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| Here's your daily business briefing. - 💰 Disney cuts costs, beats profit expectations
- 🚜 Deep Dive: Caterpillar tumbles on shrinking orders
- 🍕 Yum Brands hurt by Pizza Hut sales slump
Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thank you!! Shriram
p/Shriram | |
| 1 | | Disney's latest quarter saw a better-than-expected profit, reporting earnings per share of $0.82, surpassing the anticipated $0.70. However, revenue slightly falls short at $21.24B, missing the estimated $21.33B, driven by a decline in ad revenue, notably from ABC Network and owned TV stations. More: - To reduce costs by $7.5B, the firm announced an extra $2B boost in cost-cutting efforts.
- Disney+'s subscriber base is still growing; in the quarter, it added 7 million new members, bringing its total to 150.2 million, including Hotstar.
- Compared to the prior year, the streaming industry's losses have decreased.
- Due to increased attendance and ticket pricing in domestic and foreign parks, Disney's experience division saw a 13% gain in income to $8.16B.
- The company anticipates the combined streaming businesses will profit in the 2024 fiscal fourth quarter.
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| 2 | | 
What the numbers say: Caterpillar's stock hit its lowest point since June, following a year-on-year decline of $1.9B in order backlog for the third quarter. With an intraday decrease of up to 7.2%, Caterpillar's shares saw their most significant drop since April 2022. Despite surpassing analyst expectations in sales and prices, the shrinking backlog raises concerns about potential economic challenges impacting the company. Relevance: Caterpillar, a key economic indicator, suggests market trends with its global presence in the construction, mining, and energy sectors. The dip in the order backlog signals a potential shift in economic conditions after years of robust post-pandemic sales growth. More data: Growing dealer inventories and a 15% year-on-year decline in orders raise concerns among analysts about a potential slowdown in Caterpillar's sales and earnings growth for the fourth quarter. Caterpillar executives attribute the dip in the order book to post-pandemic business normalization, citing improved supply chain conditions and lead times. | | | |
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| 3 | | Yum Brands surpassed Q3 earnings expectations with adjusted earnings per share at $1.44, beating the anticipated $1.28. However, the company's quarterly revenue of $1.71B fell slightly short of Wall Street's estimate of $1.77B, and the net income for Q3 reached $416M, or $1.46 per share, compared to $331M, or $1.14 per share, a year earlier. More: - Yum's same-store sales increased 6% during the quarter, propelled by robust results at KFC's overseas eateries and Taco Bell's U.S. outlets.
- With the introduction of approximately 1,100 new locations during the quarter, Yum's restaurant footprint increased by 6%.
- Overall, same-store sales at KFC are up 6%, with overseas markets seeing growth of 7%, led by China.
- Taco Bell announces same-store sales growth of 8%, above projections of 6.3%, fueled by strong demand from American consumers across all income levels.
- Pizza Hut's same-store sales rose by 1%, falling short of estimates at 1.7%, with international locations reporting 2% growth and U.S. locations flat.
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| 4 | | In Q3, the grocery delivery company Instacart experienced a 6% YoY increase in gross transaction value (GTV) to $7.49B, surpassing the estimated $7.46B. Instacart anticipates Q4 adjusted EBITDA between $165M and $175M, exceeding analysts' projections of $155.6M, and introduces a $500M share repurchase program. More: - Instacart exceeded revenue expectations for the third quarter, reaching $764M compared to the forecasted $736.9M, with a 4% increase in total orders during the same period.
- Instacart reported a third-quarter net loss of $2B, or $20.86 per share, primarily attributed to stock-based compensation expenses related to its initial public offering.
- Maplebear, Instacart's formal name, outperformed Q3 revenue expectations, buoyed by higher delivery and service fees and advertising revenue from packaged goods companies seeking a broader audience.
- CEO Fidji Simo identifies critical advantages over more recent competitors in the market.
- For 2023, Instacart anticipates mid-single-digit growth in GTV and three times higher adjusted EBITDA than the $187M in 2022.
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| 6 | | Vivid Seats, the online ticket marketplace, is set to acquire Vegas.com in a cash-and-stock deal valued at approximately $240M, consisting of $151.2M in cash and $88.8M in Vivid Seats' Class-A common stock. Vegas.com offers consumers information on shows, attractions, and tours in Las Vegas, along with booking assistance for flights and hotels. More: - Chicago-based Vivid Seats owns the fantasy sports app Vivid Picks and provides a broad selection of event tickets online across North America.
- The Los Angeles Clippers of the NBA and ESPN have partnered with Vivid Seats for official ticketing.
- Through the acquisition, Vivid Seats hopes to strengthen its position in Las Vegas and increase the size of its addressable market by more than $6B.
- With a market valuation of over $1.2B, Vivid Seats went public in 2021 through a special-purpose acquisition company.
- The company's share price has dropped 15% this year, indicating investor apprehension over the demand for live events following COVID-19.
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| 7 | | Quick Hits: - Bike Friday is on! Upway sells discounted e-bikes from top brands, rigorously inspected and certified by master mechanics. Get discounts of up to $1,000 on a selection of e-Bikes!*
- Starting next year, Meta, the parent company of Instagram and Facebook, will require political advertisers globally to disclose the use of artificial intelligence in their ads as part of a broader effort to combat "deepfakes" and misleading digital content.
- Google, under Alphabet, has abandoned a $15B real estate development project in Silicon Valley, canceling plans for homes, offices, and retail space.
- Maersk is cutting over 10,000 jobs due to a surplus of ships and decreased demand for seaborne trade following the end of the pandemic-driven cargo boom.
- BlackSky, the satellite imagery venture, turned a profit in the third quarter, reporting a net income of $0.68M, a positive shift from the $13.1M net loss recorded during the same period last year.
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Term of the Day Social democracy: Social democracy is a political ideology that seeks to promote economic and social justice through government intervention. Question of the Week What perks would convince you to return to the office? Join the conversation |
 | 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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