| Here’s your daily business briefing. - 🚗 Ford beats Q1 targets despite EV setbacks
- 🔍 Deep Dive: Hawaii leads the U.S. in EV adoption
- 📺 Comcast exceeds revenue targets with streaming, parks
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Ford Motor surpasses Wall Street's first-quarter earnings estimates, propelled by robust sales of trucks and commercial vehicles, with adjusted earnings per share reaching $0.49, exceeding the anticipated $0.42. However, automotive revenue slightly falls below expectations, at $39.89B instead of the expected $40.10B. More: - Ford's total first-quarter revenue, including its credit business, rose approximately 3% YoY to $42.78B.
- The Ford Blue traditional business segment's adjusted earnings declined by 66% to $905M, whereas the Ford Pro commercial business recorded a 120% increase YoY, reaching $3.01B.
- The Model e electric vehicle division reported a $1.32B loss in the first quarter.
- Ford maintains its 2024 earnings guidance, with adjusted EBIT projected at $10-12B, while slightly adjusting capital expenditure and raising adjusted free cash flow expectations for the year.
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What the numbers say: Hawaii ranks fifth in U.S. EV adoption, with 11.9% of new vehicle sales electric through February, and third in J.D. Power's "EV Adoption Score," driven by high gas prices of about $4.72 per gallon. Top EV models like the Tesla Model Y, Tesla Model 3, and Ford F-150 Lightning are popular, yet they only make up around 8% of sales at Aloha Kia dealerships. Relevance: Hawaii's leadership in EV adoption stems from its combination of high fuel costs, abundant renewable energy, and cultural emphasis on land stewardship. The state's unique geography and lack of long-distance travel concerns make EVs especially practical for residents, despite affordability remaining a barrier due to their higher prices than the average vehicle cost. More data: Nationally, fewer U.S. adults are considering buying EVs due to affordability and charging infrastructure concerns. In Hawaii, the average price of purchasing an EV from a franchised dealer exceeds $62,600, posing affordability challenges, particularly for lower-income individuals. | | | |
| 3 | | Comcast exceeded quarterly revenue estimates, reporting total revenue of $30.06B, surpassing the expected $29.81B, while its adjusted earnings per share stood at $1.04, higher than the estimated $0.99. Additionally, Peacock, Comcast's streaming service, gained 3 million subscribers in Q1, totaling 34 million, surpassing estimates of 2.32 million. More: - Peacock's revenue surged approximately 54% YoY, fueled by its exclusive broadcast of an NFL playoff game in January and the debut of the film "Oppenheimer" in February.
- While domestic advertising remained flat, increased domestic distribution revenue, buoyed by Peacock's growth, countered the media industry's prolonged weak advertising market.
- The American multinational telecommunications and media company's broadband market struggled against tough competition from telecom operators like T-Mobile and Verizon, resulting in a loss of 65,000 customers in the first quarter.
- The Philadelphia-based firm's theme parks, including Super Nintendo World in Japan, drove positive performance, with further growth expected from the opening of Epic Universe in Florida by the summer of 2025.
- With increased Olympic coverage on its broadcast networks, NBC and Peacock, the company anticipates generating its highest-ever advertising revenue for the Olympics.
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| 4 | | Chipotle Mexican Grill exceeds Wall Street expectations for quarterly earnings, revenue, and same-store sales growth, with a 7% increase in same-store sales surpassing StreetAccount estimates of 5.2%. Adjusted earnings per share stood at $13.37, surpassing the expected $11.68, while net sales rose by 14.1% to $2.7B, beating analysts' estimates of $2.68B. More: - The net income for the quarter increased to $359.3M, or $13.01 per share, from $291.6M, or $10.50 per share, in the previous year.
- Chipotle's restaurant traffic rises by 5.4% YoY, accompanied by a 1.6% increase in average check.
- CEO Brian Niccol credits the chain's value perception among diners for driving traffic increases across income categories.
- With plans to add 285–315 new sites in 2024, Chipotle expects same-store sales growth for the entire year to be in the mid-to-high single-digit percentage range.
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| 5 | | IBM announced its acquisition of software company HashiCorp Inc. for $6.4B, valuing HashiCorp at $35 per share on an enterprise basis. The confirmation of the acquisition coincided with IBM's first-quarter results, revealing a 1% increase in revenue to $14.5B. More: - With a $600M rise from the prior year, IBM's free cash flow grew to $1.9B.
- Following announcements of the acquisition, HashiCorp's shares saw an 11% increase on Wednesday, ending at $31.41 and having a $6.27B market value.
- IBM Chairman and CEO Arvind Krishna emphasized HashiCorp's expertise in navigating infrastructure and application complexity within the contemporary digital environment.
- The acquisition is anticipated to strengthen IBM's hybrid cloud platform and align with its emphasis on the AI era.
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| 6 | | American Airlines' first-quarter adjusted loss was $0.34 per share, missing the expected $0.29, with revenue slightly below projections at $12.57B, impacted by major weather events across its network. Despite this, the company forecasts a return to profit in the second quarter, with anticipated adjusted earnings of $1.15 to $1.45 per share, surpassing analyst estimates at the midpoint. More: - American Airlines has prioritized domestic and nearby international routes, focusing on Sun Belt hubs such as Texas and Florida.
- The airline anticipates a capacity increase of up to 9% this quarter, propelled by robust leisure demand and expanding corporate and small business travel.
- It is predicted that non-fuel unit costs will increase by up to 3%.
- American Airlines reiterates its $2.25 to $3.25 per share full-year profit outlook.
- Boeing's production delays will reduce American's aircraft deliveries this year, resulting in fewer 737 Max and 787 aircraft for the airline.
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| 7 | | Quick Hits: - Foot Locker introduced its new "store of the future" concept, set to roll out in five cities and influence the renovation of 900 stores in the next two years, featuring an immersive layout and dedicated areas for new releases and customization options.
- U.S. new single-family home sales surged 8.8% in March to a seasonally adjusted annual rate of 693,000, accounting for about 10% of the market, despite elevated mortgage rates.
- Walgreens enters the cell and gene therapy market with its first pharmacy center, targeting major pharmaceutical firms to drive cash flow.
- Amazon.com's cloud-computing division, AWS, plans to invest $11B in Indiana to construct data centers, representing the state's largest capital investment and committing to create at least 1,000 jobs.
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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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