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GM Beats Wall Street Estimates Despite Strike Hit

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GMC News Earnings

The 40-day UAW strike that ended on Friday almost wiped out the General Motors Companies (NYSE: GM) free cash flow for the year and will end up costing the company $3.8 billion in full year earnings. But, the company’s third quarter results easily beat up estimates despite the $1 billion strike cost for the quarter. This national strike was the longest in almost 50 years. As a consequence, the company has lowered its guidance for the year as the strike’s cost was significantly higher than expected.

Third quarter results

Revenue of $35.47 billion exceeded the forecasts of $33.82 billion resulting in adjusted earnings per share of $1.72 versus the expected $1.31. The strike has taken 52% per share of the company’s earnings whereas the revaluation of its investment in Lyft (NASDAQ:LYFT) and warrants from PSA Group deducted an additional 15 cents per share.

Competition – Trump administration’s side

The pressure posed by toughening emission standards has brought competitors together as GM unites with Toyota Motor Co (NYSE:TM) and Fiat Chrysler Automobiles (NYSE:FCAU) to back up Trump’s administration in the battle with California’s officials. The idea is to help themselves remain competitive as it would greatly ease their costs. Toyota just announced on Monday that it will boost its hybrid presence with its plant in Poland by 2022 due to increased interest in Europe. Toyota and Fiat Chrysler are among the 3 automakers that constitute almost 30% of America’s total vehicle sales but Fiat admitted it needs more electric cars and Toyota has doesn’t yet have a serious electric car in the making, so the clock is ticking as the electric era is upon the industry. And this move has only led to critic of their leadership as siding with the government that allows the country to burn due to irresponsible environmental policies.

Competition: the sustainable side

On the other side of the emission argument, there are many automakers, such as Honda (NYSE:HMC), Volkswagen (OTC: VWAGY) and Ford Motor Co (NYSE:F) who just issued safety recalls on 320,000 vehicles in North America, potentially resulting in $250 million in costs. The number 2. Detroit automaker reported strong third quarter results last Wednesday yet its stock plunged the next day due to reduced full-year guidelines as the company expects stronger headwinds in its last quarter of the fiscal year. Besides increased warranty costs, the company has to increase its spending in order to remain competitive and the Chinese market is taking much longer than expected to recover with total vehicle sales dropping 11.7% during the first nine months of the year. Ford has already started reducing its losses there which could improve its profitability and possibly even withdraw, considering the company lost $1 billion there last year. But, the latest decision of GM, Toyota and Fiat can only boost demand for these ‘sustainability-oriented’ companies, including the all-electric pioneer Tesla (NASDAQ:TSLA) who finally just reported its first profitable quarter.

Outlook

The strike ended with pay rises and bonuses along with other benefits for most workers so it is an overall ‘draw’ for the Detroit giant. But the good news is that GM shares have almost completely recovered from double digit declines during strike and they did beat estimates. The company is far from its pre-strike targets that were set in August when they reset their full-year guidance of $6.50 to $7 earnings per share. But perhaps the most shocking fact about this strike is that how little it mattered to U.S. citizens that almost 50,000 workers walked out of their jobs due to all the impeachment drama, so many Americans were unaware of GM’s negative publicity. It will probably trim the US’ total GDP, and not just in the company’s lost output, but through ripple effects in other industries such as auto-parts suppliers, airlines to communities where GM operates. But, the reputational damage of the company’s leadership is what can do most harm, benefiting sustainable companies who are actually building an all-electric infrastructure to meet the near future.

This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.

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BenzingaEditorial

Three Stocks That Won Last Week’s Popularity Contest

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Overwin Corona Virus

Last week was a good week for a lot of companies which reported their earnings. But a few of them truly stood out as blockbusters. Wayfair (NYSE:W), LivePerson (NASDAQ:LPSN), and Fiverr International (NYSE:FVRR) are some of them as they stepped up the game with their quarterly results. Let’s take a closer look at why these three publicly traded companies won last week’s popularity contest.

Online furniture retailer

Wayfair had a jaw-dropping performance since the mid-March lows. Net revenue of the online furniture retailer soared 84% to $4.3 billion. It greatly exceeded the $4.06 billion that analysts were targeting. If there is such a thing as a ‘perfect storm’, the pandemic was exactly that for Wayfair which historically has been struggling to achieve profitability. This time round, this was not the case as its active customer base grew 46% over the past year. By being forced to stay at home, consumers felt more inspired to make their homes more beautiful.

Wayfair’s adjusted profit came to $3.13 a share, which more than tripled Wall Street’s estimate. Moreover, the momentum is still being maintained throughout this quarter as sales are 70% higher so far. The company is growing a lot faster than the 20% year-over-year gain it reported during the first quarter of this year.

Tech stock

LivePerson provides an online chat customer support when the site visitor is getting frustrated or, even worse, is about to abandon a shopping cart. Its concept clearly works as the company exhibited its strongest top-line growth in 12 years. This 29% increase is its healthiest growth since the summer of 2008.

The online solutions provided 134 deals during the quarter. Seven of those contracts are expected to bring in at least $1 million in revenue over the following year.

LivePerson’s report might not have been mind-blowing, but it was a classic example of an excellent performance. Its new 2020 outlook includes revenue growing at a range between 22 to 24 percent, whereas just three months ago, the company expected it to be in the range between 17 and 22 percent.

The gig economy to counteract these challenging times

Fiverr has been one the winners during the pandemic as it runs a marketplace with offers of one-off jobs with attractive prices. It helped many survive the new reality shaped with pay cuts and job losses.

Its latest quarter saw its revenue rise 82% as its base of active buyers of freelance services increased 28%. Moreover, average spend per buyer increased 18%.

The increased supply is easy to answer, but so is the increased demand. By not losing time in daily commutes and other outside activities, people reprioritised and suddenly found the time for passion projects or simply new opportunities.

The Fundamental Lesson From the COVID-19 Pandemic

These three companies earned their gains fair and square, and in more ways than one. They got the job done during a time of crisis. Wayfair helped people feel better inside their homes as it beautified their self-quarantines. LivePerson helped both companies retain buyers as well as consumers to make their purchases. And last but not least, Fiverr’s platform enabled many to earn extra cash on the side and feel more financially stable. These examples portray perhaps the biggest lesson of the pandemic: people learned what is important to them and what they want to devote their time and effort to. The companies who met those needs were more likely to survive the storm. Some will emerge even stronger out of it.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Can Oil Giants Play the Long Game?

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oil industry stocks

Over the last few years, the performance of the energy sector has been among the worst-ones. It fell 45% over the last half of a decade whereas the S&P rose 59% over the same period. If we specifically look at oil, there is the supply and demand side to consider. Forecasts say there’s probably enough of oil to last during the next 100 years, considering current consumption trends. But demand is far less certain.

Supply and demand

We are running out of “easy” oil but forecasts on how much is left do vary wildly. The biggest problem is that the vast majority of R&D spending is focused on unconventional oil, and not on replacing oil. The industry has been focused on making shale more economical for almost a decade now. Moreover, the Trump administration has made it clear that it will not allow the sector to vanish. The economic equation behind it is rather simple. The less oil is left, the more money there will be in sucking out every drop. Scarcity is a great profit booster. Greater profits encourage companies to expand, not contract. Therefore, the fundamental concept of economics ‘advise’ sticking to these depletable sources until they are exhausted.

Even the Oil Giants Are Struggling

It would be challenging to find an integrated oil and gas company with a better balance sheet than Chevron (NYSE: CVX). But even with a strong financial position, Chevron still depends on the price of oil. Along with its U.S. competitor ExxonMobil (NYSE: XOM), they are the only two energy companies that hold the title of Dividend Aristocrats. This status is given to any company in the S&P 500 that has increased its base dividend for at least one quarter of a century but in an uninterrupted manner. As for Chevron, it has an impressive track record of 32 consecutive years. Moreover, it has increased its dividend by 79% over the last decade alone. But the pandemic devastated its profits.

Royal Dutch Shell plc (NYSE:RDS-B) has also swung to a historic and quite heavy loss with its latest quarter. The Anglo-Dutch oil titan warned that an uncertain demand outlook could curtail its third-quarter production. Most importantly, oil giants are aware that business may never return to normal.

The greener perspective

High prices are destroying the demand for oil as the world is turning to renewable sources and other energy storage mediums. Moreover, climate change concerns are creating significant regulatory pressure. The developed world is also taking action to promote electrification. The UK and France plan to ban new gasoline and diesel vehicle sales in certain regions by 2040. Moreover, electric vehicles are central to Europe’s post-pandemic recovery plan.

Electrification

EVs could truly eliminate the majority of oil consumption. But they need to be accompanied by significant improvement in battery technology and an expansion of the charging infrastructure. Moreover, they have to become more accessible price-wise. EV pioneer Tesla Inc (NASDAQ:TSLA) as well as startups such as electric and hydrogen-powered Nikola Corporation (NASDAQ:NKLA) disrupted the whole world as they are the ones who made this reality possible.

Oil Companies Can Still Find a Way to Exist in the New Era

As battery-electric vehicles go mainstream, it’s not hard to imagine oil companies utilizing their massive infrastructure to get into the battery-charging business. Many companies are already exploring these options.  Last week, the British oil and gas giant BP (NYSE:BP) committed to cut its oil production over the coming decade with very ambitious energy targets. BP plans to invest tens of billions of dollars over that decade to become one of the world’s largest renewable power generators. It might even settle for profits lower than it gets from oil in order to achieve that goal. But, it’s not like we’ll stop needing oil overnight. If anything, air travel is still fully dependent on fossil fuels.

Takeaway- nothing happens overnight

The bottom line is that some oil companies, even the giant themselves, may not survive the transition. But no one who works in the industry today will be around to see this entirely new oil-free future. It is like the story of the telephone industry: a telephone serves the same purpose it served one hundred years ago, but smart phones are giving us a ton of stuff on the side that no one could have possibly predicted back then.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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BenzingaEditorial

Four EV Disruptors to Keep an Eye on

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Electric Vehicle Companies in the Automotive Industry - Success Despite Corona virus

Wall Street has been giving EV stocks quite a lot of attention lately and for a very good reason. The share prices of many electric vehicle manufacturers have hit all-time or at least 52-week highs. This is even more impressive considering that the pandemic created quite the turmoil for the global economy. Afterall, climate change will not wait for us to win the battle against COVID-19. We’ve gathered a list of four disruptive players who are all set to win the EV race.

The EV emperor

Tesla (NASDAQ:TSLA) is the first name that investors, as well as the whole world, relate to EVs. The EV pioneer is targeting half a million deliveries in 2020, which would mark a 35% YoY growth.  In late July,  Tesla reported its fourth consecutive quarterly profit. By doing so, it became eligible to be considered for inclusion in the S&P 500 Index. However, for Tesla to actually be considered, an existing member needs to be taken off the index due to no longer meeting the eligibility criteria. On the other hand, Tesla is already having its best year ever. Year to date, its stock is up an eye-popping 260%. And with its newly announced Austin factory, which will be its biggest yet, Tesla is not showing any signs of slowing down.

If you believe in the future of EVs, Fun-Utility Vehicle (FUV) could be a less expensive way to enter the game

Oregon-based Arcimoto (NASDAQ:FUV) went a long way since going public almost three years ago. Since then, it has built its production facility, completed regulatory compliance for its flagship EV- Fun Utility Vehicle (FUV), started production one year ago and is already now delivering vehicles to early customers. FUV is a tandem two-seat, three-wheeled electric vehicle. And there are two EVs which are due to start production by the end of the year. The customizable Deliverator can transport a variety of food products, whereas the specialized Rapid Responder is specifically designed to support emergency and law-enforcement services.

Low-speed EVs that serve a specific purpose

Texas-based EV manufacturer of purpose-built and automotive-grade EVs, Ayro (NASDAQ:AYRO), began trading on May 29. This newcomer creates sustainable electric solutions through light-duty vehicles for open or closed infrastructures such as golf courses and airports. LSEVs do serve a niche, but this is a growing, market with great potential in the upcoming decade.

The integration of solar technology

It’s no secret that EV require a supply of energy. This energy can derived from various type of batteries and sources. Thus the sector is also becoming quite diverse based on vehicle type, battery type, etc. Worksport (OTC:WKSP) offers a full line of innovative, high quality yet affordable tonneau covers for pickup trucks, US’ favorite vehicle. Its SC3 and TC3 are high quality basic covers that undermine competing products with a lower price. SC3 Pro and SC4 come with major product enhancements that will not only improve the user experience but even the installation process. But Worksport’s crown jewel is TerraVis which will redefine pickup beds as they integrate complex solar technology. Earlier today Worksport announced a launch date for TerraVis. By offering a disruptive product at an affordable price, Worksport has the potential to disrupt much more than the market for tonneau covers as this technology can also increase the driving range of any EV.

EVs are all set to transform the world

In 2019, EVs accounted for 2.6% of global car sales. 2019 also marked their 40% year-over-year increase. By 2027, analysts expect the market’s value to reach $802 billion. Last year, the market’s value was approximately $162 billion. Therefore, this growth implies an impressive CAGR of 22.6% . Electric vehicles have all it takes to transform nearly every aspect of transportation, including fuel, carbon emissions, costs, repairs, driving habits and consequently- our everyday footprint.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure . IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you’re interested in becoming an IAM journalist contact: contributors@iamnewswire.com

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