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Even Being Forced to Cut Costs Is Not Preventing Volkswagen to Go Electric Full-Speed Ahead

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EV companies in stock market

On Saturday, Volkswagen AG (OTC:VWAGY) announced it is considering further cost cuts in order to cope with the downturn. The Wolfsburg-based German multinational automotive industry tycoon is surely not the only one which will have to significantly cut R&D expenditure, investments and fixed costs. Even the mighty have fallen as the German giant sold the largest number of passenger cars in both 2019 and 2018 despite a cataclysmic outlook in the auto-making industry. But COVID-19 spared no one.

Electric SUV novelty – ID.4

The ID.4 is basically the same car as the ID.3 but with different bodywork. Volkswagen says ID.4 production will be carbon neutral throughout the entire value chain. But engineering an electric car platform is an expensive business and even the German giant fears the costs of electrification. But it has made its architecture of the ‘modular electric drive matrix’ openly available to its peers. Ford Motor (NYSE:F), for example, has signed up to use the VW underpinnings.

Advantage over competitors

The launch of the ID.3 marked the start of a new electric era for Volkswagen. The upcoming ID.4 crossover will be the first electric Volkswagen model that is offered in the US. But this is just beginning of of VW’s electric onslaught. Volkswagen will also launch production versions of the ID and smaller electric cars. VW is able to cover a broad range of segments as each ID. model has a different body style.

But they all have one thing in common: the dedicated MEB platform. In contrast, other automakers such as Bayerische Motoren Werke AG (OTC:BMWYY) and AB Volvo (OTC:VLVLY) use platforms that support multiple powertrains. Although Volvo’s sales have soared 40% in May compared to April, they are still down 25.5% from last May. Even with sales in China growing 21.8% in May, Europe’s fell about 50 so the  the Swedish car maker is still not in calm waters. Meanwhile;, Volkswagen is going full speed ahead in developing something that gives customers big advantages: a small footprint, big interior, and fully digital architecture.

Unlike Tesla Inc (NASDAQ:TSLA) with its futuristic design, VW is being brave step by step. It wants to avoid alienating buyers who are still adjusting to electric cars.

COVID-19 Impact Will Be Felt

Volkswagen’s is using a lifetime opportunity to create a new user experience and design expression in the electric era. But weak demand will most likely keep harming the company’s net liquidity at least until July. Moreover, not all group brands are expected to achieve a positive result in 2020. This does mean the main VW passenger car brand must reduce its material overheads by as much as 1/5. Fortunately, VW, along with BMW and Daimler AG (OTC:DMLRY), capitalized on Germany’s ability to contain the virus more efficiently than other countries. Otherwise, things would have been much worse than short-term cost cuts.

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

BenzingaEditorial

The EV Age Is Dawning Well Ahead of Schedule

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Worksport Terravis Charging System

Electric vehicles have arrived. They have a critical role in addressing climate change by reducing local air pollution. As for the corresponding infrastructure, the European Union has nearly 200,000 chargers and the US is far behind with less than half of that. According to Transport & Environment, the EU alone needs 3 million. If elected for President of the United States, Joe Biden plans to install half a million chargers as part of a larger investment in EVs that will result in one million well-paying employment opportunities with the goal to re-establish the US as a leader in the auto industry globally.

Although there’s a long way to go to an EV future, both US and EU automakers are racing full speed ahead.

GM announces its first EV factory

General Motors (NYSE: GM) just announced its Detroit-Hamtramck Assembly Center will be transformed to Factory Zero. GM’s zero-crashes, zero-emissions and zero-congestion future is one step closer as the factory will begin producing the GMC HUMMER EV pickup in late 2021. The Detroit giant plans to invest $2.2 billion to convert the plant to an all EV production center. GM remains committed to source 100 percent of its U.S. facilities with renewable energy by 2030, with all global facilities reaching the same destination by 2040.

 Worksport

Worksport Ltd,, (OTC:WKSP) just announced it has signed an agreement with Hercules Electric Mobility Inc., Detroit, Michigan. Worksport’s TerraVis™ tonneau cover solar charging system will become the Tier One OEM supply partner for Hercules’ forthcoming Alpha Electric Pickup. An agreement between the two companies is expected to generate up to US$70 million in future revenues for Worksport™.  The economic value of this one relationship is expected to be of profound significance for Worksport and its future growth and development, according to its CEO Steven Rossi. Hercules will integrate the solar charging tonneau cover into its core architecture to give freedom to Hercules drivers, specifically “plug freedom.” Worksport entered the most exciting period since inception and it now has a well-established partner and a project that will quickly demonstrate the TerraVis™ system’s attractive and leading-edge approach to providing solar power to the light truck industry.

VW

Volkswagen (OTC: VWAGY) plans to begin selling the ID.4, an “intelligent design” sport EV in the United States next year. When the ID.3 was initially launched with the 1st Edition, the platform looked promising, but the price was too close to the Tesla (NASDAQ: TSLA) Model 3. But, the Germain giant has announced a sub-$39,000 Life version of the ID.3, which is a much more tempting proposition. As electric cars become more mainstream, the industry is rapidly approaching the point where owning an EV will be just as cheap or even cheaper than owning an ICE vehicle.

Outlook

Last year, global EV sales increased 40% YoY as they reached a volume of 2.1 million. Until now, 2020 has been far kinder to EVs than it has been to traditional cars. A decade ago, there were only 17,000 electric cars on the roads across the globe. By 2019, that figure expanded to 7.2 million. Rest assured, the age of EVs is dawning well ahead of schedule.

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

Airlines- There Will Be Tears

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Airliners Stock News Corona

United Airlines (NASDAQ: UAL) posted its third huge quarterly loss of the year, saying it is ready to “turn the page” and prepare for a recovery from the worst financial crisis ever faced by the airline industry. United is the second US airline to report results after Delta Air Lines (NYSE: DAL) announced a $2.1 billion operating loss Tuesday. US airlines are expected to report about $10 billion in losses for the quarter.

United Airlines

Revenue tumbled 78% which is, at the very least, less than the 87% drop in the previous, second, quarter. But, when the revenue from passengers is adjusted for UA’s 70% reduction in capacity, it fell only 47%. United believes this to be the smallest drop of any major US airline on that basis.

Net loss of $1.8 billion, however, exceeded the previous quarter’s loss. But this wasn’t a surprise considering the circumstances and shares did not see any significant change following the report. However, excluding special items, the loss was $2.4 billion which is slightly less than the $2.6 billion from the previous quarter but also a bit more than analysts’ forecasts.

Even though the negative impact of the pandemic will persist in the near term, United is focused to bring its furloughed employees back to work and position itself to emerge as the global leader in aviation. CEO Scott Kirby said the company succeeded to trim the amount of cash it is burning from $40 million a day in the prior quarter to a daily average of $25 million.

The cash drain was stopped partly because 9,000 employees left the company voluntarily and United reached deals with several of its unions through which it both reduced labor costs and lowered the number of involuntary furloughs. But, as soon as federal prohibitions against involuntary job cuts in the industry ended in September, United furloughed an additional 13,000 employees immediately on October 1st in attempt to continue reducing the cash burn. But unlike Delta which expects to stop spending more cash than it earns by spring, United gave no end date for its own cash burn.

Since March, United has raised $22 billion in cash through a sale of stock, the mortgaging of its frequent flyer program, federal loans, grants and other borrowing. It ended the quarter with $13 billion in cash. Moreover, it is able to borrow an additional $6 billion. With these actions combined, United believes it can fly through the current storm.

Delta posts another massive loss

Delta’s third-quarter revenue came up short of analysts’ expectations at $3.06 billion. This is more than a 75% drop from the same period last year. Its net loss amounted to $5.4 billion which is quite a sharp contrast compared to a profit of $1.5 billion in the year-earlier period.

Delta has lost more than $11 billion in the last two quarters that were swiped by the pandemic. The carrier cut its cash burn to $18 million a day in September from $27 million at the end of the previous quarter.

Outlook

Although travelers are getting less scared of flying and demand is slowly starting to recover, the carrier warned it could take years for sales to recover. Delta’s president warned that the recovery could take as long as 2 years or even more. There is more turbulence ahead.

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

COVID-19 Took Another Bite from Walgreens But It Left Better-Than-Expected Earnings

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Earnings

On Thursday, Walgreens Boots Alliance, Inc. (NASDAQ: WBA) revealed its earnings report for its fourth quarter and 2020 FY that ended on August 31st, 2020. Walgreens has topped earnings forecasts and sees profit growth despite the pandemic. Although COVID-19 took another bite out of Walgreens Boots Alliance quarterly numbers, at least this time, it left behind better-than-expected earnings. Following the release, Dow member’s stock rose 5.6%, which trimmed its six-month drop to approximately 12.75%.

Q4 highlights 

Fourth quarter sales increased 2% to $34.7 billion but net income fell nearly 45% to $373 million. The decreases in both net earnings and adjusted net earnings were primarily due to an estimated adverse COVID-19 impact of $520 million, lower U.S. pharmacy gross profit and year-on-year bonus changes. The negative impact was partially offset by Transformational Cost Management Program savings.

Its overseas business struggled again as the pandemic hampered customer traffic and prescription demand in the U.K. On a bright note, sales and prescriptions grew in United States. The largest U.S. pharmacy chain with roughly 9,000 locations announced it is forced to close more U.S. stores than additionally planned.

A slow recovery from COVID-19

While the company anticipates a gradual reduction in COVID-19 impacts, the first half results will continue to be negatively impacted when compared to the pre-COVID-19 first half of fiscal 2020. However, for the second half, the company anticipates strong adjusted EPS growth, as these effects subside and recovery starts taking place in Walgreen’s key markets.

Outlook

Even with the pandemic aside, Walgreens needs to evolve its business model to be able to keep up with competitors such as CVS Health Corporation (NYSE: CVS). Besides focusing on surviving the storm, it has key strategic initiatives to implement. It needs to accelerate the Boots UK turn-around. It needs to advance its omnichannel capabilities to catch the online retail wave. Its digital agenda involves the launch of myWalgreens, an enhanced customer loyalty program which will serve more than 100 million consumers. The goal is to expand convenient pickup options so customers can have their product within 30 minutes. Also, it will be leveraging its investment in VillageMD as it plans to open 500 to 700 full-service doctor offices over the next five years. The initial phase of openings is planned during fiscal 2021 to catch the telemedicine wave, the adoption of which has only accelerated with the pandemic. Moreover, it needs to continue implementing its Transformational Cost Management Program that has already brought in significant cost savings. At the end of the day, Walgreens did exceed analysts’ earnings expectations in the fourth quarter. Moreover, it expects a major comeback in fiscal 2021 as it projected “low single-digit growth in adjusted earnings per share” in its guidance. Although it estimates a challenging first half of the year, there is increased optimism for the second half.

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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