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| Here's your daily business briefing. - 📈 GM beat Q4 2023 expectations with adjusted earnings per share of $1.24 and revenue of $42.98B.
- 🔍 Deep Dive: Consumer prices rose 0.3% in December, exceeding the expected 0.2%.
- 💊 Pfizer's Q4 2023 profit was $0.10 per share, beating the expected $0.22 per share loss.
- 🔄 Bain anticipates increased M&A deals in 2024, potentially accelerated by a backlog of tradable assets in 2023.
- ✈️ JetBlue reported a Q4 loss and foresees reduced capacity as it strives to regain profitability.
- 🏋️♂️ Tom Brady merges his health and nutrition and apparel brands with Nobull Training.
Thanks for reading! Shriram
p/Shriram | |
| 1 | | General Motors ($GM) outperformed Q4 2023 expectations with adjusted earnings per share of $1.24 (estimated $1.16) and revenue of $42.98B (estimated $38.67B). For the full year 2023, GM reported revenue of around $171.84B, a 10% increase from the previous year, along with net income of $10.13B and adjusted EBIT of $12.36B. More: - The Detroit-based firm expects strong 2024 performance, projecting net income of $9.8B-$11.2B, adjusted EBIT of $12B-$14B, and adjusted automotive free cash flow of $8B-$10B.
- In Q42023, General Motors' North American adjusted earnings came in at $2.01B, a 45% decrease YoY, while its overseas businesses saw a 1.1% fall to $269M.
- The American multinational automotive manufacturing company anticipates cutting its expenditures on Cruise, its majority-owned driverless car unit, by approximately $1B in 2024.
- GM sold 75,883 electric vehicles in 2023, accounting for 2.9% of total sales, and aims to increase EV production capacity in North America to 1 million units by 2025.
- GM's leadership, Mary Barra and Paul Jacobson, affirm their commitment to expanding the EV lineup despite slower-than-anticipated adoption in the U.S.
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What the numbers say: Consumer prices rose 0.3% in December, exceeding the expected 0.2%, with an annual rate of 3.4%. Core CPI increased by 0.3% for the month and 3.9% from a year ago, primarily due to rising shelter costs, resulting in a 3.4% gain on a 12-month basis, down from the 6.4% increase in December 2022. Relevance: The unexpected consumer price increase suggests ongoing inflationary pressures, partly driven by rising shelter costs, with the Federal Reserve anticipating a decline in these costs as renewed leases reflect lower rents; this led to negative stock market futures and slightly higher Treasury yields. More data: In December, food prices, driven by an 8.9% increase in egg prices, rose 0.2%, and energy gained 0.4%. Adjusted for inflation, wages increased by 0.2% monthly and 0.8% annually. Despite initial jobless claims of 202,000, below the estimated 210,000, futures traders gave a 69% probability of a March Fed interest rate cut, underscoring a market-fed projection gap. | | | |
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| 3 | | Pfizer ($PFE) surprised with a Q4 2023 profit of $0.10 per share on an adjusted basis, beating the expected $0.22 per share loss. The company reported Q4 revenue at $14.25B, slightly below the estimated $14.42B, while maintaining its 2024 forecasts for adjusted earnings of $2.05 to $2.25 per share and revenue between $58.5B to $61.5B. More: - The American multinational pharmaceutical and biotechnology corporation made $12.5B in revenue from COVID-related goods in 2023, which included the Comirnaty vaccine and the antiviral medication Paxlovid.
- The sales of breast cancer treatment, Ibrance, dropped 12.6% to $1.12B, missing the $1.23B estimate, and revenue from the Prevnar pneumonia vaccine was $1.61B, below the expected $2B.
- The NYC-based business has started an internal reorganization and $4B cost-cutting program in response to the purchase of Seagen and issues with its non-COVID performance.
- Pfizer slashed research and development spending by 22% to $2.82B in the quarter, driven by reduced compensation and cuts to vaccine and rare disease programs.
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| 4 | | Global M&A activity fell by 15% to $3.2T in 2023, marking a decade-low, with a 6% decline in strategic deals, notably in Europe and Asia. The decrease was influenced by higher interest rates, an uncertain economic outlook, regulatory scrutiny, and geopolitical risks, impacting tech deals while showing increased activity in the energy and natural resources sectors. More: - Bain expects a "big backlog" of tradable assets from 2023 to transfer, signaling a potential pick-up in M&A activity in 2024.
- Corporate balance sheets are robust, and the cycle of interest rate hikes has concluded.
- The combined M&A market value in Australia and New Zealand in 2023 was $79B, a 13% decrease from the year before.
- Of the entire strategic deal value, approximately 50% comprised energy and natural resources.
- Australia's energy and natural resources sector is expected to see ongoing M&A activity in 2024 due to substantial capital needs for the energy transition.
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| 5 | | JetBlue Airways ($JBLU) reported a net loss of $104M in Q4 2023, compared to a $24M profit the previous year, with an adjusted loss per share of $0.19, missing Wall Street expectations. Despite a 3.7% YoY decline, Q4 revenue reached $2.33B, slightly exceeding the estimated $2.29B and outperforming Wall Street estimates. More: - The low-cost airline projects a 5%-9% decline in revenue and a 6% decrease in capacity in the first quarter of 2024.
- According to the airline, capacity will drop to the low single digits in 2024, and adjusted profits may potentially approach breakeven.
- The NYC-based firm reported that seven Airbus jets are grounded for engine inspections due to a Pratt & Whitney production issue, with the potential for this number to reach 15 by year-end.
- Due to rising expenses, operational difficulties, and shifting travel trends, JetBlue is considering buyouts for a portion of its paid staff.
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| 6 | | Tom Brady is merging his health and nutrition firm, TB12, and his apparel company, Brady, with training brand Nobull, making him the second-largest shareholder in Nobull. Nobull, acquired in 2023 by beverage veteran Mike Repole, will have him as the majority shareholder, with the specific terms undisclosed. More: - Nobull, a Boston-based business, intends to develop into a full-service wellness brand, mainly selling its clothing and trainers online.
- Nike Repole, well-known for making household names from beverage products, hopes that Brady's cooperation will help Nobull become a billion-dollar brand.
- Shoes, clothes, and nutrition items sold under the Brady and TB12 trademarks are included in the transaction.
- Since Brady's endorsement agreement with Under Armour has expired, this merger allows him to maintain his influence over his fan base and brand.
Zoom Out: - As announced in 2021, Coca-Cola has acquired complete ownership of sports drink manufacturer Bodyarmor for $5.6B, the company's most substantial brand acquisition.
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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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