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| Here's your daily business briefing. - 🚀 Meta soars 15% on tripled profits, debuts dividend
- 🔍 Deep Dive: 2023: Sports deals soar while M&A stalls
- 📈 Amazon thrives on holiday sales surge
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Meta ($META) shares rose 15% following Q4 results that exceeded earnings and revenue expectations, with earnings per share at $5.33 (vs. an expected $4.96) and revenue reaching $40.1B (vs. an expected $39.18B). Additionally, Meta declared its inaugural dividend of $0.50 per share and initiated a $50B share buyback program. More: - Meta's Q4 results showed 2.11 billion daily active users (vs. 2.08 billion expected), 3.07 billion monthly active users (vs. 3.06 billion expected), and an average revenue per user of $13.12 (vs. $12.81 expected).
- Although the virtual reality division of Meta lost $4.65B during the quarter, sales at the Reality Labs division exceeded $1B.
- Zuckerberg noted that advancements in artificial intelligence have contributed to the accelerated growth of Meta's advertising business, surpassing that of rival Google.
- Chinese retailers played a significant role in Meta's financial recovery over the past year, increasing spending to reach users worldwide.
- China-born fast-growing startups Temu and Shein are heavily investing in advertising on Facebook and Instagram.
Zoom Out: - In Meta's Q3 earnings report in October, the company's CFO, Susan Li, emphasized the importance of business from China.
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| 2 | | 
What the numbers say: In 2023, mergers and acquisitions (M&A) in professional sports surged to a record high, reaching nearly $25B and experiencing a 27% increase in transaction values. Notable transactions included the $6B takeover of the NFL's Washington Commanders and British billionaire Jim Ratcliffe's acquisition of a 25% stake in Manchester United. Relevance: Amid a broader M&A market downturn in 2023, the sports sector experienced a notable increase in M&A activity. Investors from nation-states to private entities are attracted to sports assets, motivated by factors like acquiring trophy assets and gaining access to dedicated fanbases. More data: Sports investments, valued for trophy assets and fanbase access, contribute to long-term revenue, with broadcast revenue, tied to live sports' uniqueness, remaining crucial. In 2024, European football, including West Ham and Brentford, is set to attract investments, with private equity firms eyeing media rights deals in major leagues. | | | |
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| 3 | | Amazon ($AMZN) announced a Q4 profit of $10.6B, a substantial rise from $278M in the same quarter the previous year, while revenue increased by 14% to $170B, surpassing Wall Street's expectations. The strong holiday season, boosted by robust online spending and a special sales event, led to an 8% rise in Amazon's stock during after-hours trading. More: - The cloud computing division, Amazon Web Services (AWS), saw a 13% increase in sales in Q4 to $24.2B, with an over 38% increase in operating profit.
- Despite a sales growth slowdown last year, optimism for AWS's future expansion persists, driven by positive responses to new cloud offerings.
- The corporation sees a 27% increase in advertising revenue and starts running commercials on its Prime Video platform unless users upgrade.
- The business demonstrated its commitment to artificial intelligence (AI) advancements by launching Rufus, an AI-powered shopping assistant, on its mobile app.
- Amazon expects an 8% to 13% YoY revenue increase in the current quarter while grappling with challenges like competition, an antitrust lawsuit, and regulatory scrutiny.
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| 4 | | Apple's ($AAPL) Q1 revenue of approximately $120B, up 2.1% YoY, ended a recent growth decline, with net income for the quarter at $34B, a 13% rise that surpassed analyst predictions. CFO Luca Maestri emphasized the significance of Apple's active devices exceeding 2.2 billion, deeming it a crucial factor for the company's future. More: - Sales of the iPhone increased by over 6% to $69.7B, exceeding analyst estimates of $67.6B.
- Apple's Q1 revenue in China, its third-largest market, fell by roughly 13% to $21B, below projections despite an overall increase.
- However, in the last quarter of 2023, smartphone sales in China increased 6.6%, ending a 10-quarter trend of decreases fueled by rare discounts, with Apple continuing to hold a 20.2% market share.
- Services revenue increased to $23.1B, an 11.3% increase, but fell short of expert projections.
- The newly launched Apple Vision Pro virtual-reality headset is shipping to preordered customers, with its near-term contribution to overall sales expected to be limited.
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| 5 | | Ferrari ($RACE) exceeded Q4 expectations with a net profit of $317.9M and an adjusted EBIT of $402.3M. In 2023, Ferrari reported a full-year net profit of $1.36B and adjusted EBIT of $1.75B, along with a 17% revenue increase to $6.46B, including an 11% rise in Q4 to $1.506B. More: - The automaker's 2024 forecast aims to exceed 2023 results, projecting revenue of over $6.9B and an adjusted EPS of at least $8.09.
- Ferrari's 2023 shipments climbed by 3% to 13,663 cars, with 3,245 coming in the fourth quarter.
- Ferrari's stock increased by around 12% to hit a new 52-week high of almost $390 on the NYSE.
- A Formula 1 driver, Lewis Hamilton, will join the Ferrari racing team in 2025 after leaving Mercedes.
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| 6 | | Cigna Group ($CI) is selling its Medicare business, including Advantage, supplement, and drug plans, to Health Care Service Corp. for $3.3B, with the total transaction value at $3.7B. Cigna will retain pharmacy benefits services under a four-year agreement, and the transaction is expected to close early next year, resulting in a $1.5B pretax loss for Cigna in 2023. More: - CareAllies, a division that collaborates with medical organizations and other healthcare providers, is also being sold as part of this agreement.
- Cigna has a smaller presence in the Medicare market than Humana, UnitedHealth Group Inc., and CVS Health Corp., with fewer than 600,000 Medicare Advantage enrollees as of March 2023, as reported by health researcher KFF.
- Most of the sale proceeds will be used for share repurchases, and Cigna maintains its 2024 earnings target of at least $28 per share in adjusted income from operations.
- Based in Chicago, HCSC operates Blue Cross Blue Shield plans in five states, caters to 22 million people, and is structured as a customer-owned mutual insurer.
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- Walmart introduced AR eyewear try-on tech, which will expand to over 3,000 Vision Centers nationwide by the end of 2024.
- Intel is delaying its $20B Ohio chipmaking project's construction timeline due to market challenges and the slow release of U.S. grant funds, as reported by the Wall Street Journal on Thursday.
- Deutsche Bank is eliminating 3,500 jobs as part of its cost-cutting strategy to reduce expenses by $2.7B by 2025.
- Amer Sports, the Finnish athletic company known for the Wilson tennis racket and Arc'teryx, had a subdued market debut, with shares rising 3% after its discounted initial public offering.
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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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