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Ford boosts investment in electric and autonomous vehicles to $29 billion through 2025

Ford CFO John Lawler said the company is forecasting it will earn between $8 billion and $9 billion in adjusted pretax profits this year.

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Visitor walk past a Ford Escape Titanium at the Shanghai Auto Show in Shanghai on April 17, 2019.

Greg Baker| AFP | Getty Images

DETROIT — Ford Motor plans to invest $29 billion in electric and autonomous vehicles through 2025, the company announced Thursday when it reported better-than-expected fourth-quarter earnings.

Wall Street was waiting to see Ford pour more money into the emerging technologies after General Motors announced plans last year to increase spending on all-electric and autonomous vehicles to $27 billion between 2020 and 2025.

Ford said its plans include $7 billion in self-driving vehicles and $22 billion in electrified vehicles, up from $11.5 billion through 2022. But not all the announced cash in EVs is new. The company is including previous investments of roughly $7 billion since 2016, bringing Ford’s new investment commitment to $10.5 billion through 2025.

Ford said a majority of vehicles under the plan will be all-electric, but the company also has hybrid and plug-in hybrid models that continue to have traditional internal combustion engines.

“The transformation of Ford is happening and so is our leadership of the EV revolution and development of autonomous driving,” Ford CEO Jim Farley said in a release.

The company’s earnings were mixed. Here’s how Ford did compared with what Wall Street expected based on average estimates compiled by Refinitiv.

  • Adjusted EPS: 34 cents versus an expected loss of 7 cents
  • Revenue: $33.2 billion versus $33.89 billion expected

Shares of Ford jumped by as much as 4% during after-hours trading Thursday before leveling off to about $11.40, up less than 1%.

2021 outlook

For 2021, CFO John Lawler said the company estimates it will earn between $8 billion and $9 billion in adjusted pretax profits and generate between $3.5 billion and $4.5 billion in adjusted free cash flow. That doesn’t factor in a global shortage in semiconductor chips that he said could lower Ford’s earnings by $1 billion to $2.5 billion this year.

“The semiconductor situation is changing constantly, so it’s premature to try to size what
availability will mean for our full-year performance,” he said in a press release. “Right now, estimates from suppliers could suggest losing 10% to 20% of our planned first-quarter production.”

Ford earlier Thursday said it was significantly cutting production at plants next week in Michigan and Missouri that produce its profitable F-150 pickup trucks due to a global semiconductor chip shortage.

Automakers and parts suppliers began warning of a semiconductor shortage late last year after demand for vehicles rebounded stronger than expected following a two-month shutdown of production plants due to the coronavirus pandemic.

Fourth-quarter earnings

On an unadjusted basis, Ford’s loss widened to $2.79 billion, or a loss of 70 cents a share, during the fourth quarter from a loss of $1.67 billion, or a loss of 42 cents a share, during the same three months of 2019.

Ford excluded more than $5 billion in special charges from its adjusted earnings for the quarter. They included $2.4 billion to end manufacturing in Brazil as part of a restructuring of its South American operations and $610 million to recall 3 million older vehicles due to potential issues with their airbag inflators. Other charges involved pension obligations and other restructuring actions.

Ford’s results in the fourth quarter were led by its operations in North America, which made $1.1 billion on revenue of $22 billion. All other segments aside from Europe, with earnings of $414 million, lost money for the automaker. That included a $105 million loss in South America and $66 million loss in China.

For 2020, Ford lost $1.28 billion as it dealt with its global restructuring and impacts from the coronavirus pandemic. That compares with an $84 million profit in 2019. Its revenue for the last year was $127.1 billion, down 18% from 2019.

Source: https://www.cnbc.com/2021/02/04/ford-f-earnings-q4-2020.html

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Target, CVS, Starbucks and other retailers ease mask mandates for fully vaccinated customers

Target, CVS and Starbucks joined a growing list of retailers and restaurants that will ease mask requirements for fully vaccinated customers.

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Shoppers wear protective masks inside a Target Corp. store in New York, U.S., on Saturday, Aug. 15, 2020. Target is scheduled to release earnings figures on August 19.

Jeenah Moon | Bloomberg | Getty Images

The CDC said Thursday that fully vaccinated people do not need to wear a mask or stay 6 feet apart from others in most cases, whether indoors or outdoors. People are considered fully vaccinated two weeks after they receive the second dose of the PfizerBioNTech or Moderna vaccines or the single dose of Johnson & Johnson.

The sudden change by the federal agency prompted confusion and some criticism. Over the weekend, CDC director Dr. Rochelle Walensky and White House chief medical advisor Dr. Anthony Fauci made rounds on news programs to explain and defend the policy change.

Some feel the new guidance will encourage more people to get inoculated, but others are concerned the policy relies too heavily on people being honest about their vaccination status. The possibility that unvaccinated people may go maskless is a concern for those who are not yet vaccinated or have children under 12 years of age who cannot yet receive the vaccine.

As of Saturday, roughly 47% of the U.S. population have received at least one vaccine dose, according to the CDC. About 37% are fully vaccinated, according to the agency.

All of the retailers said they would follow local mandates, which are also changing. New York state said Monday it will allow people to skip masks if they are fully vaccinated, starting Wednesday. Masks will still be required in some settings, such as public transit and health-care facilities, according to federal guidelines. California health officials said Monday that they’re sticking to the plan to keep the mask mandate until June 15, which was set before the CDC released its updated guidance.

Retailers that changed their mask policies did not announce plans to check customers’ vaccination status. They asked those who are not vaccinated to continue wearing masks in their stores. The companies have taken different approaches with their workforces.

In a statement, CVS said it would still require its employees to wear masks while at work. Chipotle restaurant workers will still be required to wear masks, according to Chief Corporate Affairs Officer Laurie Schalow. Target said in a statement that its employees who are fully vaccinated will not have to wear masks — but said it would keep other safety measures, such as extra cleaning and social distancing in its stores.

Starbucks’ new mask policy does not appear to apply to baristas. Since February, the coffee chain has required its restaurant workers at company operated locations in the U.S. and Canada to wear multi-ply facial coverings, or double mask. Starbucks has required facial coverings inside its cafes for customers since July 15.

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Source: https://www.cnbc.com/2021/05/17/starbucks-updates-mask-policy-for-vaccinated-customers.html

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Airbnb says first-quarter revenue rose 5% as vacationers return to travel

Airbnb’s net loss tripled, but the company expects its adjusted margin to improve in the second half of the year as travel restrictions ease up.

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Airbnb CEO Brian Chesky attends the Cannes Lions on June 20, 2016, in Cannes, France.

Richard Bord | Getty Images

Airbnb said revenue increased 5% in the first quarter, beating analysts’ estimates, as the rapid pace of vaccinations led to more travel. The company’s net loss tripled because of debt repayments and restructuring costs.

Here’s how the company did:

  • Earnings: Loss of $1.95 per share
  • Revenue: $886.9 million, vs. $714.4 million as expected by analysts, according to Refinitiv.

The increase in year-over-year revenue followed a 22% decline in the fourth quarter.

The coronavirus pandemic considerably curtailed rental activity on Airbnb, but the business appears to be recovering as vaccines becomes more widely available and governments lift travel restrictions. The company reported 64.4 million nights and experiences booked, up 39% from the fourth quarter and up 13% year over year. Analysts polled by FactSet had expected 62.5 million nights and experiences booked.

Booking nights dropped in every quarter last year compared with the same period in 2019.

Gross booking value, Airbnb’s way of tracking host earnings, service fees, cleaning fees and taxes, totaled $10.3 billion, up 52% year over year and above the $7.87 billion FactSet consensus.

Airbnb’s net loss tripled as it repaid debt for loans it took out early in the pandemic, and as the company continued to pay restructuring fees following layoffs. It also had a $113 million impairment related to office space in San Francisco.

Its average daily rate rose 25% from the prior quarter to $160, reflecting an increase in the amount customers are spending for homes and experiences. Airbnb pointed to strength in bookings in North America, along with complete homes and locations outside cities, all of which tend to bring higher rates. The company said 24% of nights booked came from stays of at least 28 days, compared with 14% in 2019.

“The two trends I do think are going to invert are we are going to see a recovery of urban travel and a recovery of cross border,” Airbnb CEO Brian Chesky said on a conference call with analysts. “This has been our bread and butter before the pandemic, and I think those are significant tailwinds for us.”

Chesky talked about the potential to offer deals to travelers who can be flexible about when they travel.

“There’s a lot of other opportunities for us, I think, to point demand to where we have available supply, which will allow us to steadily increase occupancy,” he said.

Cancellation rates are now considerably lower than in 2020 but remain higher than they were in 2019, said Dave Stephenson, the company’s finance chief.

The company issued general commentary on the quarters ahead, saying that in the second quarter its adjusted earnings margin before interest, taxes, depreciation and amortization could break even or be slightly positive. That margin was -7% in the first quarter, and it should be higher in the second half of the year than the first half, Airbnb said in a letter to shareholders.

“We expect revenue in Q2 2021 to be significantly higher than that of Q2 2020, given the impact of Covid- 19 on the prior year period, and to be at a similar level to that of Q2 2019,” the company said. “In Q2 2021, we expect the positive momentum of recovery experienced in Q1 2021 to be partially offset by the continued uncertainty of travel restrictions and lockdowns in EMEA.”

The company said it’s too soon to say whether the recovery in the first half of the year will keep the same pace in the second half.

“Although we have seen booking lead times start to lengthen when compared with Q4 2020, we continue to have limited visibility for growth trends in the second half of 2021,” Airbnb said. “With the increased availability of vaccines and the easing of some travel restrictions, there has been greater willingness by guests to search for and book travel later in the year. Offsetting this is the difficulty in predicting factors such as future Covid-19 outbreaks or travel restrictions globally, which impact the actual rate at which guests complete their stays (at which point we recognize revenue).”

Airbnb reported financials for the second time as a public company, having completed its IPO in December. Airbnb shares have fallen about 8% since the start of 2021, while the S&P 500 is up about 10% over the same period.

WATCH: Airbnb CEO on the campaign to attract more hosts as demand surges

  • Earnings: Loss of $1.95 per share
  • Revenue: $886.9 million, vs. $714.4 million as expected by analysts, according to Refinitiv.

Source: https://www.cnbc.com/2021/05/13/airbnb-abnb-earnings-q1-2021.html

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Disney misses on subscriber expectations, parks revenue still hurt by Covid restrictions

Disney+ had been bolstering the company’s success as it was losing out on business from Covid restrictions, but it seems the rapid growth is starting to slow.

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In this handout photo provided by Walt Disney World Resort, guests stop to take a selfie at Magic Kingdom Park at Walt Disney World Resort on July 11, 2020 in Lake Buena Vista, Florida.

Matt Stroshane | Walt Disney World Resort | Getty Images

Disney reported second quarter results Thursday, posting lower-than-expected revenue and subscriber counts for its streaming service.

The company’s stock dipped around 3.5% in after-hours trading.

  • Earnings per share: 79 cents vs 27 cents expected in a Refinitiv survey of analysts
  • Revenue: $15.61 billion vs $15.87 billion expected in the survey

Streaming

The company missed on subscriber estimates for Disney+, coming in at 103.6 million paid subscribers. It was expected to post 109 million, according to FactSet.

The streaming service had been bolstering the company’s success as it was losing out on business from Covid restrictions, but it seems the rapid growth is starting to slow. Still, the company reiterated its plans to see between 230 million to 260 million subscribers to Disney+ by 2024.

“This quarter’s numbers were exactly as we projected internally, so no disappointment here,” CEO Bob Chapek told CNBC’s Julia Boorstin.

Average monthly revenue per user dipped 29% year over year to $3.99, which the company attributed to the launch of Disney+ Hotstar. The service has lower average monthly revenue per paid subscriber than traditional Disney+ in other markets, pulling down the overall average for the quarter.

Disney CFO Christine McCarthy said on the company’s earnings call that excluding Hotstar, average revenue per paid Disney+ subscriber would have been $5.61 in the quarter.

Average monthly revenue per paid subscriber grew slightly for Disney’s other direct-to-consumer platforms, ESPN+ and Hulu.

The company said it now has around 159 million total subscribers across its streaming services as of the end of the second quarter. Revenue for Disney’s direct-to-consumer business grew 59% to $4 billion, which has helped offset losses in other segments affected by the pandemic.

Disney announced it is also extending its MLB contract through 2028 and that it signed an eight-year soccer deal with LaLiga.

Parks

Revenue at Disney’s parks, experiences and products segment fell 44% to $3.2 billion, as many of its theme parks were either closed or operating at reduced capacity and its cruise ships and guided tours were suspended.

The company said the outbreak cost this division around $1.2 billion in lost operating income during the latest quarter.

Disney recorded a one-time $414 million charge during the quarter for impairments and severance for the planned closure of an animation studio and Disney-branded retail stores, and severance paid to workers at its parks and and resorts businesses.

Disney reopened its two California-based parks on April 30, so any revenue garnered over the last few weeks is not reflected in the fiscal second-quarter results. However, the parks’ reopening could boost expectations for the fiscal third quarter.

“We are very encouraged by the initial guest response,” McCarthy said, adding that forward-looking bookings are strong as coronavirus case counts decline and vaccines ramp up.

Additionally, the Centers for Disease Control and Prevention said earlier Thursday fully vaccinated people no longer need to wear a face mask or stay six feet away from others in most settings, whether outdoors or indoors. Chapek pointed toward the new guidance as good news for the company, saying in the earnings call it will be a bigger catalyst for growth and attendance.

“I think in relatively short order you’re going to see our attendance go up significantly,” Chapek later told CNBC.

As of Thursday, Disney’s Paris-based theme park is the only location that has not reopened to the public.

Content sales and licensing revenues fell 36% for the quarter to $1.9 billion. The award-winning “Nomadland” was Disney’s only theatrical release in the U.S. over the quarter (it debuted simultaneously on Hulu). “Raya and the Last Dragon,” Disney’s latest animated feature, also debuted in some theaters internationally. It was made available on Disney+ Premier Access for $30.

Several Marvel titles are on the horizon, such as “Black Widow,” “Eternals,” “Shang-Chi and the Ten Rings,” and “Spider-Man: No Way Home” as well as “Cruella,” “Jungle Cruise,” “Free Guy,” “Encanto” and “West Side Story.”

The company said that “Shang-Chi and the Ten Rings” and “Free Guy” will be released first in theaters, with an exclusive 45-day window. Disney said earlier Thursday its blockbuster film “Jungle Cruise” will debut in theaters and on Disney+ Premier Access on July 30.

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Source: https://www.cnbc.com/2021/05/13/disney-dis-q2-2021-earnings.html

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