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BenzingaEditorial

Uber and Lyft Are Still Facing an Uncertain Future

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Uber Technologies (NYSE: UBER) and Lyft (NASDAQ: LYFT) might be improving at getting less unprofitable, but COVID-19 is still hitting their business hard. Last week, Uber revealed it lost $6.7 billion last year, while Lyft lost $1.8 billion. The two companies have been used as ‘proxies as analysts believe their figures offer early indicators of an economic rebound and the COVID-19 pandemic is still casting a shadow over both.

2020 was a brutal year

During its latest quarter, Uber lost $968 million as its adjusted net revenues went down 16 percent compared to the same quarter last year. 2020’s net loss amounted to $6.7 billion which is a slight improvement from 2019’s $8.5 billion. But revenue of $11.1 billion for the year was significantly less than $13 billion in 2019 as only 5 billion trips were made in 2020 versus 7 billion in 2019.

Lyft lost $458.2 million over the last quarter, with its adjusted net revenues plummeting 44 percent YoY. For the whole year, it lost $1.8 billion, which is also a slight improvement compared to $2.6 billion lost in 2019. It’s important to note that both ride-hailing companies factor in stock-based compensation and payroll tax expenses into their net losses.

Different strategies

In the eyes of Wall Street, these two seem to be joined at the hip as they are the two undisputed leaders in the U.S. car-hailing market. They also went public just five weeks apart in back 2019. But when we pop open the hoods, we get to find two entirely different engines at play as despite offering nearly identical services, Uber and Lyft have very different strategies for stabilizing their businesses.

Uber

Uber focuses on growing in areas it does well in, such as food and grocery delivery, while abandoning line items that aren’t generating any revenue and threaten to drain its finances in the future. Through this strategy, it acquired two delivery startups, Cornershop and Postmates, and sold off its micromobility, autonomous vehicle, and aerial taxi divisions. Uber is predicting that its delivery business will be profitable in 2021 and it has already emerged as the country’s second largest player in restaurant delivery. But even the delivery business is no slam dunk for Uber as third-party delivery apps have come under fire recently for imposing dreadful fees on the already-struggling restaurant industry that is fighting for survival. Competition is also intense as DoorDash Inc (NYSE: DASH) and GrubHub (NYSE: GRUB) are spending billions of dollars to grow their customer bases so this segment could easily end up being just as risky as ride-hailing.

Lyft

Lyft has no delivery business to think of, so it is focusing all its attention on reducing costs and even supply, if necessary, to meet that goal. It was able to reduce the number of drivers joining the app along with its marketing and incentive spending, which had a positive impact on its financial results.

Surviving the pandemic

Uber has the resources to grow, or better said shrink, its way out of the pandemic, while it is much more challenging for Lyft that needs to focus on staying small, but not too small that it risks being eaten by the big fish. The worst part is that business travel is unlikely to fully bounce back for “a couple years” and therefore, cannot go back to being a reliable income stream for both companies in the near future. But, despite a brutal year, the market has been kind to both as Lyft’s shares moved 14 percent higher in 2020 whereas Uber’s shares shrank slightly after its earnings report, but it still trades at a much higher revenue multiple than Lyft.

Outlook

Uber and Lyft drivers are still facing legal challenges against Prop 22, the ballot measure that allows the companies to continue treating their workers like independent contractors. Regulatory hurdles can make or break both ride-hailing companies so profitability may be the least of their concerns. The biggest threat right now continues to be the unknown that may still exist within the whole pandemic arena. Improving profitability won’t matter much if they don’t have a valid reason to exist in a new normal that is being shaped as we speak.

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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