🚨 Elon Musk's Warning

1) P&G’s Earnings Visualized 2) Netflix Bounces Back, 3) Tesla’s Earnings Visualized, and more!

Author

Carbon Finance
October 20, 2023

It’s Friday.

Some data bites we learned this week: Pfizer will begin selling its Covid-19 drug Paxlovid for nearly $1,400, Disney disclosed that ESPN generated over $16B in revenue in 2022, and OpenAI is looking to sell shares at an $86B valuation.

In today’s newsletter:

  • 🧼 P&G’s Earnings Visualized

  • đź“ş Netflix Bounces Back

  • 🏎️ Tesla’s Earnings Visualized

Let’s dive right in!

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🧼 P&G’s Earnings Visualized

Procter & Gamble (P&G) exceeded analysts’ expectations by reporting core earnings of $1.83 per share on $21.9B revenue in its first quarter of fiscal 2024. Despite strong results showcasing consumer resilience, with a 6% sales increase from the previous year, P&G issued a caution for investors, hinting at the negative impacts of a stronger U.S. dollar. The rising strength of the U.S. dollar can negatively affect multinational companies’ profits and revenue earned in foreign currencies.

Despite raising prices on products for about two years, P&G has seen minimal pushback from retailers but noticed some consumers shifting to cheaper alternatives, leading to "pricing-related volume declines" in various brands. While most segments reported volume drops, the health-care division witnessed growth due to strong demand for products like Vicks.

đź“ş Netflix Bounces Back

Netflix saw a substantial increase in Q3 subscriber numbers, adding nearly 9M new subscribers, and announced price hikes for its Basic and Premium plans in the US, UK, and France. The company's Q3 revenue reached $8.54B, slightly surpassing expectations, driven by new initiatives like its crackdown on password sharing. Despite the growth in subscribers, average revenue per membership fell by 1%, but profitability metrics like operating margin and free cash flow exceeded forecasts.

Netflix’s price hikes in the US are as follow: the "Basic" plan, which is no longer available, has increased from $9.99 to $11.99 per month. The "Premium" plan, which offers 4K streaming, is now priced at $22.99 per month, up from its previous $19.99. New subscribers will see these prices immediately, while existing members will experience the hike in the coming weeks.

🏎️ Tesla’s Earnings Visualized

Tesla's Q3 results fell short of Wall Street expectations, reporting adjust earnings of $0.66 per share versus the expected $0.73, and revenue of $23.4B against the expected $24.1B. This was the first earnings and revenue miss since Q2 2019. Elon Musk expressed major concerns about the high-interest rate environment and emphasized the need to make Tesla cars more affordable.

Elon also highlighted “enormous challenges” ramping up production of the long-awaited Cybertruck, with concerns about profitability in upcoming quarters due to complexities in vehicle production. To add icing on the cake, Tesla is now facing increasing competition in the EV market, such as a competitive pricing war in China’s electric-vehicle sector.

🧑‍💻 LinkedIn Layoffs. LinkedIn is laying off 668 employees, 3% of its workforce, as part of broader cuts by parent company Microsoft $MSFT. [AP]

🛍️ Retail Sales Still Strong. U.S. retail sales grew by 0.7% in September, with consumers continuing to spend despite economic challenges and inflation concerns. [CNN]

đź‘» Snap Growth. Snap $SNAP shares surged after CEO Evan Spiegel's optimistic 2024 outlook, including over 20% ad revenue growth and 475 million daily active users. [B]

⚽️ ManU For Sale. Sir Jim Ratcliffe is nearing a deal to buy a 25% stake in Manchester United $MANU, potentially leading to full club control. [ESPN]

đź’ľ Chip Restriction. The U.S. is intensifying restrictions on AI chip sales to China, impacting chip stocks such as Nvidia $NVDA, Broadcom $AVGO, Marvell $MRVL, AMD $AMD, and Intel $INTC, to prevent China's potential military AI advancements. [NBC]

Notable Companies Reporting Earnings Next Week:

  • Monday:

    • Cadence Design Systems ($CDNS), Brown & Brown ($BRO), Logitech ($LOGI)

  • Tuesday:

    • Microsoft ($MSFT), Visa ($V), Coca-Cola ($KO), Novartis ($NVS), Texas Instruments ($TXN), Verizon ($VZ), Waste Management ($WM), 3M ($MMM), Spotify ($SPOT), Snap Inc. ($SNAP)

  • Wednesday:

    • Meta Platforms ($META), Thermo Fisher ($TMO), T-Mobile ($TMUS), IBM ($IBM), ServiceNow ($NOW), Boeing ($BA), ADP ($ADP), Moody’s ($MCO)

  • Thursday:

    • Amazon ($AMZN), Mastercard ($MA), Merck & Co ($MRK), Linde ($LIN), Comcast ($CMCSA), Intel ($INTC), UPS ($UPS), Altria ($MO), Ford ($F)

  • Friday:

    • Exxon Mobil ($XOM), Chevron ($CVX), AbbVie ($ABBV), Charter ($CHTR), Aon ($AON)

All of the companies that are reporting earnings this week can be viewed here.

Major Trades Published 10/16 - 10/19

Buys

  • Cerevel Therapeutics ($CERE)

    • Insider: Adam Koppel (Director)

      • # of Shares Purchased: 5,480,052

      • $ Amount: $124,999,986

      • SEC Forms: [1]

    • Insider: Christopher Gordon (Director)

      • # of Shares Purchased: 5,480,052

      • $ Amount: $124,999,986

      • SEC Forms: [1]

    • Insider: Perceptive Advisors (Director)

      • # of Shares Purchased: 876,808

      • $ Amount: $19,999,990

      • SEC Forms: [1]

  • Delta Airlines ($DAL)

    • Insider: David Taylor (Director)

      • # of Shares Purchased: 10,000

      • $ Amount: $330,900

      • SEC Forms: [1]

Sells

  • United Health Group ($UNH)

    • Insider: Stephen Hemsley (Director)

      • # of Shares Sold: 121,515

      • $ Amount: $65,688,591

      • SEC Forms: [1]

  • DoorDash ($DASH)

    • Insider: Stanley Tang (Director)

      • # of Shares Sold: 186,000

      • $ Amount: $14,058,912

      • SEC Forms: [1], [2]

  • AutoZone ($AZO)

    • Insider: Domingo Hurtado (Sr. VP)

      • # of Shares Sold: 2,950

      • $ Amount: $7,790,474

      • SEC Forms: [1]

  • GitLab ($GTLB)

    • Insider: Sytse Sijbrandij (CEO)

      • # of Shares Sold: 155,000

      • $ Amount: $7,281,489

      • SEC Forms: [1]

  • Cola-Cola ($KO)

    • Insider: James Quincey (CEO)

      • # of Shares Sold: 92,029

      • $ Amount: $4,956,489

      • SEC Forms: [1]

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