| Here’s your daily business briefing. - ✈️ Boeing beats Q1 expectations amid 737 Max crisis
- 🔍 Deep Dive: U.S. sees rise in drone deliveries
- 💊 Biogen beats profit projections with Leqembi launch
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Boeing ($BA) reports a narrower-than-expected loss and lower cash burn in the first quarter, with a $3.9B cash burn compared to earlier forecasts of up to $4.5B, as production of its 737 Max planes has been hampered, leading to a drop in output and slowing deliveries. The company reports a loss of $355M, down from $425M a year earlier. More: - The Virginia-based firm reports an adjusted loss per share of $1.13, beating analysts' estimates of $1.76, while revenue falls 8% to $16.57B, slightly surpassing analysts' expectations.
- The American multinational corporation's revenue from commercial aircraft units fell 31% to $4.65B, while the company's negative margins increased to 24.6% from 9.2%.
- Boeing restates its aim of reaching $10B in annual free cash flow by 2025-2026, though it acknowledges a probable six-month delay in meeting this target.
- CEO Dave Calhoun states that Boeing's 737 Max supply chain is stabilizing despite challenges, notably following a door blowout incident on a 737 Max jetliner earlier this year.
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What the numbers say: Over one million commercial drone deliveries were completed worldwide last year, including about 157,500 in North America. Walmart plans to deliver in drones to 75% of the Dallas-Fort Worth region, and Amazon aims to launch its latest drone model in three U.S. states, Italy, and the U.K. Chick-fil-A has initiated drone delivery within a 1.2-mile radius of its restaurant in central Florida, and Zipline intends to start delivering prescriptions for Cleveland Clinic next year. Relevance: Drone operators face regulatory restraints and safety, privacy, and noise concerns. Due to increased online orders during the COVID-19 pandemic, the use of delivery drones surged, contributing to road congestion and pollution. Companies like Wing, Walmart, Amazon, Chick-fil-A, and Zipline actively address these challenges by testing quieter devices and developing detect-and-avoid technology. More data: The FAA granted drone-delivery companies more freedom to fly, expanding services across the U.S. Amazon is winding down its drone delivery operations in Lockeford, California, with plans to introduce deliveries to more U.S. cities, including part of the Phoenix area, later this year, while the FAA reviews a committee's final report on the safety of operating drones out of a human's line of sight to make delivery routine, scalable, and economically viable. | | | |
| 3 | | Biogen ($BIIB) reports first-quarter profit exceeding estimates, driven by cost-cutting efforts and higher-than-expected sales of its Alzheimer's drug, Leqembi, which reached approximately $19M, up from $10M last year, surpassing analysts' expectations. Despite a 7% decline in first-quarter revenue to $2.29B, the company's net income reaches $393.4M, or $2.70 per share. More: - Biogen aims for quarterly Leqembi patient growth despite treatment bottlenecks like bi-monthly infusions and brain scans.
- The number of patients on Leqembi therapy has surged nearly 2.5 times since the end of 2023, with a significant increase in new patients starting in March.
- Adjusted earnings per share are $3.67, surpassing the anticipated $3.45, while revenue slightly falls short of estimates at $2.29B, compared to the expected $2.31B.
- Biogen reiterates its full-year 2024 adjusted earnings forecast of $15 to $16 per share, with sales expected to decline at a low- to mid-single-digit percentage.
- Other newly launched drugs, like Skyclarys and Zurzuvae, also perform well, with Skyclarys bringing in $78M and Zurzuvae generating $12M in sales for the first quarter.
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| 4 | | Mattel Inc. ($MAT) reports a narrower-than-expected first-quarter loss, with shares rising by as much as 5.3%, driven by fast sales of its Hot Wheels miniature cars and lower costs. The toymaker's quarterly loss per share shrinks to $0.05, compared to $0.24 a year ago, surpassing analysts' expectations of a $0.12 loss, while first-quarter revenue slightly declines to $809.5M, missing projections. More: - Strong 5% growth in the Hot Wheels segment partially offsets declines in other categories, including dolls, toddler toys, games, and action figures.
- Despite projecting flat sales of $5.44B, Mattel's management maintains its forecast for improved profitability in 2024.
- In 2024, Mattel expects to save $60M in costs and increase full-year earnings despite the toy industry's weak post-pandemic sales.
- Hot Wheels is expected to mark its seventh consecutive year of record sales in 2024, driven by the success of the animated series "Hot Wheels Let's Race" on Netflix.
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| 5 | | Huawei's smartphone sales in China experienced a 70% YoY growth in the first quarter, increasing its market share from 9.3% to 15.5% compared to the previous year, while Apple's sales declined by over 19% YoY. Counterpoint research suggests that Huawei's resurgence has directly impacted Apple's sales in the premium segment. More: - Apple, previously holding nearly 20% of China's smartphone market in Q1 2023, dropped to third position in Q1 2024, with a market share of 15.7%.
- Despite U.S. efforts to restrict China's access to foreign chip technology, Huawei's Mate 60 Pro smartphone garners attention for its advanced processor.
- According to IDC, Apple's smartphone sales fell 10% globally in Q1, primarily due to a slowdown in China.
- Chinese consumers' growing preference for domestic brands over Apple contributes to the challenging environment for the company in China's smartphone market.
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| 6 | | Infinite Reality's acquisition of Drone Racing League (DRL) for $250M marks a significant move in the sports industry, as DRL gains attention with drone racing transitioning from a niche hobby to a mainstream sport since its founding in 2015. After its acquisition, Infinite Reality, a developer of metaverse technology, is currently valued at $3.5B. More: - DRL is primarily backed by investors, including RSE Ventures, co-founded by Miami Dolphins owner Stephen Ross, and notable entities like Liberty Media and T-Mobile.
- Pilots in drone racing navigate quadcopters equipped with cameras, often using VR goggles to control the drones.
- DRL has notable partnerships with entities like the U.S. Air Force, Google Cloud, Allianz, NBC, Sony, and Algorand, a blockchain technology company.
- Nicholas Horbaczewski, DRL's CEO and founder, becomes the global president of Infinite Reality, while Rachel Jacobson, DRL's president, takes on the role of Infinite Reality's president of global business, ventures, and partnerships.
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| 7 | | Quick Hits: - The U.S. Senate passed a bill to ban TikTok from app stores unless its Chinese owner sells it, likely triggering a court showdown over the platform's free speech protections under the U.S. Constitution.
- A report reveals that cotton utilized by H&M and Zara, certified by Better Cotton, was cultivated on land in Brazil associated with illegal deforestation, according to a year-long investigation by Earthsight.
- Walmart's fintech startup, One, now offers buy now, pay later loans for big-ticket items at over 4,600 U.S. stores, directly competing with Affirm, the exclusive installment loan provider for Walmart customers since 2019.
- Nvidia is acquiring Tel Aviv-based Run:ai, which streamlines AI hardware infrastructure management for developers and operations teams, reportedly for $700M according to TechCrunch.
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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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