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BenzingaEditorial

Amazon’s New Era With MGM

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As Jeff Bezos prepares to pass the baton to the new CEO in July, Amazon (NASDAQ: AMZN) is showing no signs of stopping after posting impressive first-quarter results late a month ago with its largest strike in the “Streaming Wars” and its biggest push into entertainment to date.

Amazon lost the early streaming battle, but it is determined to win the war

As the demand for content rises, the new era for major Hollywood studio deals arises as the e-commerce and cloud titan has sealed the deal to buy MGM Holdings, the parent company of Beverly Hills-based MGM Studios, including its content portfolio and debt for $8.45 billion. According to the Wall Street Journal, this will be Amazon’s second-largest acquisition since acquiring Whole Foods for $13.2 billion in 2017.

Merger Mania is the next chapter of the streaming wars

The most recent merger was two weeks ago when WarnerMedia and Discovery announced they will unify brands thatinclude CNN, TBS, TNT, HGTV, Food Network, Discovery Channel, Warner Bros. movie studio, and streaming services HBO Max and Discovery+, providing AT&T (NYSE: T) with $43 billion in cash debt securities and WarnerMedia’s retention of debt. But it was in 2019 when Disney’s (NYSE: DIS) $71.3 billion deal to acquire 21st Century Fox has set a new precedent.

Can MGM the game changer for Amazon?

MGM has been one of the few hallmark Hollywood studio franchises that wasn’t invited to the M&A party but consolidation is in its DNA. Back in 1924, Metro-Goldwyn-Mayer came to life following the merger of studio firms Metro Pictures, Goldwyn Pictures, and Louis B. Mayer Pictures. It gave the world. “The Wizard of Oz,” “Singin’ in the Rain” and “Gone With the Wind” along with many other legendary creations.  Amazon is gaining name-brand movie hits like “Rocky” and “James Bond,” along with a historic library that will help it give its streaming peers a run for their money.

Bezos, Jeff Bezos, made the case for $8.45 billion price tag by saying that MGM has a vast, deep catalog of much-beloved intellectual propert  that talented people at MGM and Amazon Studios can reimagine and develop for the 21st century. With more than 4,000 feature films and about 17,000 television series in its library, the film studio that dates back almost a century will be bring high-quality storytelling to Amazon’s growing streaming service. In other words, MGM will help Amazon bolster its position in the increasingly crowded streaming space, although the Q1 report showed that Prime Video segment is growing as streaming hours were already up over 70% YoY over the past 12 months.

Don’t forget the core businesses are blooming

Q1 sales soared 44% YoY to $108.5 billion with income being $8.1 billion, up from $2.5 billion in the year-ago quarter.  Besides the profits from its core online retail business having soared, Amazon’s cloud business added $1billion in profits compared with the previous year. Although Amazon doesn’t disclose advertising sales, the company’s “Other” category saw its revenue grow 77% YoY to $6.9 billion.

Prime members are more engaged than ever

Prime membership is one of the holly grails of Amazon’s business model. Besides creating a recurring revenue stream, it helps Amazon maintain its customers as it provides them with a range of attractive benefits. Prime members have continued to shop with greater frequency and across more categories than before the pandemic, with Q1 report showing Amazon has over 200 million paying Prime members.

Q2 momentum

Amazon’s guidance for its Q2 revenue is to grow at a rate between 24% to 30% which is quite strong considering it is up against in the second quarter of 2020, when lockdowns fueled its e-commerce segment. In other words, Amazon is projecting continued strength across all of its segments and the king of e-commerce has a habit of exceeding expectations, and it did just that on April 29th when it outperformed revenue growth guidance of 33% to 40% with a 44% YoY increase.

Top line is as strong as ever

Q1earnings report showed U.S. sales accounted for 59% of total revenue as Amazon stepped up its capabilities during the pandemic. While U.S sales increased 40% YoY, international sales were up 60% and accounted for 28% of total revenue. Amazon made a lot of progress with widening its global reach in the first quarter, including the first international use of its cashierless Just Walk Out technology in London.

Retail is contributing more to the bottom line

Across the U.S. and international retail operations, operating margin more than tripled YoYto 4.9%, helping to push total operating margin during the first quarter from 5.3% to 8.2%. Although it was partially driven by lower pandemic-related costs, profitability was still much higher than before COVID-19 paralyzed the world. Net margin widened to 7.5% as well with net income of $8.1 billion more than tripling YoY.

Tomorrow is another day

Amazon has been the leader in e-commerce for years, but the the pandemic took things to a whole new level. The company has invested heavily to solidify its dominant position across all fronts, including its infrastructure to increase the speed and reach of its shipping services. These costs ate into the bottom line but Amazon is working to lower them such as through its own last-mile delivery network. The first-quarter earnings report was strong across the board as the titan continued to rack up sales, widen margins,and benefit from consumer shopping trends. Considering both its impressive strengths and MGM’s beloved intellectual property, there’s no reason to doubt Amazon is also capable of winning the streaming wars. Key metrics arguably miss many of the important strengths beneath the surface of this great company – the strengths that tell its long-term growth story.

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

Coca Cola Confirms Its World’s Beloved Brand Status

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For more than a century, The Coca-Cola Company (NYSE: KO) has been “refreshing the world in mind, body, and spirit”. The company aims to inspire moments of optimism, to create value and make a difference.

On Wednesday, the beverage giant revealed second-quarter earnings and revenue that beat Wall Street’s expectations, allowing it to raise its full year forecast for adjusted earnings per share and organic revenue growth. Most importantly, some markets rebounded from the pandemic, fueling revenue to surpass 2019 levels. Shares rose more than 2% in morning trading.

Q2 figures

Net income rose from $1.78 billion as it amounted to $2.64 billion. It resulted in adjusted earnings per share of 68 cents, exceeding the expected 56 cents. Net sales rose 42% with revenue of $10.13 billion that also exceeded the expected $9.32 billion. Excluding acquisitions and foreign currency, organic revenue rose 37% compared to last year’s biggest plunge in quarterly revenue in at least three decades due to lockdowns that severely dented demand.

A significant increase in marketing and advertising spend fueled the rebound but Coca Cola’s approach isn’t just about boosting spend, but also about increasing the efficiency of that spend. CFO John Murphy revealed that marketing dollars were doubled compared to last year’s quarter, when the pandemic forced the beverage giant to slash its costs to preserve cash.

Unit performance

All drink segments reported double-digit volume growth. Away-from-home channels, like restaurants and movie theaters, were rebounding in some markets, like China and Nigeria, but there are also markets that are still being heavily pressured by the pandemic such as India.

The department that contains its flagship soda saw volume increase by 14% in the quarter. The nutrition, juice, dairy and plant-based beverage business saw a volume growth of 25%, partly fueled by Minute Maid and Fairlife milk sales in North America. The same volume growth was seen by hydration, sports, coffee and tea segment. Costa cafes in the United Kingdom reopened and drove 78% increase in volume for coffee alone.

The risk of raising commodity prices

Like its F&B peers, Coke is facing higher commodity prices but it plans to raise prices and use productivity levers to manage the volatility in the second half of the year.

Outlook

For the full year, Coke improved its organic revenue growth outlook from high-single digit growth to a range of 12% to 14%. It also raised its forecast for adjusted earnings per share growth from high single digits to a low double digits range of 13% to 15%.

Putting it all together, executives emphasized the range of possible outcomes given the asynchronous recovery and dynamic of the pandemic. Coca Cola plans to build on the strong momentum by intensifying the amount and efficacy of promotions and continuing to innovate, what it does better than anyone and what helped it earn its brand status.

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

Automakers Are Hitting the Accelerator in the EV Race

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On Thursday, Daimler AG (OTC: DDAIF) has officially hit the accelerator in the e-car race with Tesla (NASDAQ: TSLA), revealing it will invest more than 40 billion euros in EVs by 2030. From 2025, three new vehicle platforms will only make battery-powered vehicles. One will cover passenger cars and SUVs, one will be devoted to vans and last but not least, the third will be home to high-performance vehicles that will be launched in 2025. Under its EV strategy, the inventor of the modern motor car will be renamed Mercedes-Benz as it spins off its trucks division by the end of the year. With its partners, it will build eight battery plants to ramp up EV production.

Upon the news that come just over a week after the EU proposed an effective ban on the sale of new petrol and diesel cars from 2035, shares rose 2.5%.

Automotive peers

Ahead of the EU’s announcement that is only part of a broad strategy to combat global warming, many automakers announced major investments in EVs. Earlier this month, Stellantis (NYSE: STLA) revealed its own EV strategy that includes investing more than 30 billion euros by 2025. Mercedes Benz isn’t the only one ‘going for it’ to be dominantly, if not all electric, by the end of the decade. Geely Automobile Holdings Limited’s (OTC: GELYF) Volvo Cars committed to going all electric by 2030, while General Motors Co (NYSE: GM) is aiming to be fully electric by 2035 and Volkswagen AG (OTC: VWAGY) even plans to build half a dozen battery cell plants in Europe.

Moving the debate

Daimler’s chief executive stated that  spending on ICE-related technology will be “close to zero” by 2025 but he did not specify when it will end the sales of fossil fuel-powered cars. Källenius wants to move the debate away from when will the last combustion engine be built to how quickly they can scale up to being close to 100% electric.

Tough decisions for Mercedes Benz

The undergoing shift will result in an 80% drop in investments in ICE vehicles between 2019 and 2026. This will have a direct impact on jobs because EVs have fewer components and so require fewer workers compared to their ICE counterparts. As of 2025, Daimler expects EVs and hybrids will make up half of its sales, with all-electric cars expected to account for most that figure, which is earlier than its previous forecast for 2030.

The battery- the Holly Grail

By 2023, Daimler plans to have a fully operational battery recycling plant in Germany. The industry leader Tesla just signed a deal with the world’s largest nickel miner to secure its battery resources as it prepares to begin its own tables battery in-house. Then there’s Worksport (OTC: WKSP) who will bring solar power to the EV table with its solar fusion TerraVis which will be fine-tuned and validated for prelaunch by the end of 2021. Although the first prototype is a solar-powered tonneau cover for pickup truck drivers, the company is also developing TerraVis COR which is a standalone product that offers remote power generation and storage. In other words, with its two-year partnership with Ontario Tech University, Worksport is fully equipped to power many automakers step into the electrification era.

The EV race is a journey like no other we have witnessed – and the participants are going full-speed ahead as they race to reshape the energy matrix of automotive industry.

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

Intel’s Q2 Results Show It Is Not Losing Focus

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Intel Corporation (NASDAQ: INTC) revealed its second-quarter 2021 financial results yesterday. The digitization transformation and switching to cloud services continue to accelerate, and a company like Intel sees that as the opportunity for an even bigger growth. Even with the current semiconductor shortage, Intel is not losing its focus on both innovations and the implementation of new solutions. The company’s CEO, Pat Gelsinger, appointed earlier in 2021, believes we are at the beginning of the semiconductor industry’s decade of sustained growth and that Intel has a unique position to capitalize on that trend. As the momentum is strengthening, execution is increasing, the company’s products are being chosen for top and flagship products. We can also see good results in other companies in the semiconductor business, like Texas Instruments Incorporated (NASDAQ: TXN) and Advanced Micro Devices, Inc. (NASDAQ: AMD).

 Second-quarter results

Intel’s second-quarter results are positive and the proof of the momentum building up, as mentioned by Gelsinger. GAAP revenues for Q2 were $19.6 billion, significantly higher than the expected $17.8 billion, and there was no change when looking back year over year. However, non-GAAP revenues were $18.5 billion, exceeding the April guidance by $700 million, and that is 2% up compared to the previous year. Intel’s Data Center Group (DCG) generated $6.5 billion compared to the expected $5.9 billion. Client computing generated the expected revenues of 9.95 billion, while the actual revenues were $10.1 billion. GAAP earnings per share were $1.24, while the non-GAAP EPS were $1.28, which also surpassed April’s guidance of $1.07.

 The good trend in the semiconductor industry

Another chipmaker, Dallas-based Texas Instruments, also reported Q2 earnings that topped the expectations. These good results were due to revenues growth and an increase in profits. The analysts expected revenues of $4.36 billion, and the company managed to generate $4.58 billion. That is a sales increase of 41% when looking year over year. Expected earnings per share were $2.05, while the analysts expected $1.83. However, the sales guidance for the current quarter was below the investors’ wishes, so the share price dropped upon the news.

 Outlook

As revenue, EPS, and gross margin exceeded the Q2 guidance, Intel raised its 2021 full-year guidance. So expected GAAP revenues are $77.6 billion and non-GAAP revenues are expected to amount to $73.5 billion (which is an increase of $1 billion), resulting in expected GAAP EPS of $4.09 and non-GAAP EPS of $4.80. Planned CAPEX is between $19 billion and $20 billion and free cash flow should be $11 billion, which is an increase of $500 million versus prior expectations. Gelsinger estimates that the semiconductor shortage will start loosening in the second half of the year, but it will take another one to two years until the demand is completely met.

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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