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| Here's your daily business briefing. - 💰 American Airlines reported a $19M profit in Q4 2023, surpassing Wall Street expectations for both revenue and earnings.
- 🔍 Deep Dive: Meituan, launched in May 2023, is now Hong Kong's second-largest food delivery platform, surpassing Deliveroo, as part of its strategy to offset China's weak demand.
- 📊 AT&T reported customer growth after a challenging period, but its earnings and outlook fell below Wall Street estimates.
- 🚀 Comcast exceeded expectations in Q4 with revenue reaching $31.25B, a 2.3% increase, and its shares surged.
- 📱 Apple's Q4 2023 smartphone shipments in China dropped 2.1% year-over-year, influenced by heightened competition from local rivals, notably Huawei, per IDC data.
- 🍺 Bud Light returns to the Super Bowl with a 60-second ad to recover from a boycott, part of Anheuser-Busch's revival strategy emphasizing comedy.
Thanks for reading! Shriram
p/Shriram | |
| 1 | | American Airlines ($AAL) posted a Q4 2023 profit of $19M, beating Wall Street estimates for revenue and adjusted earnings per share. The adjusted earnings per share stood at $0.29, exceeding the anticipated $0.10 per share, while Q4 revenue reached $13.06B, slightly surpassing the expected $13.02B. More: - Net income dropped by about 98% in Q4 2023 compared to Q4 2022, and earnings per share dropped from $1.14 to $0.03.
- Following the news, the company's shares surged more than 10%.
- American expects adjusted earnings per share for 2024 to be between $2.25 and $3.25, with flying capacity increasing by mid-single digits over 2023.
- In Q1 2024, the firm projects an adjusted net loss per share of 15 to $0.35, with costs (excluding fuel) rising 2%-4% and flying capacity increasing 6.5%-8.5%.
- The Texas-based company accomplished its best-ever on-time departures during December, leading to a profit-sharing payment for all U.S. and Canada-based employees in March.
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What the numbers say: Since its launch in May 2023, Meituan's app "KeeTa" has become the second-largest food delivery platform in Hong Kong, holding a 37% market share in December, surpassing Deliveroo's 20%. Regarding overall market share, KeeTa ranks third at 21%, Deliveroo holds 25%, and Foodpanda leads with 54%. Relevance: Meituan's success with KeeTa in Hong Kong, driven by a subsidy-heavy strategy and aggressive hiring, showcases its ability to compete globally. This overseas expansion is a strategic response to China's weak demand, leveraging its dominant position in the domestic market. More data: While KeeTa's success is notable, analysts believe its impact on Meituan's overall revenue is limited due to the small local market size. Concerns about subsidy sustainability and potential customer platform-switching led to a 4.6% decline in Meituan's Hong Kong shares despite KeeTa's rapid growth. | | | |
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| 3 | | AT&T's ($T) Q4 adjusted earnings of $0.54 per share missed the average analyst estimate of $0.56, while revenue for the quarter rose 2.2% year-over-year to $32B, slightly surpassing expectations of $31.5B. The company anticipated 2024 adjusted earnings per share of up to $2.25, falling below Wall Street's estimate of $2.44. More: - In Q4, AT&T exceeded expectations by adding 526,000 new mobile subscribers and 273,000 fiber service users, surpassing predictions.
- Subscriber gains, boosted by holiday sales and promotions for Apple Inc.'s iPhone 15, follow a year of declining wireless user growth.
- As AT&T moves towards an open network buildout by Ericsson, higher expenses for the upcoming year include faster depreciation of Nokia equipment.
- The Dallas-based company projects a 3% growth in wireless services by 2024, less than the 3.4% growth predicted by analysts, indicating a possible downturn.
- In 2023, AT&T generated $16.8B in free cash flow; for 2024, the company expects to generate between $17 and $18B in free cash flow.
Zoom Out: - In August 2023, AT&T launched Internet Air, a wireless home internet service, entering mobile carriers' competitive 5G network space.
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| 4 | | In Q4, Comcast ($CMCSA) surpassed expectations with adjusted earnings per share of $0.84, exceeding the anticipated $0.79. The company reported Q4 revenue of $31.25B, outperforming the estimated $30.51B, and achieved a net income increase of 7.8% to $3.26B, or $0.81 per share. More: - In 2024, Comcast boosted its annual dividend by 7% to $1.24 per share, representing the 16th year in a row of dividend increases.
- The business granted a $15B authorization for a fresh share repurchase program with no expiration date, which will take effect on Friday.
- Domestic broadband income increased 3.7% to $6.4B, but Comcast lost 34,000 subscribers — less than the predicted 62,000.
- Comcast's streaming service Peacock saw an increase of 3 million subscribers, raising its total to 31 million, and for the first time in a quarter, revenue topped $1B.
- According to Comcast President Mike Cavanagh, the company's first-ever exclusive live feed of an NFL Wild Card playoff game attracted close to 23 million people and accounted for 30% of all internet traffic.
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| 5 | | Apple's ($AAPL) iPhone shipments in China fell by 2.1% in Q4 2023, facing increased competition from local rivals, notably Huawei, which saw a 36.2% increase in shipments. Huawei, recovering from U.S. sanctions, became the fourth-largest smartphone vendor in China, with a 13.9% market share in Q4 2023, up from 10.3% the previous year. More: - According to IDC, Apple overtook Vivo to take the lead in smartphone sales in China for 2023, with a 17.3% market share.
- Despite Apple's yearly success, analysts foresee challenges in 2024 due to increasing competition in the high-end market and limited product upgrades.
- In response to pressure from the competition, IDC observes that Apple sustained demand through discounts and promotions offered through third-party distribution lines.
- Apple recently offered rare discounts of up to $70 (500 yuan) on iPhones.
- Jefferies expects Apple's 2024 shipments to decline, while Huawei is expected to strengthen its market share with around 64 million global smartphone shipments.
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| 6 | | Bud Light plans a 60-second Super Bowl ad to rebound from a consumer boycott, with Anheuser-Busch (ABI.BR) also featuring a one-minute Michelob Ultra commercial and a 30-second Budweiser spot. The 30-second Super Bowl commercial comes at a cost of approximately $7M for advertisers. More: - Bud Light's Super Bowl ad concludes a five-month NFL campaign, part of broader efforts to revive the brand after losing its top-selling U.S. beer status to Modelo Especial.
- In the first two weeks of 2024, Modelo Especial sold more beer in retail stores (8.6%) than Bud Light (7.4%).
- The "Easy to Drink, Easy to Enjoy" theme will be upheld in Bud Light's Super Bowl commercial, concentrating on humor and including a new brand character.
- Anheuser-Busch plans to market at branded events in Las Vegas during the Super Bowl and advertise on the new Sphere arena's digital screen.
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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 Aaron Crutchfield | |
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