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BenzingaEditorial

GM Hits the Gas Pedal On Its EV Transformation

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Electric vehicles and e-mobility are the new (re)start for all the automakers, and whoever goes the extra mile will secure a better future and results. General Motors (NYSE: GM), the automaker with experience of over 100 years, is no different. The company decided to increase the investments in the electric and autonomous segment, so the new plan is to spend $35 billion until 2025. This change goes hand-by-hand with the announcement that GM will extend a $5 billion credit line to purchase hundreds of autonomous and battery-powered shuttles through its subsidiary Cruise. The new figures are a significant increase to both the initial plan (70% increase) and the revised plan announced last November (30% increase). Having in mind that the EV and autonomous segment is just 2% of the new car market, this amount seems even bigger! And that is how you hit a pedal to the metal.

 

How does the market feel about EVs?

It looks the whole market has a similar trend when it comes to investments in EVs. The world’s second-largest automaker Volkswagen (OTC: VWAGY) announced an even higher capital expenditures plan. In the next five years, the German automaker plans to spend $86 billion on electric vehicles. Ford (NYSE: F) wants to electrify 40% of its vehicle offer, and the company is ready to spend $30 billion by 2030. So, GM has some serious competition if it wants to position itself as the largest EV manufacturer in North America.

 

Tesla as the EV market leader

With aggressive plans like these, the traditional automakers are seriously trying to overtake Tesla’s (NASDAQ: TSLA) leading position in the EV market. Tesla used the advantage of the first-mover to transform the EV market, in the similar way that Netflix (NASDAQ: NFLX) and Amazon (NASDAQ: AMZN) changed the entertainment and retail world, respectively. However, the amount of investments that the legacy automakers are pouring into the EV field is giving the consumers more and more options, straightened with their experience in the automotive industry. Tesla will have to fight with all of that.

 

Outlook

GM’s first milestone is 2025, when it plans to launch 30 new electric models. Out of those 30, 20 models will be available in North America, throughout all GM brands like Cadillac, Buick, GMC, and Chevrolet, covering all price ranges. This will be a big change from GM today’s offer in the US which offers only the Chevy Bolt and the Chevy Bolt EUV. Hummer EV models are the first to come later this year, and Cadillac models Lyriq and Celestiq will follow. Of course, the pick-up truck segment will not be left out, Chevy Silverado will get an electric version. In addition, the company plans to build two new factories in the US to produce batteries, in addition to the factories in Tennessee and Ohio, that are already under construction. If all that gets through, maybe GM has the potential to become the largest EV manufacturer in North America. We hope that the current semiconductor shortage will not severely alter the company’s plans.

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

Snap Couldn’t Snap Out of Apple’s Privacy Changes

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On Thursday, Snap Inc (NYSE: SNAP) reported its third quarter earnings which clearly show revenue suffered due to Apple Inc’s (NASDAQ: AAPL) iPhone privacy changes that disrupted the advertising business. Although this was expected, the impact was stronger than anticipated. Stock fell 22% upon the news as the company also warned that global supply chain interruptions and labor shortages are reducing the “short-term appetite to generate additional customer demand through advertising.” Shares of rivals Facebook (NASDAQ: FB) and Twitter were also down approximately 7% in after hours.

Third quarter figures

Adjusted earnings per share amounted to 17 cents, more than double the 8 cents estimated by Refinitiv, but revenue of $1.07 billion fell short of Refinitiv’s forecast of $1.10 billion.

Snap’s community now has 306 million global daily active users (DAUs) as it grew 4% from the figure reported in April and almost 23% from last year’s comparable quarter. It exceeded the StreetAccount estimate of 301.8 million, with average revenue per user (ARPU) being $3.49, slightly below the expected $3.67.

At a somewhat brighter note, net loss narrowed 64% from a loss of $200 million a year ago to $72 million.

Making Snapchat safer

While Facebook and its owned Instagram are under scrutiny on the way they are managing their teenage audience, the company is taking action to ensure a safer experience for its youngest users by working on a set of family safety tools. It is building insights for parents that reportedly won’t compromise privacy or data security. According to the CEO Evan Spiegel, one of the goals of this initiative is to open up a dialogue between parents and their children about their experiences on the app. The main goal is to get into parent’s good graces and protect teens without comprising the privacy of the app’s users.

Fourth quarter guidance

For the undergoing quarter, the company expects to gather DAUs in the range between 316 million and 318 million, which is more optimistic tha the StreetAccount estimate of 311.8 million.

Accounting for headwinds posed by Apple’s privacy changes, supply chain disruptions and labor shortages that are expected to stick around for a while, fourth-quarter revenue is expected to be in the range between $1.16 billion and $1.20 billion, short of the $1.36 billion Refinitiv’s survey of analysts expected. Unfortunately, these changes are taking place when supply chains should be operating at peak capacity and with peak advertising demand driving peak contestation, and therefore peak pricing.

Long-term goal remains intact

In a nutshell, although some degree of business disruption was anticipated due to the Apple’s improved privacy changes that Spiegel himself praised, the impact was greater as it made it more difficult for advertising partners to measure and manage their ad campaigns for iOS. Although the dynamics of these challenges is difficult to predict, the growth of the audience, the community’s adoption of Snap’s new products and the attractiveness to advertisers gives the company confidence to be able to navigate this storm as it continues its path towards its long-term vision.

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

Netflix Is Not Giving Up The Throne

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The streaming giant posted its third quarter results on Thursday, solidly beating earnings and showing it can continue attracting new subscribers. Besides a crowded streaming front, including no other than the entertainment giant The Walt Disney Company (NASDAQ: DIS) itself, Netflix (NASDAQ: NFLX) also needs to compete for users’ attention with TikTok videos, videogames such as Epic Games-owned Fortnite as well as with old-fashioned books.

Quarter figures

The quarter’s subscriber growth of 4.4 million did a great job in topping the 3.84 million Wall Street expected and even its own estimate of 3.5 million as the company rolled out a bunch of content that was delayed due to the pandemic. The streaming pioneer now has a customer base of 222 million customers, out of which 67 million are in the United States.

For the quarter that ended on September 30th, Netflix generated $7.5 billion in revenue and ended with $1.4 billion in profit, slightly exceeding expectations.

Q4 guidance- an uncharted territory

Netflix anticipates to add 8.5 million new customers in the undergoing quarter which is one of the biggest quarterly forecasts in its history. The co-CEO Reed Hasting elaborated that the amount of content for the fourth quarter is something it never had before so the only way through is by feeling with hopes to roll into a great next year as well. As for profitability, the guidance is $365 million on a revenue of $7.7 billion.

A new metric on the horizon

Unlike traditional television, where economics are governed by ratings and cable licensing fees, Netflix doesn’t make more money when viewers watch more hours but when more people sign up. For this reason, it announced it will use new metrics for reporting viewership to match how outside services measure TV viewing and gives proper credit to rewatching. It will report hours viewed rather than the number of accounts that watched. For example, the current measure ranks “Extraction,” on top of the list with 99 million accounts having watched at least two minutes of the title in its first 28 days whereas the new measure would put “Bird Box” with 282 million total hours viewed within the same time frame. In addition, Netflix will also release title metrics more regularly in addition to quarterly earnings reports.

The Squid Game is a game changer

The South Korean series was its biggest series launch ever, topping 111 million viewers globally and beating out “Bridgerton.” Squid Game” will reportedly generate almost $900 million in impact value for the company. This success story shines a light on how much more affordable it is to make TV shows outside the United States with Disney having recently announced that 27 projects will be made in the Asia Pacific region.

Gaming update

Netflix revealed its experiments with gaming are underway as it is testing its games in select countries. Games will be offered under Netflix subscriptions and will not include advertisements or in-app purchases.

The offense

Netflix is also facing a rare public relations nightmare with Dave Chappelle’s comedy special that critics saw it as a hostile invective toward the transgender community rather than the boundary-pushing stand-up routine that Ted Sarandos, the company’s co-chief executive, initially defended. However, he admitted to “screwing up” in his efforts to communicate with employees who were upset over “The Closer,” in which Mr Chappelle made remarks that some viewed as offensive to the transgender community. With the protest held on Wednesday to support the streamer’s trans employees, who began a virtual walkout, it seems Netflix has still to figure out how to navigate such challenges.

What is clear is that Netflix is determined to defend its streaming throne by looking for new ways to keep customers glued to its service such as the upcoming gaming experiment.

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

Chipotle Smashes Estimates Once Again

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On Thursday, Chipotle Mexican Grill Inc (NYSE: CMG) issued its third quarter results, smashing Wall Street’s estimates for both earnings and revenue. Menu price increases helped the burrito chain weather through the storm caused by higher costs on beef and freight, with shares rising 33% this year, resulting in a market value of $51.79 billion.

Third quarter figures

Revenue rose 21.9% to $1.95 billion slightly exceeded the expected $1.94 billion. Same-store sales rose 15.1%, also exceeding 14% that StreetAccount expected. Digital sales that more than tripled a year ago increased by 8.6%. During the quarter, the company opened 41 new restaurants.

Net income for the quarter that ended on September 30th amounted to $204.4 million, or $7.18 per share. As a comparison, during the same quarter last year, it made $80.2 million, or $2.82 per share a year earlier. The food chain successfully weathered cost increases of freight and beef by increasing its own menu prices. It announced the 4% increase back in June as to cover the cost of increasing restaurant workers’ wages to an average of $15 an hour.

Putting a tax benefit, restructuring costs and other items aside, earnings per share become $7.02, also topping $6.32 per share that Refinitiv survey of analysts expected.

The strategy is paying off

In two and a half years, the company’s loyalty program gathered 24.5 million members and according the the CEO Brian Niccol, there’s still a lot of room to grow. Although the company is still facing challenges such the labor crunch that’s hitting the broader industry, its strategies show it is handling it better than its industry peers. There is also the impact of inflation on construction materials, shortages on subcontractor labor and equipment and landlord delivery delays.  Under Niccol, who previously led Yum! Brands Inc (NYSE: YUM)-owned Taco Bell , the company has accelerated adding new menu items through a process it calls stage-gate testing with the aim to drive customer traffic to restuarants and keep the menu from getting bloated.

Fourth quarter guidance

The company is projecting same-store sales growth in the low-to-mid double-digits range. Several uncertainties have been noted as possibly weighing on the business for the foreseeable future, including inflation, staffing pressures and Covid-19. But the CFO Jack Hartung remains confident in the company’s ability to drive restaurant margins higher as average unit volumes increase.

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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