| Here’s your daily business briefing. - 💰 Amazon's Q1 profits triple, exceeding Wall Street forecasts
- 🔍 Deep Dive: Bud Light backlash cuts shelf space by 15%
- 🍕 Yum Brands' earnings miss on weak Pizza Hut, KFC sales
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Amazon's ($AMZN) first-quarter earnings and revenue exceeded Wall Street's expectations, with EPS at $0.98, surpassing the anticipated $0.83 by LSEG, and revenue reaching $143.3B, slightly exceeding the expected $142.5B. Cost-cutting measures, fulfillment operations optimizations, and cloud spending stabilization have driven the company's earnings growth. More: - AWS revenue reached $25B, exceeding the forecast of $24.5B.
- Advertising revenue surged by 24%, hitting $11.8B, slightly above the projected $11.7B.
- Operating income skyrocketed by over 200% to $15.3B, with AWS accounting for 62% of total operating profit.
- Net income surged to $10.4B, more than tripling from the previous year's $3.17B.
- Amazon forecasts that the second-quarter operating income will be between $10B and $14B, with revenue expected to range from $144B to $149B.
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What the numbers say: Bud Light's long-term decline in market share is not solely attributed to recent boycotts; Anheuser-Busch InBev faces the potential loss of up to 15% of shelf space for its beers during the spring reset in major grocery chains. This follows Bud Light's sales dip due to controversy over its collaboration with transgender influencer Dylan Mulvaney, potentially impacting its competition against brands like Modelo, while Molson Coors Brewing Co. expects gains for its core brands like Coors Light and Miller Lite. Relevance: The loss of shelf space signals Bud Light's ongoing challenges post-marketing incidents while retailers adjust to consumer trends, highlighting the importance of brand perception. This reflects the competitive beer market, where Bud Light remains a leader by volume but faces fluctuations in sales and brand reputation. More data: Despite potential shelf space losses, Bud Light remains prominent in various venues, with recent sponsorships potentially offsetting some impacts. While Bud Light sales saw a slight uptick in January, alternative beverages like canned cocktails and THC-infused drinks are gaining consumer favor. | | | |
| 3 | | Yum Brands' ($YUM) quarterly earnings and revenue fell below expectations, with adjusted earnings per share at $1.15, missing the anticipated $1.20, and revenue totaling $1.6B instead of the expected $1.71B. However, net income for the first quarter increased to $314M, or $1.10 per share, from $300M, or $1.05 per share, in the previous year. More: - Yum reported a 3% decrease in global same-store sales for the quarter, diverging from StreetAccount's forecast of 0.2% growth.
- Only Taco Bell, among Yum's brands, experienced a 1% rise in same-store sales, with U.S. outlets up 2% and international outlets down 2%.
- KFC's same-store sales dropped 2%, with a notable 7% decrease in the U.S. but only a 2% decline internationally, buoyed by growth in China.
- Pizza Hut saw a 7% decline in same-store sales, with U.S. locations dropping by 6% and international divisions by 8%.
- Yum achieved a milestone as digital sales accounted for over 50% of total sales for the first time, offering a positive note amid underwhelming performance in other sectors.
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| 4 | | In Q1, Pfizer ($PFE) exceeded earnings expectations, reporting $0.82 per share, and surpassed revenue forecasts at $14.88B, despite a 20% decrease YoY due to declining COVID-19 product sales. Additionally, the company revised its full-year profit forecast, anticipating adjusted earnings of $2.15 to $2.35 per share for the fiscal year. More: - The revenue forecast remains steady at $58.5B to $61.5B, including $5B from its COVID vaccine and $3B from Paxlovid.
- Paxlovid's revenue totaled $2B, a 50% decrease YoY due to reduced deliveries and demand.
- Pfizer's revenue from its COVID-19 vaccine plummeted by 88% compared to the previous year, totaling $354M.
- Excluding COVID-related products, Pfizer's first-quarter revenue surged by 11%, fueled by robust sales of non-COVID items.
- Seagen's cancer products generated $742M in revenue, while Vyndaqel drugs saw sales of $1.14B, and Eliquis contributed $2.04B.
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| 5 | | CVS Health's first-quarter revenue of $88.44B missed expectations of $89.21B, and adjusted earnings per share were $1.31, below analysts' expectations of $1.69. As a result, the company revised its full-year profit outlook to $7 per share from $8.30, causing its stock to plummet more than 16% on Wednesday, its worst day since November 2009. More: - CVS Health's health insurance segment revenue surged by more than 24% to $32.24B, surpassing estimates of $30.69B.
- However, the segment's adjusted operating income fell far short of expectations at $732M, compared to the anticipated $1.19B.
- Compared to the expected 88.4%, the insurance segment's medical benefit ratio increased to 90.4%.
- CVS's health services segment revenue declined by nearly 10% to $40.29B, aligning with expectations.
- Sales from the pharmacy and consumer wellness division totaled $28.73B, slightly lower than the anticipated $29.5B.
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| 6 | | BlackRock ($BLK) has partnered with the Saudi Arabian government to launch BlackRock Riyadh Investment Management, a multi-class investment firm based in Riyadh. The firm, wholly owned by BlackRock, will manage funds primarily targeting Saudi Arabia and the broader Middle East and North Africa region, with the Saudi Public Investment Fund committing $5B to anchor the venture. More: - BlackRock seeks to draw more foreign investment into Saudi Arabia and bolster its capital markets via investment funds from its new subsidiary.
- This step demonstrates BlackRock's endeavor to enhance connections and obtain investment mandates in the Middle East alongside other global asset managers.
- The agreement entails a non-binding memorandum of understanding with PIF, which commits to gradually invest up to $5B as the new firm meets predefined milestones.
- The agreement will add about a dozen professionals to BlackRock's Riyadh team, nearly doubling its current staff of fewer than 20 people.
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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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