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| Here’s your daily business briefing. - 🎃 Hershey looks for strong Halloween sales
- 📊 Deep Dive: China’s risky investigation into Foxconn
- 💰 BMS earnings beat expectations despite generics
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thank you!! Shriram
p/Shriram | |
| 1 | | Hershey depends on Halloween shoppers for candy sales, including popular brands like Reese's and Kit Kat, with this year's sales showing a slower trend compared to previous years as customers have delayed their purchases closer to the holiday. While Halloween sales in the chocolate and non-chocolate categories have been slightly slower, Hershey's overall retail sales for Halloween are marginally higher than the previous year. More: - For candy companies, Halloween is vital, and Hershey's gets between 25 and 30% of its annual revenue from Halloween-related events.
- Sales of Hershey's regular chocolate have decreased, and the increase in everyday chocolate sales has slowed down as of the third quarter.
- The organization observed that when finances get tighter, consumers' top concerns are value and affordability, which forces changes to pricing and retail tactics.
- Strong demand and a cocoa shortage have caused prices to rise consistently, which might mean more significant costs and possibly price increases for businesses like Hershey.
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| 2 | | 
What the numbers say: In the electronics manufacturing services sector, returns on invested capital have declined internationally, from 12% in 2018 to 9%. Multinational companies, including Apple, are exploring alternative manufacturing hubs in India and Vietnam amid rising geopolitical tensions and the need for risk diversification, with complex factors like advanced parts manufacturing shifting to Chinese companies and declining foreign investment in China. Relevance: Apple and its suppliers have been pivotal in the U.S.-China economic partnership, where China's share of U.S. smartphone imports decreased from 85% in 2021 to about 75% in 2022. An investigation into Foxconn might influence diversification incentives, potentially speeding up the shift of manufacturers and clients to other nations due to policy unpredictability in China. More data: Approximately 98% of smartphones purchased in India in 2022 were domestically produced, marking an increase in China's electronics exports to India and Southeast Asia, while foreign investments in China have seen a decline early in 2023. | | | |
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| 3 | | Bristol Myers Squibb beat earnings expectations in Q3 with adjusted earnings per share of $2, while its revenue was $10.96B, down 2% from the previous year. The decline was primarily attributed to a 41% drop in sales of the blood cancer drug Revlimid, influenced by generic competition and increased patient access. More: - For the same period last year, the company's net income was $1.61B, or $0.75 per share, while this year's net income was $1.93B, or $0.93 per share.
- The New Jersey-based firm's stock is down more than 26% for the year and closed more than 6% down, hitting a new 52-week low.
- CEO Christopher Boerner revised his original estimate of $10B to $13B in revenues for 2025 and pushed back the date for the new pharmaceuticals to reach $10B in sales to 2026.
- Bristol Myers lowered its adjusted earnings forecast for the entire year to between $7.50 and $7.65 per share and restated its prediction for a low single-digit percentage fall in revenue.
- The American multinational pharmaceutical company updated its revenue projection and full-year profitability outlook for Revlimid, estimating $6B in sales for the medication.
- Eliquis and Opdivo had sales of $2.71B and $2.28B, respectively, while sales of more recent drugs, such as the prescription anemia therapy Reblozyl and the skin cancer drug Opdualag, increased.
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| 4 | | Boeing reported its Q3 results with an adjusted loss per share of $3.26, slightly worse than the expected $2.96, while revenue reached $18.10B, just above the anticipated $18.01B, marking a 13% increase from the previous year's same quarter. Boeing reduced its 2023 737 Max delivery forecast to 375–400 planes (previously 400–450) due to production issues but maintained its 2023 free cash flow projection at $3B–$5B. More: - Dave Calhoun, CEO of Boeing, highlighted a commitment to openly addressing and resolving all production concerns.
- Although sales of Boeing's commercial aircraft division increased by 25% to $7.88B, the company's operating margin was negative at 8.6% due to lower production costs and fewer 737 deliveries.
- At the end of the year, Boeing intends to boost 737 production to 38 aircraft per month and switch to Dreamliner manufacturing at a rate of five aircraft per month.
- Production issues stem from misdrilled holes in 737 Max fuselages manufactured by top-tier aerostructures company Spirit AeroSystems.
- The defense unit incurred losses, including a $482M loss on the Air Force One program due to cost estimates and labor issues and a $315M loss on a satellite contract.
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| 6 | | Merck outperformed expectations in Q3, with adjusted earnings per share of $2.13 ($1.95 expected) and revenue of $15.96B ($15.32B expected), marking a 7% increase from the previous year. Keytruda, Gardasil, and Lagevrio contributed significantly to the strong performance. More: - Merck increased its full-year sales forecast to $59.7B-$60.2B but reduced its adjusted profit guidance due to charges related to collaborations and acquisitions.
- The Rahway-based firm's stock closed up almost 2% on Thursday but has declined by 5% over the year.
- Keytruda's $6.34B in revenue was driven by a robust global demand for treatment for metastatic cancer, an increase of 17% YoY.
- Surpassing analyst forecasts, Lagevrio, the COVID-19 antiviral therapy, contributed $640M in sales for the quarter.
- After removing Lagevrio, the company's pharmaceutical division reported $14.26B in revenue, representing a 9% gain.
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| 7 | | Quick Hits: - Are you getting the best discounts from leading cloud providers? This is your go-to resource for learning how to maximize multicloud discounts.*
- As Microsoft enters a "new era of AI," Takeshi Numoto, a cloud marketing veteran, replaces Chris Capossela as CMO after his 32-year tenure with the tech giant.
- Healthpeak Properties Inc. is set to acquire Physicians Realty Trust in an all-stock deal, creating a company with a 52 million-square-foot real estate portfolio, with the purchase price estimated at around $2.64B based on Physicians' closing price.
- Western Digital is planning to split its traditional hard drive and flash-memory businesses into separate companies, aiming to enhance their focus, according to CEO David Goeckeler.
- Google CEO Sundar Pichai defended the firm in the significant antitrust trial where the U.S. government is seeking to prove that Google unlawfully monopolized online search, reminiscent of the 1990s Microsoft case.
- Create a winning SaaS business plan and calculate your break-even point. Join the 1-Page SaaS Blueprint Challenge to map out your startup.*
*This is sponsored content. | | | |
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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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