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| Hello Insiders!! Today's Business newsletter covers: - 🤖 Foxconn and Nvidia to build AI factories
- 🍺 Deep Dive: Non-alcoholic beer sales soar
- ✈️ United Airlines profits to fall due to fuel costs and Middle East war
If you enjoy reading this newsletter, please share it with your friends and colleagues. Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thank you!! Shriram
p/Shriram | |
| 1 | | Foxconn, headquartered in Taiwan, is partnering with Nvidia to establish AI data factories for electric vehicle manufacturing, as disclosed by Foxconn Chairman Young Liu and Nvidia CEO Jensen Huang in Taipei. This collaboration will leverage Nvidia's technology to bolster AI capabilities in Foxconn's electric vehicles, employing advanced computing systems to develop software platforms for the next generation of EVs through continuous learning from real-world interactions. More: - Foxconn, well-known for assembling Apple products, makes electric vehicles (EVs) for customers rather than marketing them under its name.
- Foxconn has diversified into the competitive electric vehicle market, introducing a range of EV vehicles like buses and passenger cars, cargo vans, and small SUVs.
- The company plans to be a major player in the expanding electric vehicle market, which is expected to reach almost 14 million units globally in 2023 after surpassing 10 million units in 2022.
- With experience in consumer electronics, Foxconn's entry into the EV market is considered a logical diversification and might result in cutting-edge EV products.
Zoom Out: Q: How will Foxconn's AI data factory partnership with Nvidia impact the electric vehicle industry? Join the conversation here. |     | |
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What the numbers say: Sales of non-alcoholic beer increased significantly in the U.S., rising 32% in the last year and 31% on average over the previous four years. With an approximately 20% market share, Heineken 0.0 is now the top brand in this category. The flavor of non-alcoholic beer has been able to resemble ordinary beer because of developments in brewing technology, with about 60% of sales representing new growth rather than replacing existing sales. Relevance: The surge in non-alcoholic beer sales is driven by improved taste, changing generational drinking habits, and alignment with health and wellness trends. This provides new consumption opportunities, with big beer companies like Heineken and AB InBev investing to cater to evolving consumer preferences. Where to see impact: Younger consumers are driving significant growth in non-alcoholic beer sales in the U.S. and worldwide, prompting major breweries to expand their non-alcoholic beer product lines. The ongoing decline in youth drinking habits is expected to continue influencing the beverage industry's strategies, with 62% of 18 to 34-year-olds in the U.S. identifying as drinkers between 2021 and 2023, down from 72% two decades earlier. | | | |
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| 3 | | In its Q3 report, United Airlines' total revenue is $14.48B, a little more than projected, while adjusted earnings per share is $3.65 instead of $3.35 as predicted. The Israel-Hamas conflict and increasing fuel prices are projected to result in a 10% decrease in United Airlines' earnings. More: - After the announcement, shares of the company dropped 9.7%, reaching a one-year low of $36.24.
- Major U.S. airport jet fuel prices have increased by over 25% since the summer, and United's Tel Aviv flights, which account for 2% of its total capacity, have experienced difficulties due to the conflict.
- CEO Scott Kirby ascribed higher expenditures to labor costs, postponed aircraft deliveries, and a scarcity of air traffic controllers.
- The Chicago-based firm predicts adjusted earnings for the entire year to be between $9.55 and $9.85 per share, which is less than earlier estimates.
- Additionally, the firm expects adjusted earnings for the fourth quarter to be between $1.50 to $1.80 per share, which falls short of analysts' $2.06 projection.
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| 4 | | J.B. Hunt Transport Services, a prominent domestic operator, saw a notable Q3 profit decrease by over 30% to $187.4M, or $1.80 per share, compared to $269.4M, or $2.57 per share, in the previous year. The company missed analyst expectations for per-share earnings of $1.82, and revenue dropped by 18% to $3.16B, slightly falling short of the anticipated $3.17B. More: - Revenue per load in J.B. Hunt's truckload and intermodal segments decreased, which was the leading cause of the revenue drop.
- The intermodal industry's largest segment saw a 41% decline in operating income to $128M despite a 1% increase in freight volume.
- There was a 20% decline in stops in J.B. Hunt's final mile services sector and a 38% decline in volumes in its freight brokerage segment.
- J.B. Hunt's earnings report is the first in a series of fall reports within the trucking industry, which has experienced decreased demand in 2023 as retailers aim to reduce their inventories following excess stockpiling in 2022.
- According to the Cass Freight Index, freight prices fell by 20.4% in September of last year over the same month the previous year, with some indications that truckload costs may be leveling out.
- Following the earnings release, J.B. Hunt's shares dropped 4% to $188.21 in after-hours trade.
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| 6 | | StubHub is projecting a 60% rise in NBA ticket sales for the upcoming season compared to the previous one. The surge in international interest is evident, with fans from 92 countries preparing to attend North American games, resulting in a 120% increase in global ticket sales, with countries like Australia, the U.K., and Brazil leading the way. More: - The most in-demand club for the next season is the Los Angeles Lakers, led by LeBron James and Anthony Davis.
- The defending NBA champion Denver Nuggets aren't among the top 10 most sought-after teams, but StubHub predicts their appeal will grow as the season progresses.
- The Milwaukee Bucks' acquisition of Damian Lillard significantly increased ticket sales for the team, with their home opener predicted to be the most in-demand match of the year.
- The team with the highest average ticket price for its away games is the Golden State Warriors, led by star guards Chris Paul and Stephen Curry.
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| 7 | | Quick Hits: - Don't settle for the sidelines. Participate in Sandhill Markets' auctions and bid on shares of pre-IPO giants like Stripe, Databricks, Andruil, and OpenAI.*
- Lucid Group reported that it delivered 1,457 Air sedans in Q3, causing a 5% decline in its shares as investor concerns about demand for luxury electric vehicles persist.
- Ron Vachris, COO and a longtime insider who began his career driving forklifts four decades ago, has been chosen to succeed the longtime CEO of Costco, with his appointment effective in January.
- Ford predicts $1B in fines from 2027 to 2032 under stricter fuel economy rules, particularly impacting SUV and truck makers, according to the company's federal filing.
- Universal Music has filed a lawsuit against Anthropic, alleging that their Claude chatbot used unauthorized scraping of songs to create "nearly identical" copies of lyrics through AI generation.
- Final day to invest in LiquidPiston is 10/24. Become a LiquidPiston investor before it's too late.*
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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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