Plus, Comcast shares slump on lack of broadband growth
| For October 27, 2023 |  |
| Here's your daily business briefing. - 💰 Amazon's revenue surges 13%
- 🍲 Deep Dive: U.S. food giants offer deals as consumers resist high prices
- 🚬 Altria revenue declines due to illicit e-vapor products
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thank you!! Shriram
p/Shriram | |
| 1 | | Amazon surpassed analyst estimates in the third quarter, reporting $143.1B in revenue, a 13% YoY growth. Amazon Web Services (AWS) saw a 12% increase in quarterly sales, hitting $23.1B, and quarterly profits of $9.9B, exceeding projections. More: - Revenue from advertising for the business increased dramatically to $12.1B, a 26% rise over the same quarter last year.
- North American revenues saw a strong performance, increasing by 11% over the previous year to $87.9B.
- Following the earnings release, Amazon's shares first increased by more than 3% in after-hours trading.
- In 2023, the American multinational technology company's stock rose by about 40%, outpacing the S&P 500 and the Nasdaq index.
- The company's substantial sales increase indicates a successful recovery in revenue growth and comes after cost-cutting measures and a difficult 2022.
|     | |
| 2 | | 
What the numbers say: According to NielsenIQ statistics, overall food sales in the U.S. by unit for the 52 weeks ending on October 7 were 2% lower than during the same time last year. Despite a surge in food sales on promotion in grocery stores, consumers are paying over 30% more for their groceries than in 2019, contributing to a 19% decline in the S&P 500 Packaged Foods & Meats subindex this year. Relevance: Under pressure from growing food costs, consumers are preparing more meals at home, depleting their pantries, and consuming more leftovers. Food companies face difficulties as worries about diminishing sales volumes impact their stock values. More data: U.S. supermarket prices increased by 2.4% from the previous year in September, and restaurant prices rose by 6%. Some food makers are offering deals to attract cost-conscious consumers, anticipating improved spending next year as wages rise, but consumers are still scaling back on dining out despite promotions. | | | |
| 3 | | The dwindling demand in its primary cigarette business and competition from illegal e-vapor products caused Altria Group to publish Q3 results that fell short of Wall Street estimates. Year-over-year, overall revenue dropped 4.1% to $6.28B, with net earnings at $2.17B, or $1.22 per share, a significant increase from $224M, or $0.12 per share, in the prior year. More: - Earnings per share came in at $1.28, slightly below the anticipated $1.29, while revenue stood at $5.28B, falling short of the expected $5.43B.
- The Virginia-based firm has reduced its full-year adjusted EPS guidance for 2023 from $4.91 to $4.98.
- The company announced a notable 11.6% drop in domestic cigarette shipments, mainly due to competition from illegal e-vapor products and more significant industry reductions.
- CEO Billy Gifford pointed to what he called the FDA's "inadequate and ineffective" law enforcement as hurting legitimate e-vapor product sellers.
| | | |
| 4 | | Comcast's Q3 report led to an 8% drop in shares due to a loss of 18,000 residential broadband customers, and Q4 losses are anticipated, partly attributed to a slower housing market and competition from wireless providers. However, Comcast's approach doesn't involve price wars with competitors but emphasizes network enhancements and financial responsibility. More: - Home broadband ARPU increased by 3.9% in the quarter, demonstrating the company's focus on broadband average revenue per user (ARPU) growth driven by price hikes and package upselling.
- Owned by Comcast, NBCUniversal has seen growth in theme park income and has added 4 million new users to its Peacock streaming service in the last quarter.
- The Philadelphia-based firm aims to return to growth without providing a date, but investors are concerned about the company's broadband growth and guidance.
- With 32.3 million subscribers, Comcast's broadband revenue for the quarter was $6.4B, while its wireless income came from 6.3 million users and was $917M.
| | | |
| 5 | | Hasbro and Mattel reduced their Q4 sales forecasts due to a challenging retail landscape and consumer spending cutbacks, leading to a 12% drop in Hasbro's stock and an 8% decline in Mattel's stock. Despite Mattel's solid third-quarter performance, the company's fourth-quarter outlook missed estimates, and Hasbro's predicted annual revenue reduction is estimated to be between 13% and 15% — a substantial decrease from its earlier estimate of 3% to 6%. More: - With adjusted profits per share of $1.64 (compared to $1.70 expected) and revenue of $1.5B (compared to $1.64B expected), Hasbro's third-quarter report failed to meet analyst expectations.
- Barbie sales were a significant factor in Mattel's 9% revenue growth.
- Hasbro reported a 10% decrease in revenue in the quarter, primarily in its consumer and entertainment segments, with the consumer segment, including brands like Nerf, My Little Pony, and Transformers, experiencing an 18% sales drop.
- The writers' and actors' strikes and the $500M sale of Hasbro's film and TV division eOne to Lionsgate caused a 42% decline in the company's entertainment segment revenue.
| | | |
| 6 | | Quick Hits: - Improve conversations with clear speech understanding and quick sound processing from Horizon hearing aids. Start your 45-day, no-risk trial today.*
- BP has made a deal to buy $100M worth of electric vehicle chargers from Tesla, representing Tesla's first sale of chargers to another company.
- The UAW and Ford have reached a tentative agreement, potentially resolving a six-week strike, and it includes a 25% pay increase over the agreement's duration.
- Wex Inc. is acquiring Payzer LLC for approximately $250M, with an additional $11M contingent on performance metrics, as announced on Thursday.
- Bloomberg reported Taylor Swift's net worth is now $1.1B, largely boosted by her record-breaking "Eras" tour that contributed to the U.S. economy this summer.
*This is a sponsored listing. | | | |
| Upcoming Events | * This is a sponsored event | | | |
Term of the Day Generative art: Generative art is a style of digital art created using an algorithm or set of rules defined by the artist. Question of the Week What's one tool or app that has significantly made your life easier at work? Join the conversation |
INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
| |
| |
