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| Here’s your daily business briefing. - 🩺 J&J beats profit expectations on device sales surge
- 🔍 Deep Dive: Nio loses $2.9B amid EV competition surge
- 📊 Q1 2024: Morgan Stanley beats expectations
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Johnson & Johnson announced adjusted earnings of $2.71 per share for the first quarter, exceeding the anticipated $2.64, while its total revenue of $21.38B fell slightly short of the expected $21.4B. The company's profit also increased by 28% to $4.13B compared to last year. More: - J&J's medical devices segment experienced YoY sales growth of over 4%, reaching $7.82B.
- The corporation profited from higher procedure levels resulting from older folks' increasing desire for non-urgent procedures.
- Pharmaceutical sales for the quarter amounted to $13.56B, with around 1% YoY growth, while excluding revenue from its COVID-19 vaccine, the pharmaceutical division grew almost 7%.
- The New Jersey-based company anticipates sales of $88B to $88.4B for the entire year, with adjusted earnings per share ranging from $10.57 to $10.72.
- The American multinational, pharmaceutical firm also declared a 4.2% rise in quarterly dividends, now at $1.24 per share.
Zoom Out: - In January, J&J disclosed a $700M tentative settlement to resolve claims from over 40 states regarding the safety of its talc-based products, as stated by the company's CFO Joseph Wolk to The Wall Street Journal.
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What the numbers say: Nio Inc. posted a fourth-quarter net loss of $746M, contributing to an annual deficit of $2.9B (20.7B Yuan). Vehicle margins improved to 11.9% but remained below analyst forecasts, while fourth-quarter gross margins of 7.5% fell short of the market's expected 10.2%. Relevance: Nio confronts intense competition in China's EV sector, where competitors such as Xpeng Inc. and Li Auto Inc. are profiting while Nio grapples with losses. While the company hasn't disclosed significant product launch initiatives for 2024, analysts anticipate unveiling a mass-market brand to rival Tesla Inc.'s domestically produced models, potentially reducing losses. More data: Nio is diversifying with a mass-market brand, Alps, to compete with Tesla's Model Y SUV. It plans to expand into the UAE and introduce a sub-brand offering vehicles below $27,634 (200,000 yuan) by 2025. Nio also promotes battery-swap technologies to address range concerns despite a 41% decline in U.S.-listed shares due to investor apprehensions. | | | |
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| 3 | | Morgan Stanley's first-quarter earnings per share stood at $2.02, surpassing analysts' expectations of $1.66, with revenue totaling $15.14B, exceeding the anticipated $14.41B. The first-quarter profit increased 14% YoY to $3.41B, or $2.02 a share. More: - Revenue from wealth management climbed by 4.9% to $6.88B, $230M more than the StreetAccount expectation.
- Derivatives volumes drove the 4.1% increase in equity trading income, which reached $2.84B, beating estimates by $160M.
- Revenue from fixed-income trading fell 3.5% to $2.49B, although it was still $120M more than anticipated.
- Driven by growth in debt and equity offerings, investment banking revenue jumped by 16% to $1.45B, edging out of the $1.40B projection.
- Investment management revenue increased by 6.8% to $1.38B, slightly below the StreetAccount estimate of $1.43B.
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| 4 | | Microsoft has committed to investing $1.5B in the artificial intelligence company G42, gaining Brad Smith, the vice-chair and president of the company, a board seat and a minority share. The investment demonstrates the emirate's technological aspirations, bolsters Abu Dhabi's status as an AI powerhouse, and underscores the U.S. and United Arab Emirates' growing engagement in AI. More: - As part of the deal, G42 will utilize Microsoft's Azure cloud computing platform for AI services, bolstered by backing from Abu Dhabi sovereign investor Mubadala, central to the emirate's AI ambitions.
- The businesses intend to sponsor a $1B fund for AI developers and collaborate on constructing data centers abroad.
- Microsoft's investment in G42 demonstrates its trust in both the UAE and G42, positioning itself to expedite the introduction of AI services in the Global South.
- G42's move to end ties with Chinese hardware suppliers enabled the deal amidst U.S. lawmakers' data security concerns, leading to negotiations with the Biden administration to comply with regulations on Chinese technology.
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| 5 | | Bank of America's first-quarter earnings stood at $0.83 per share, surpassing analysts' projections of $0.76, with revenue totaling $25.98B, exceeding expectations of $25.46B. However, profit declined by 18% to $6.67B, or $0.76 per share, and excluding a $700M FDIC assessment, profit was $0.83 per share. More: - Total deposits rose by approximately 1% from the fourth quarter to $1.95T, while loans remained nearly unchanged at $1.05T.
- Revenue from investment banking increased by 35% to $1.57B, above the projected amount of $1.36B.
- Revenue from fixed income fell 3.6% to $3.31B, just over the projected $3.24B.
- Compared to the projected $1.84B, equity revenue increased by 15% to $1.87B.
- Revenue declined by 1.6% to $25.98B due to a decrease in net interest income compared to the previous year, resulting in a more than 4% drop in the bank's shares.
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| 6 | | Nike unveils a new product lineup in a "multi-year innovation cycle" to revive stagnant revenue, showcasing enhancements to its Air cushioning platform across sports, including athletes wearing the new products at the Summer Olympics. Highlighted releases include introducing the first visible Air Zoom unit in the Pegasus Premium running shoe and the Nike Blueprint Pack, featuring Air technology designed for various activities. More: - Nike initiates the A.I.R. (Athlete Imagined Revolution) approach, which involves professional athletes and designers working to co-create next-generation Air products.
- American athletic footwear wants to cut $2B over the course of three years by implementing strategic decisions, including product portfolio simplification and layoffs.
- Sales in Q2 climbed by 0.5% to $13.4B, while Q3 sales are steady at $12.4B.
- Analysts stress the importance of ongoing product innovation for Nike's long-term success, underscoring the necessity for a constant stream of innovative offerings.
- CEO John Donahoe recognizes the necessity of improved product innovation, which has led to Nike's increased investment in this area.
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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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