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Can Facebook Maintain Its Gorilla Status on the Social Media Playground?

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Facebook (NASDAQ: FB) exceeded earnings and revenue estimates last week but it also warned of damaging impact that Apple’s (NASDAQ: AAPL) upcoming privacy changes will have on its advertising business or more specifically, its ability to target ads. In 2020, Facebook benefited from the shift toward online commerce during the pandemic but it is questionable what will happen once the vaccines kick in. Moreover, disruptive social networking challengers, like Pinterest (NYSE:PINS) and Snap (NYSE: SNAP) who will both report their earnings this week, are growing right in front of Facebook’s nose.

Q4 figures

Earnings amounted to $3.88 per share, exceeding Refinitiv forecast of $3.22 per share, on a revenue of $28.07 billion, also exceeding the estimate of $26.44 billion. 1.84 billion of daily active users and 2.8 billion of monthly active users at the end of 2020, up 12% from 2019,brought in an average revenue per user of $10.14.

New trends

In the U.S. and Canada, Facebook’s user base fell to 195 million daily active users, 1 million down compared to the same quarter a year earlier. But more importantly, this is the second quarter in a row that the company lost users on its key fronts. However, its Europe user base increased to 308 million daily active users, after being at 305 million for three consecutive quarters. To address the drop, Facebook is finally taking action to reduce the amount of political content to protect its users, while permanently stop recommending civic and political groups to users around the world.

Fiscal and calendar 2020

Facebook’s revenue and earnings rose 22% and 57%. Growth in ad revenue, which accounted for 98% of its top line, accelerated in the fourth quarter as some of the pandemic-related headwinds weakened. However, Facebook provided ominous warnings instead of clear guidance throughout its conference call due to upcoming changes in its environment.

The threat from Apple

Apple and Facebook generally aren’t considered competitors, since the former mainly sells hardware, software, and services and the latter generates nearly all its revenue from ads. But their relationship is getting increasingly hostile. Apple is gearing up for a software change that will ask iPhone and iPad users if they want to share their information for ad-tracking purposes and the online advertising industry is expecting a hit as some users will choose not to share that information. Facebook argues that it is threatening the personalized ads that millions of small businesses rely on to find and reach customers. The social media giant increasingly views the iPhone maker as one of its biggest competitors as CEO Mark Zuckerberg claimed that Apple was attacking its apps to turn iMessage into one of Facebook’s “biggest competitors”.

Perhaps the biggest difference is that Apple’s stock surged nearly 80% over the past 12 months with the iPhone 12being its first 5G device. Meanwhile Facebook’s stock rose just 25% as slower ad sales during the pandemic, antitrust challenges, and ethical concerns.

Competitors

Snap is now worth over $73 billion, despite Facebook’s ongoing attempts to clone Snapchat’s features in Instagram and Messenger. Snap survived Facebook’s assault because it established a first-mover’s advantage with younger millennials and Gen Z users with its ephemeral messages, filters, and stories.

Pinterest’s focus on sharing interests, hobbies, and shopping ideas instead of personal posts and news protected it from controversies that surround Facebook and Twitter (NYSE: TWTR). The virtual pin-board platform saw its its monthly active user base growing 37% YoY to 442 million as its average revenue per user grew 15% over the last reported quarter.  Like Snapchat, Pinterest established a first-mover’s advantage in its own high-growth niche made of mostly older affluent women. Back in 2019, a Cowen & Co. survey found that 48% of Pinterest’s users used its platform to find and shop for products, compared 10% of Instagram’s users. Facebook tried to make a Pinterest clone with Hobbi in February last year, but it quietly killed the app less than five months later. Facebook’s social shopping ambitions took a hit after Hobby failed to gain traction.

There’s also ByteDance’s TikTok that gained an estimated 850 million MAUs in just over four years. TikTok differentiated itself from other platforms with its streamlined system of endlessly scrolling bite-sized videos, and its editing tools made it easier for new users to create new content. Along with constant support from powerful influencers, it became a favorite platform for millennials and Gen Z users. Just like Snapchat, TikTok was considered a safe haven for parents. Although TikTok’s future in the U.S. seemed dim after the Trump Administration threatened toban the app over its ties to China in September, two court orders postponed the ban

Facebook is clearly worried about it and so much that it launched a clone called Lasso in late 2018 that only made it till July 2020. It subsequently integrated a TikTok-like feature called Reels into Instagram, but it’s doubtful Reels willsucceed in its mission to steal users from TikTok. Its job will be far easier if the Biden administration continues what Donald Trump started.

Outlook

The Capitol riot highlighted Facebook’s inability to control its users while revealing the instability of of its core business. Although Facebook did not succeed in beating Snapchat, Pinterest, and TikTok, its core platforms have more room to grow in the foreseeable future. However, if history has taught us anything, it is that past performance never guarantees future gains.  Facebook’s failures indicate it will still struggle to unseat first movers in niche markets, capture Gen Z users and shake off concerns regarding its privacy and ability to ban hate speech. By not doing this sooner, it actually fueled Snapchat, Pinterest, and TikTok to keep growing.

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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