenue to come in at $4.60 billion.
- The company’s earnings per share forecast in the range of $1.68 to $1.92 fell short of expectations of $1.91.
ADP Sees FY 2024 EPS, Revenue Growth, Boding Well for Jobs Market – Market Watch, 7/26/2023
- Payroll-services company Automatic Data Processing forecast earnings and revenue growth for its fiscal year ending June 2024, in a vote of confidence to the U.S. jobs market.
- On an adjusted basis, ADP also forecast earnings growth between 10% and 12% from the fiscal 2023 level of $8.23 a share.
- ADP forecast annual revenue growth in a range of 6%-to-7% from $18 billion for the year ended June 30.
- That translates to revenue of $19.08 billion to $19.26 billion.
- ADP forecast revenue growth at its employer services unit in a range between 7% and 8%.
- The company expects PEO Services unit revenue to grow in a range between 3% and 5%.
- The Roseland, N.J., company targeted growth in earnings per share between 10% and 12% for fiscal 2024.
- ADP projected growth in adjusted earnings before interest and taxes margins in a range of 60 basis points to 80 basis points.
Teladoc Health shares rise 5% following improved outlook – Market Watch, 7/26/2023
- Teladoc Health shares rose in aftermarket trading Tuesday following its latest quarterly results and current outlook.
- Revenue climbed to $652.4 million from $592.4 million in the second quarter.
- Teladoc forecast revenue between $650 million and $675 million and a loss per-share between 40 cents and 50 cents for the third quarter.
- Analysts polled by FactSet expected $663.1 million in revenue and a loss of 33 cents a share.
- For the year ending Dec. 31, 2023, it guided for revenue between $2.6 billion and $2.68 billion and loss per-share in the range of $1.25 and $1.60.
- It previously forecast revenue between $2.58 billion and $2.68 billion and a loss between $1.25 a share and $1.70 a share.
Thermo Fisher stock drops after company trims full-year outlook – Market Watch, 7/26/2023
- Thermo Fisher Scientific shares fell premarket on Wednesday after the medical device and lab equipment maker trimmed its full-year earnings and revenue guidance.
- The company reported second-quarter revenues of $10.69 billion, versus $10.97 billion a year earlier and below the FactSet consensus of $10.99 billion.
- Adjusted earnings per share came to $5.15 in the second quarter, down from $5.51 in the year-earlier period and below the FactSet consensus of $5.43.
- “The macroeconomic environment became more challenging in the second quarter,” CEO Marc Casper said in a statement, as economic activity in China slowed and businesses across the economy became more cautious in their spending.
- The company said Wednesday that it now expects 2023 adjusted earnings per share in the range of $22.28 to $22.72, versus prior guidance of $23.70, and revenue of $43.4 billion to $44 billion, compared with previous guidance of $45.3 billion.
Hilton’s stock rises as higher occupancy and rates leads to earnings beat, upbeat outlook – Market Watch, 7/26/2023
- Shares of Hilton Worldwide Holdings tacked on toward a 14-month high in premarket trading Wednesday, after the hotel operator reported second-quarter profit and revenue that beat expectations, boosted by increases in occupancy and average daily rates.
- Total revenue grew 18.8% to $2.66 billion, above the FactSet consensus of $2.56 billion.
- Systemwide comparable revenue per available room rose 12.1%, as occupancy increased 4.2 percentage points to 74.6% and the ADR increased 5.9% to $163.47.
- Excluding nonrecurring items, adjusted earnings per share of $1.63 beat the FactSet consensus of $1.58.
- For 2023, the company expects adjusted EPS of between $5.93 and $6.06, above the FactSet consensus of $5.92.
General Dynamics profit beats estimates on military equipment demand – Reuters, 7/26/2023
- Defense contractor General Dynamics on Wednesday reported a better-than-expected quarterly profit, helped by resilient demand for military equipment, sending its shares up in premarket trading.
- Total revenue at the Reston, Virginia-based company rose 10.5% to $10.15 billion.
- Revenue at the marine systems segment, which makes ships in addition to submarines, rose 15.4%, boosted by a $1.1 billion contract from the U.S. Navy for long-lead materials and the advance construction for Block V Virginia-class submarines.
- The aerospace segment booked $2.5 billion in new orders during the quarter, driven by strong demand for the company’s Gulfstream business aircraft.
- Gulfstream deliveries in the second quarter were at 24 jets, compared with 22 in the same period a year ago.
- The company reported a backlog of $91.4 billion, compared to $87.6 billion.
- Its book-to-bill ratio, which is the ratio of orders received to units shipped and billed, was 1.2-to-1.
- Net earnings came in at $744 million, or $2.70 per share, in the quarter ended July 2, compared with $766 million, or $2.75 per share, a year earlier.
PacWest to be Sold to Banc of California In Rescue Deal – Bloomberg, 7/26/2023
- PacWest Bancorp is being bought by smaller rival Banc of California as it seeks to navigate a bout of upheaval that brought down a handful of its peers.
- Warburg Pincus and Centerbridge Partners will invest $400 million as part of the deal to obtain about 20% of the combined company and warrants to buy more shares.
- PacWest stockholders will get 0.66 of a share of Banc of California common stock for each of their shares.
- The banks will sell assets with the aim of repaying $13 billion of wholesale borrowings, the companies said Tuesday.
- Shares of Banc of California surged as much as 22% after the Wall Street Journal reported the pair were in talks.
- PacWest shares closed down 27%.
- The merger is aimed at shoring up confidence in the banks after a run on deposits struck several US regional lenders earlier this year, leading to the collapse of three California-based banks and one in New York.
- After the deal closes, the combined company will have $25.3 billion in total loans, $30.5 billion in total deposits and more than 70 branches in California, according to the statement.
- The combined bank expects to earn $1.65 to $1.80 per share next year.
UPS Reaches Tentative Labor Deal to Avoid Teamsters Strike – Bloomberg, 7/26/2023
- United Parcel Service reached a tentative agreement to renew a five-year labor contract with the Teamsters union, staving off a possible strike as soon as next week that could have paralyzed shipments throughout the US and beyond.
- The provisional deal, which needs to be ratified by the Teamsters’ 340,000-strong membership in a vote next month, could be a good omen for negotiations between labor and management across several key industries.
- The UPS negotiations are a key test of unionized workers’ leverage at a time when wage growth is outpacing inflation.
- Teamsters President Sean O’Brien cheered the deal, calling it the best ever wrung from the courier.
- The pugnacious labor leader has sought to prove his negotiating smarts ahead of talks with other corporate titans, including Amazon.com.
Equinor 2Q Earnings Fell on Lower Energy Prices — Earnings Review – Market Watch, 7/26/2023
- Equinor reported results for the second quarter on Wednesday.
- Revenue fell 37% to $22.87 billion, versus the $25.0 billion expected in a FactSet average.
- Equinor said adjusted earnings–its preferred measure–fell to $7.54 billion from $17.57 billion, against the $7.64 billion expected in a company-compiled consensus.
- Organic capital expenditure is still seen at between $10 billion and $11 billion in 2023, with an annual average of around $13 billion for 2024-26. Production in 2023 is still seen around 3% above the 2022 level.
Tilray stock surges after cannabis company improves bottom line – CNBC, 7/26/2023v
- Shares Tilray Brands spiked Wednesday after the Canadian cannabis producer reported a narrower loss for its fiscal fourth quarter than a year ago and a solid revenue beat.
- Meanwhile, revenue increased a record 20% to $184.2 million in the period, up from $153.3 million in the prior-year quarter. That came in above analysts’ expectations of $154 million, according to Refinitiv.
- Tilray said its net loss for the three months ended May 31 was $119.8 million, or 15 cents a share, an improvement from the year-ago period when it lost $457.8 million, or 99 cents a share.
- Analysts polled by Refinitiv, however, expected a loss per share of just 5 cents per share.
- The cannabis segment, which deals in the cultivation, production, distribution and sale of both medical and adult-use cannabis products, saw its revenue increase 21% to $64.4 million for the quarter.
- Tilray also saw healthy sector growth at its beverage alcohol and distribution businesses, which brought in $32.4 million and $72.6 million in revenue during the period, respectively, marking year-over-year increases of 43% and 19%.
- For its fiscal year 2024, the company is forecasting adjusted EBITDA of $68 million to $78 million, representing growth of 11% to 27% over fiscal year 2023.
Big Automakers Plan Thousands of EV Chargers in $1 Billion U.S. Push – Wall Street Journal, 7/26/2023
- A group of major automakers is planning a joint investment to build thousands of electric-vehicle chargers in the U.S., people familiar with the plan said, a bid to ease a shortage of charging spots that deters many consumers from choosing EVs.
- The companies—BMW, General Motors, Honda Motor, Hyundai Motor, Kia, Mercedes-Benz and Jeep maker Stellantis — plan to collectively invest at least $1 billion in a joint-venture company that will build out charging stations, the people said.
- The group is targeting the addition of around 30,000 fast chargers in urban and highway areas over several years.
- The joint investment is modeled after a similar charging company in Europe, Ionity, that was formed in 2017, funded by many of the same automakers.
- Those automakers and others are rushing to develop more electric cars, and have laid out plans to convert much of their vehicle lineups to EVs in coming years.
Union Pacific Names Veteran Rail Executive Jim Vena as CEO – Wall Street Journal, 7/26/2023
- Union Pacific named veteran rail executive Jim Vena chief executive, after a major shareholder called for current CEO Lance Fritz’s removal.
- Vena, who previously served as the freight-railroad operator’s chief operating officer from 2019 to 2020, will become CEO effective Aug. 14, the company said Wednesday.
- Soroban Capital Partners, a New York hedge fund, urged the company’s board to remove Fritz in February, arguing the company had underperformed under his leadership.
- The company’s revenue, meanwhile, fell 5% to $5.96 billion, as the company carried lower freight volumes and saw less income from its fuel surcharge.
- The Omaha, Neb.-based company said Wednesday that its profit declined to $1.57 billion, or $2.57 a share, from $1.84 billion, or $2.93 a share, in the year-ago quarter. Analysts polled by FactSet expected per-share earnings of $2.76.
- Fritz said in a statement that softer consumer markets and inflation ate into the company’s results in the quarter.
- The company expects those challenging conditions to continue: Union Pacific said it anticipates that its consumer-related volumes will lag through the rest of 2023.
US ECONOMY & POLITICS
US New-Home Sales Fall for First Time Since February – Bloomberg, 7/26/2023
- US new-home sales declined in June for the first time in four months, suggesting high borrowing costs and prices are restraining momentum in the market.
- Purchases of new single-family homes fell 2.5% to an annualized 697,000 pace after a downward revision to the prior month, government data showed Wednesday.
- The median estimate in a Bloomberg survey of economists called for a 725,000 rate.
- Even with the decline, sales have rebounded over the past year thanks to limited inventory of existing homes.
- The median sales price of a new home declined to $415,400 from a year earlier, but that’s well above pre-pandemic levels.
- There were 432,000 homes for sale as of the end of last month, in line with previous readings this year.
- That represents 7.4 months of supply at the current sales rate.
- Sales dropped in the Midwest to the lowest this year and in the West as well. In the South, sales rose to the highest since the end of 2021.
- The new-homes data are volatile; the report showed 90% confidence that the change in sales ranged from a 15.2% decline to a 10.2% gain.
US FAA Tightening Airliner Design Rules in Wake of Boeing 737 Max Crashes – Bloomberg, 7/26/2023
- US aviation regulators announced two new steps to tighten the process of approving airliner designs, actions required by Congress after crashes on Boeing Co. 737 Max aircraft killed 346 in 2018 and 2019.
- The Federal Aviation Administration’s policy changes will take effect in 30 days after the public and industry have a chance to comment on them, the agency said in a press release on Wednesday.
- The FAA will establish stricter requirements for plane makers to inform the agency of unusual designs that require extra scrutiny during its process of evaluating aircraft designs, it said.
Apps Like Robinhood Make Trading Fun, But SEC Fears It’s Costing Investors – Wall Street Journal, 7/26/2023
- Federal regulators want to impose new guardrails on the way retail investment firms such as Robinhood Markets use advanced analytics to encourage customers to trade, the latest in a series of policy efforts prompted by the 2021 meme-stock craze.
- The Securities and Exchange Commission plans to propose a rule Wednesday that would hold algorithms that predict, guide or forecast investors’ behavior, in certain cases, to a similar standard as investment advice.
- It would require brokers and advisers who deploy such tools to “neutralize or eliminate” conflicts of interest they create.
- The agency’s goal is to prevent emerging technologies from undermining firms’ legal obligation to act in the best interests of their clients.
- The rule proposal stems from a two-year SEC review of Wall Street’s “digital engagement practices” following the trading frenzy in GameStop and other meme stocks in early 2021.
- That episode sparked congressional hearings, a 45-page SEC staff report, and a series of sweeping proposals to change the way stock trading works behind the scenes.
EUROPE & WORLD
LVMH shares fall as second-quarter sales fail to impress – Reuters, 7/26/2023
- Shares in LVMH fell on Wednesday as an in-line increase in sales at the world’s top luxury indicated the overall sector was moving towards a less impressive path of growth.
- The French company on Tuesday reported a 17% increase in second quarter sales, a touch better than analyst expectations for 16% growth.
- LVMH’s leather goods division, home to Vuitton and Dior, grew revenue by 21% versus an expected 20% increase.
- LVMH reported a 1% fall in U.S. sales as appetite for high-end fashion and leather goods slowed there as well as lower-than-expected margins due to high marketing spending.
CN Railway Cuts Outlook on Consumer Slowdown – Bloomberg, 7/26/2023
- Canadian National Railway cut its outlook for the year, saying demand is weakening for consumer goods, a clear signal of an economic slowdown.
- The Montreal-based company reported revenue of C$4.06 billion ($3.1 billion) in the second quarter, down 7% and missing analysts’ estimates.
- Earnings fell 9% on an adjusted basis to C$1.76 per share, or 4 cents below the consensus of analysts compiled by Bloomberg.
- The railway now expects earnings per share will be flat or slightly down this year compared with 2022.
- Previously, it expected to grow by mid-single digits.
Rolls-Royce shares soar 19% after engine-maker raises guidance – CNBC, 7/26/2023
- Shares of Rolls-Royce rocketed to their highest level since the start of the pandemic Wednesday morning after the British aerospace and defense firm raised its full-year profit guidance and said it would vastly outperform expectations for its half-year results.
- The company said it now anticipates full-year underlying operating profit will sit between £1.2 billion ($1.55 billion) and £1.4 billion, up from a previous guidance of £800 million to £1 billion, as the impact of a vast cost-cutting and business “transformation” program takes effect earlier than predicted.
- Market consensus is currently for a £934 million underlying operating profit, the company said.
- It added that it sees its first-half underlying operating profit, due August 3, coming in at just over double analyst expectations of £328 million.
Jeep, Dodge maker Stellantis posts first-half revenue jump, confirms 2023 guidance – CNBC, 7/26/2023
- Carmaker Stellantis on Wednesday posted a 12% year-on-year jump in net revenues and 37% spike in net profit for the first half of 2023, boosted by higher shipments.
- Global battery electric vehicle (BEV) and low emission vehicle (LEV) sales were up 24% and 28% year-on-year to 169,000 units and 315,000 units, respectively.
- The manufacturer of Jeep, Dodge, Peugeot and other brands recorded second-quarter net revenues of 98.4 billion euros ($108.8 billion) and a net profit of 10.9 billion euros.
- The company confirmed its 2023 guidance while raising its growth outlook in Europe and the Middle East & Africa from 5% to 7%.
SK Hynix posts narrower second-quarter loss amid robust AI demand, sees chip recovery – CNBC, 7/26/2023
- South Korean chipmaker SK Hynix posted a second-quarter operating loss of 2.88 trillion Korean won ($2.24 billion) on Wednesday as demand for memory chips remained sluggish.
- Revenue increased in the second quarter to 7.31 trillion Korean won, up 44% from the first quarter of 5.08 trillion Korean won.
- SK Hynix said the weak memory chip market is on the road to recovery amid robust artificial intelligence demand, which resulted in a smaller second-quarter operating loss.
- The quarterly losses were narrower than the 3.4 trillion Korean won in the previous quarter which ended in March, and compared to a 4.2 trillion won profit from a year ago.
- That’s compared with expectations for a 2.7 trillion won operating loss, according to Refinitiv estimates, weighted toward analysts that are more consistently accurate.
Volkswagen Takes $700 Million Xpeng Stake for EV Pact to Win Back China – Bloomberg, 7/26/2023
- Volkswagen plans to invest $700 million in Xpeng Inc. and jointly develop electric vehicles in China as the German automaker fights to halt a sales slide in its most important market.
- VW will eventually hold a 4.99% stake in the Chinese company via a capital increase and is getting an observer board seat, it said Wednesday.
- Its Audi premium brand will deepen ties with VW’s long-term partner SAIC Motor to also bolster its EV lineup.
- Audi’s partnership with SAIC will cover premium EVs and start with models in a segment where the brand isn’t yet represented in China.
China Probed Covid-19 Policy Leaks by Ex-Government Officials – Wall Street Journal, 7/26/2023
- China’s heightened scrutiny of the expert-network firms that investors and international businesses rely on for information about the country began much earlier than is commonly believed.
- Last autumn, in a previously unreported investigation, national-security agents showed up at some of those firms looking to track down leaks around China’s highly sensitive Covid policies and vaccine strategy.
- The investigators asked people at one consulting firm in Shanghai if they had arranged meetings or calls with experts who had inside knowledge of the country’s healthcare policy, according to a person familiar with the matter.
- The investigators presented a list of names of experts, as well as times and dates of meetings at which those individuals spoke, the person said.
- The list included a former policy researcher at a regional outpost of China’s National Health Commission, the person said, adding that the investigators wanted to know who had been asking for the information and what the consulting firm’s clients wanted to know.
North Korea Hasn’t Answered U.S.’s Calls on Detained Soldier Travis King – Wall Street Journal, 7/26/2023
- The U.S. has reached out to North Korea about an American soldier who crossed the border from South Korea last week, but so far Pyongyang hasn’t responded, U.S. officials said.
- British Army Lieutenant General Andrew Harrison told a briefing on Monday that the U.S. has attempted to have conversations with the North Koreans using a communications line established under the armistice agreement that ended combat in the 1950-53 Korean War.
- U.S. officials said that the U.S. had reached out through at least two channels, but that Pyongyang hadn’t engaged.
- “We have relayed messages through multiple channels to [North Korea] that the individual crossed on his own and we want him returned quickly and safely,” a U.S. official said. “We also asked for more information on his welfare.” The official said that the U.S. knows the message has been received by the North Koreans, but wouldn’t elaborate further.
- The United Nations command in Seoul, which is led by an American general who also leads U.S. Forces Korea, has made attempts to reach out to Pyongyang.
- The White House, using Sweden as an intermediary, has also made similar attempts, officials said.
- A spokesman for the U.S. State Department also said the U.N. and the North Koreans hadn’t been in regular contact since King’s initial flight.
Russia Gas Output Down 13% in First Half After EU Exports Cut – Bloomberg, 7/26/2023
- Russia’s natural gas production in the first half was almost 13% lower than a year earlier following the Kremlin’s decision to halt pipeline exports to many countries in Europe, its biggest market.
- Russian producers pumped 319.3 billion cubic meters of gas in the first half of the year, according to industry data seen by Bloomberg.
- The country started to significantly reduce gas output last year after halting most pipeline exports to Europe amid the Kremlin’s standoff with the west over the invasion of Ukraine.
- Russia produced 42.8 billion cubic meters of gas in June, down 8.6% from the same month a year earlier.
- Novatek PJSC, the nation’s second-biggest gas producer which mainly supplies liquefied natural gas, reduced its output by 1.9% to 39.8 billion cubic meters in the period.
- Rosneft PJSC, which doesn’t export any gas, increased its production by 44% to 32.7 billion cubic meters, Bloomberg calculations show.
- New York became the 11th state in the United States. – 1788
- Liberia became Africa’s first republic. – 1847
- The Office of the Chief Examiner, which in 1935 became the Federal Bureau of Investigation (FBI), was created. – 1908
- President Harry S Truman signed the National Security Act, creating the Department of Defense, the National Security Council, the Central Intelligence Agency, and the Joint Chiefs of Staff. – 1947
- Fidel Castro was among a group of rebelling anti-Batistas who unsuccessfully attacked an army barracks. – 1953