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| Hello Insiders!! Today’s Business newsletter covers: - 🐜 Meat giant Tyson bets on bugs
- 👜 Deep Dive: Luxury brands face a decline
- 💊 J&J beats estimates, raises outlook on Medtech and pharma surge
If you enjoy reading this newsletter, please share it with your friends and colleagues. Make sure to continue reading the Quarterly Earnings Report and the Quick Hits. Thank you!! Shriram
p/Shriram | |
| 1 | | Tyson Foods, a prominent U.S. meat producer, has made an undisclosed investment in Dutch insect ingredient manufacturer Protix and is working together to establish a U.S. factory. This facility will employ black soldier flies, nourished with animal waste, to create feed for pets, poultry, and fish, primarily emphasizing insect protein in animal food rather than direct consumer applications. More: - In 2021, Rabobank projected that demand for insect protein, mainly in animal feed and pet food, could rise to 500,000 metric tons by 2030, a substantial increase from the current 10,000 metric tons.
- Tyson partners with Protix to address the environmental impact of the meat business, minimize waste, and generate new revenue sources.
- Various food wastes can be converted by insects, such as black soldier flies, into valuable fat and protein for animal feed.
- Reusing waste materials and producing protein for animal use is considered feasible and effective in insect farming.
Zoom Out: - Mars Petcare launched Lovebug in 2021, a U.K.-exclusive cat food brand composed entirely of black soldier fly larvae insect meal, featuring essential nutrients and a vegan coating, making it the first 100% insect-based cat food from a major supplier.
Q: What innovative and sustainable practices could the meat industry adopt to tackle food waste and environmental impact? Join the conversation here. |     | |
| 2 | | 
What the numbers say: LVMH's wines and spirits division, including brands like Hennessy, experienced a 14% drop in sales, with the U.S. market showing weakness due to the expiration of pandemic stimulus checks. Sales of luxury watches and jewelry fell below expectations, while LVMH reported 9% sales growth in the third quarter compared to the previous year, which was significantly lower than the pace in the second quarter. Relevance: The luxury product market has decreased among aspirational consumers and across product categories and geographical areas. In the third quarter, wealthy European customers who had previously spent money on luxury items became more frugal. Weaker demand will probably make it harder for the industry to boost prices, affecting profit margins. More data: After a sales slowdown, LVMH's stock fell by 6%, contributing to a 25% market value drop over the past six months. Other luxury brands like Burberry and Kering also saw stock declines as the luxury industry lost favor with shareholders with high post-pandemic Chinese demand expectations, necessitating a balance between cost-saving and advertising efforts to maintain brand desirability. | | | |
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| 3 | | Johnson & Johnson (J&J) outperformed expectations in Q3, with adjusted earnings per share at $2.66, surpassing the expected $2.52, and revenue reaching $21.35B, slightly exceeding the projected $21.04B. The company raised its 2023 full-year guidance, anticipating sales between $83.6B and $84B, up from the previous range of $83.2B to $84B, and adjusted earnings per share between $10.07 and $10.13, compared to the prior forecast of $10.00 to $10.10. More: - The company experienced 6.8% YoY sales growth in the third quarter, with J&J's shares closing over 1% higher after the earnings release but recording a more than 12% loss for the year.
- The company's medical devices business achieved nearly $7.46B in sales, marking a 10% increase YoY, attributed to J&J's acquisition of Abiomed, a cardiovascular medical technology company, in December.
- As a result of splitting from consumer health subsidiary Kenvue, J&J reported a $21B one-time non-cash gain.
- With the help of goods like Erleada, Stelara, and Darzalex, pharmaceutical sales reached $13.89B (5% up YoY), slightly offsetting a fall in sales of other medications.
- Q3 quarter saw no sales of J&J's COVID vaccination in the U.S., although it did generate $41M in revenue abroad.
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| 4 | | Tesla's third-quarter net income saw a sharper-than-expected 44% decline, primarily influenced by continuous price reductions affecting profitability. Elon Musk, the CEO, voiced worries over economic issues, including rising interest rates and how they would affect customers. More: - Musk stated that there would be "enormous challenges" in accelerating the manufacturing of the long-delayed Cybertruck and that it would take up to 18 months before it made a meaningful positive cash flow contribution.
- Like traditional automakers, Tesla's operating margin decreased to 7.6% in the third quarter from 17.2% in the prior year.
- Following the Q3 report, Tesla's stock fell almost 4% in after-hours trading.
- The corporation reiterated that it will supply 1.8 million cars to consumers in 2023, although it did not specify how it would grow next year.
- Along with slower growth and unsold inventories, Tesla is dealing with a more competitive electric vehicle industry.
- Tesla's car gross margin dropped higher than anticipated in Q3, from 26.8% in Q3 2022 to 16.3% in Q3.
- In the third quarter of 2022, Teslas sold for approximately $54,000 on average, while in the same period the previous year, they sold for roughly $44,000.
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| 6 | | Nasdaq Inc. announced Q3 sales of $940M, reflecting a 6% increase, surpassing analyst estimates of $931.6M, with much of the overachievement credited to Nasdaq's Capital Access Platforms unit, particularly its listing services division. In Q3, Nasdaq achieved its fastest annual revenue growth in a year but its slowest Q3 growth since 2019, hosting 84% of public listings in the first nine months of this year, including significant IPOs. More: - While index revenues increased by 15%, the Capital Access Platform division's sales increased by roughly 8%.
- Chief Executive Officer Adena Friedman stated that it anticipates a surge in initial public offerings (IPOs) in the first half of 2024, citing a "very good pipeline" of firms, many of whom intend to list in H1 of that year.
- Nasdaq is scheduled to finalize the purchase of Adenza later this quarter, which can potentially increase recurring revenue streams, even with a roughly 19% decline in Nasdaq's stock price this year.
- Nasdaq's anti-financial crime section had a 21% increase in sales to $93M following its acquisition of Verafin in 2021.
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| 7 | | Quick Hits: - Don't settle for the sidelines. Participate in Sandhill Markets' auctions and bid on shares of pre-IPO giants like Stripe, Databricks, Andruil, and OpenAI.*
- From 2025, Toyota's U.S. electric vehicles will feature charging ports compatible with Tesla's North American Charging Standard (NACS), replacing American automakers' current Combined Charging System.
- After nearly a month of striking for higher pay and better healthcare, United Auto Workers union members at the Mercedes supplier ZF's Alabama plant returned to work on Thursday.
- On Thursday, the 10-year U.S. Treasury note yield briefly breached 5% for the first time since July 2007, heading for its most significant weekly gain since April 2022, buoyed by robust economic data.
- CVS is discontinuing sales of specific cough and cold medicines, primarily those with the decongestant phenylephrine, following an FDA advisory panel's determination that this ingredient doesn't effectively treat oral nasal congestion.
- Final day to invest in LiquidPiston is 10/24. Become a LiquidPiston investor before it's too late.*
*This is a sponsored listing. | | | |
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Term of the Day Conversion rate: Conversion rate is the percentage of visitors to a website or landing page who take a desired action. Question of the Week What perks would convince you to return to the office? Join the conversation |
INSIDE BUSINESS LEADERBOARD (7 DAYS) |
 | 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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