| Here’s your daily business briefing. - 🎥 Warner Bros. Discovery Q1 misses
- 🔍 Deep Dive: GM aims to rebound in China after 20-year low
- 🏡 Airbnb cautious post-Easter profits
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Warner Bros. Discovery's ($WBD) first-quarter results fell below analyst forecasts for revenue and earnings, with a loss per share of $0.40 compared to the expected $0.24 and revenue totaling $9.96B, missing the anticipated $10.23B. Despite this, the company's net loss attributable to Warner Bros. Discovery improved to $966M, or $0.40 per share, from $1.07B, or $0.44 per share, in the previous year's quarter. More: - During the quarter, Warner Bros. Discovery gained 2 million direct-to-consumer streaming subscribers, reaching 99.6 million.
- The streaming segment generated an adjusted income of $86M, with revenue experiencing a "modest" increase to $2.46B.
- Advertising revenue for streaming surged by 70%, driven by increased engagement on Max in the U.S.
- Streaming advertising excelled, while Warner Bros. Discovery's TV networks segment faced a downturn, with an 8% revenue decline to $5.13B, including an 11% drop in advertising revenue.
- Warner Bros. Discovery's studio segment revenue decreased by 12% YoY to $2.82B.
- In addition to paying back $1.1B in debt during the quarter, Warner Bros. Discovery announced a $1.75B cash tender intended to lower its debt.
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What the numbers say: GM's ($GM) market share in China, including its joint ventures, declined from around 15% in 2015 to 8.6% last year, marking its lowest level in about two decades. As per regulatory filings, earnings from GM's operations in China plummeted by 78.5% since reaching a peak in 2014. Relevance: GM's decrease in market share in China is attributed to heightened competition from government-supported domestic automakers and changing consumer preferences favoring electric vehicles, yet the company remains dedicated to the Chinese market. To regain market share, GM intends to capitalize on new all-electric and plug-in hybrid electric vehicle offerings and revitalize its Buick brand. More data: Around 60% of the 2.1 million vehicles sold by GM in China last year were contributed by its joint venture models. GM has announced a leadership change in China, appointing Steve Hill to replace Julian Blissett as GM China President, effective June 1. | | | |
| 3 | | In the first quarter, Airbnb's net income more than doubled to $264M from $117M a year earlier, while revenue reached $2.14B, exceeding analyst predictions of $2.06B. The surge in earnings was credited to sales expansion facilitated by the timing of Easter, falling on March 31, and "cost discipline." More: - However, revenue growth for the second quarter is anticipated to slow to 8-10% YoY, with Airbnb's projected quarterly revenue of $2.68B-2.74B falling below analyst estimates.
- The early Easter, leap year, and currency headwinds are the key causes of the decline.
- Despite the anticipated deceleration, Airbnb ($ABNB) foresees growth rebounding in the mid-year, pointing to a "strong backlog" of reserved nights for summer events such as the Paris Olympics.
- The American company's gross bookings increased by 12% to $22.9B in the first quarter, decelerating from the 15% growth seen in the previous quarter and surpassing historical growth rates.
- The online marketplace for short- and long-term homestays and experiences repurchased $750M of stock in the period and has $6B remaining in its buyback program.
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| 4 | | AMC Entertainment Holdings Inc. ($AMC) reported a first-quarter loss, citing fewer film releases from Hollywood studios, although the loss per share, excluding some items, narrowed to $0.78, slightly above analysts' projections. Revenue remained stable at $951.4M, surpassing Wall Street estimates, with the company gaining market share from rivals. More: - AMC noted a global rise in average ticket prices yet observed a decline in spending per guest on drinks and popcorn.
- Hits like "Dune: Part Two" and "Kung Fu Panda 4" helped AMC and other theatre companies increase their earnings despite fewer big picture releases.
- At the end of the quarter, AMC's cash and equivalents were $624.2M, compared to $884.3M at the beginning of the quarter.
- The company is discussing its $4.5B debt with creditors, including over $2.8B due in 2026, with a lender group, advised by Gibson Dunn & Crutcher, proposing a restructuring plan in April.
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| 5 | | KKR & Co. ($KKR) has agreed to purchase the wealth management and corporate trust divisions of Australian fund manager Perpetual Ltd. for $1.43B, concluding a months-long sales process for these units. Following the deal's finalization, Perpetual's CEO, Rob Adams, will retire from his position. More: - Perpetual will continue as an independent asset manager, supervising $150B across diverse strategies after the transaction.
- Under the Perpetual corporate umbrella, active funds include Trillium, Barrow Hanley, and Pendal.
- Perpetual declined a $2.3B takeover bid in December from Australian investment firm Washington H Soul Pattinson & Co.
- In November 2022, Perpetual rejected a $1.1B acquisition offer from a consortium led by EQT AB-backed Barings Private Equity fund and Australian portfolio manager Regal Partners Ltd.
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| 6 | | Dine Brands ($DIN), overseeing Applebee's and IHOP, seeks to entice fast-food customers through deals amid decreasing restaurant expenditures, with Applebee's promoting offers such as Dollaritas and the Whole Lotta Burger for $9.99 to rival fast-food options. In the first quarter, low-income consumers, a substantial portion of Dine's clientele, visited less frequently and spent more cautiously. More: - CEO John Peyton emphasized how full-service eateries, fast-food businesses, and eating at home compete for diners' budgets.
- Dine Brands posted disappointing first-quarter earnings, with Applebee's and IHOP witnessing larger-than-anticipated declines in same-store sales.
- The business restated its forecast for the year, predicting same-store sales growth between 0% and 2%.
- Along with casual dining chains like Chili's, Applebee's focuses on competing with fast-food rivals such as McDonald's by highlighting value and affordability.
- Recent pop-culture events, like cameos in movies and TV series, have aided Applebee's in connecting with consumers and being current.
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 | 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 Shriram Jeevakumar | |
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