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| Here's your daily business briefing. - 🥤 Coke beats earnings, raises outlook
- 🌏 Deep Dive: P&G's global sales rebound, but China lags
- 🚗 GM Q3 beats but pulls FY guidance due to UAW strike
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thank you!! Shriram
p/Shriram | |
| 1 | | Coca-Cola outperformed in Q3 with adjusted earnings per share of $0.74, exceeding the expected $0.69, and reported revenue of $11.91B, surpassing the expected $11.44B. The company's net income attributable to shareholders rose YoY from $2.83B to $3.09B. More: - Organic revenue increased by 11%, contributing to an 8% increase in adjusted sales to $11.91B.
- Despite a 9% increase in product prices compared to the previous year, Coca-Cola managed a 2% growth in unit case volume for the quarter.
- Coke Zero Sugar and Fairlife dairy drink sales increased while the company's volume remained unchanged in North America.
- In contrast, Pepsi revealed that its beverage volume in North America decreased by 6% during the third quarter.
- In 2023, Coca-Cola expects organic sales growth of 10% to 11% and comparable earnings per share growth of 7% to 8%.
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| 2 | | 
What the numbers say: In Q3 2023, Procter & Gamble (P&G) recorded a 7% rise in organic sales, attributed to price hikes, despite a 1% decline in underlying volumes. Organic sales fell by 6% in Greater China, with SK-II, a high-end skincare brand, seeing a particularly steep dip. Relevance: Better-than-expected economic figures from Chinese authorities show a 4.9% increase in GDP in Q3 2023, contrasting with P&G's challenges in Greater China. The business predicts a return to overall positive volume growth in the following two quarters; therefore, it expects the price to play a more minor role in sales growth. More data: According to P&G, there are 450 million middle-class consumers in China, and over the next five years, it is anticipated that this number will rise to over 700 million. Although Greater China accounts for 9% of P&G's global revenues, North America accounts for 50% of the company's sales. | | | |
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| 3 | | General Motors (GM) exceeded Q3 earnings expectations despite ongoing UAW strikes, with adjusted earnings per share at $2.28 (compared to the estimated $1.88) and revenue totaling $44.13B (above the estimated $43.68B). The UAW strikes impacted GM's pretax earnings by around $800M, including $200M in Q3. More: - GM's net income attributable to shareholders dropped 7.3% compared to the previous year.
- After the announcement, GM's stock fluctuated, reaching a new 52-week low at one point and closing on Tuesday at $28.56, down 2.3%.
- In Q3, GM's North American adjusted earnings dropped by 9.5% to $3.53B year-on-year, international operations saw a 7% earnings increase to $357M, and equity income from Chinese operations fell by about 42% to $192M.
- CFO Paul Jacobson stated, "Due to lower-than-anticipated demand, GM is modifying its near-term electric vehicle ambitions; nevertheless, it is keeping its long-term objectives of double-digit profit margins on EVs and expanded production capacity."
- General Motors retracted its previously stated earnings guidance for the year due to volatility caused by strikes.
- Despite difficulties in Greater China, GM has a favorable long-term outlook for the Chinese market.
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| 4 | | In Q3, Spotify achieved an unexpected profit of $68.9M, its first in 18 months, attributed to reduced marketing and personnel expenses, which involved laying off 200 employees. Additionally, the company's 11% YoY revenue growth was influenced by subscription price increases implemented earlier in the year. More: - Spotify exceeded Wall Street expectations in Q3 with $0.35 per share earnings, $3.54B in revenue, and 226 million premium subscribers.
- During the quarter, the company generated $471m in ad-supported income, up 16% year over year, with 574 million monthly active users.
- With its entry into the audiobook industry, Spotify now provides its users access to over 150,000 audiobooks in the U.K., Australia, and the U.S.
- According to analysts, Spotify is a pioneer in the audio industry and will remain profitable through 2024 and the fourth quarter.
Zoom out: - It's Spotify's most recent venture into an audio format other than music, following its 2015 podcast venture.
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| 6 | | Despite concerns about an economic slowdown and rising living costs, Visa reported better-than-expected Q4 profits, driven by a rebound in post-pandemic travel. The company's optimistic outlook at a macro level, combined with a 9% increase in payment volumes for the quarter, reflects the strength of consumer spending bolstered by low unemployment and wage growth. More: - Chris Suh, CFO at Visa, reported that inbound travel from the U.S. recovered more quickly during the quarter, while travel to Asia increased.
- The indicator of demand for travel, cross-border volumes, which do not include transactions within Europe, increased by 18%.
- Against estimates of $2.24 per share, Visa's adjusted profit for the quarter came in at $2.33 per share.
- In addition to authorizing a new $25B multi-year share repurchase program, the business increased its quarterly dividend by 16% to $0.52 per share.
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- Ted Pick, a banking veteran, will take over as CEO of Morgan Stanley on Jan. 1, succeeding long-time CEO James Gorman, who will continue as the bank's executive chairman.
- U.S. jobless claims rose to 210,000 last week but remain historically low, reflecting a robust labor market amidst high interest rates and inflation.
- Pfizer's combined COVID and flu vaccine candidates are advancing to a final-stage trial after promising initial results, with plans to potentially launch the vaccine in 2024.
- Toyota has issued a recall on 751,000 big SUVs, including hybrid versions, in the U.S. in order to address problems with the tabs on the front bumper.
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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 | |
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