iQIYI Announces Third Quarter 2024 Financial Results
BEIJING, Nov. 21, 2024 (GLOBE NEWSWIRE) — iQIYI, Inc. IQ (“iQIYI” or the “Company”), a leading provider of online entertainment video services in China, today announced its unaudited financial results for the third quarter ended September 30, 2024.
Third Quarter 2024 Highlights
- Total revenues were RMB7.2 billion (US$1.0 billion1), decreasing 10% year over year.
- Operating income was RMB238.9 million (US$34.0 million) and operating income margin was 3%, compared to operating income of RMB746.7 million and operating income margin of 9% in the same period in 2023.
- Non-GAAP operating income2 was RMB368.6 million (US$52.5 million) and non-GAAP operating income margin was 5%, compared to non-GAAP operating income of RMB894.9 million and non-GAAP operating income margin of 11% in the same period in 2023.
- Net income attributable to iQIYI was RMB229.4 million (US$32.7 million), compared to net income attributable to iQIYI of RMB475.9 million in the same period in 2023.
- Non-GAAP net income attributable to iQIYI2 was RMB479.8 million (US$68.4 million), compared to non-GAAP net income attributable to iQIYI of RMB622.1 million in the same period in 2023.
“In the third quarter of 2024, we topped the industry in the drama series market share, according to Enlightent data,” commented Mr. Yu Gong, Founder, Director, and Chief Executive Officer of iQIYI. “We have recently elevated our entertainment offerings and services with strategic enhancements, integrating sought-after mini and short dramas to complement our extensive long-form content portfolio. We have also introduced a family account option within our membership programs. We believe these improvements will better serve users’ evolving entertainment needs.”
“Our goal is to enhance content appeal by optimizing long-form video offerings and incorporating mini and short dramas into our content portfolio. With disciplined execution, we believe that such initiatives will lead to long-term value creation for our businesses,” commented Mr. Jun Wang, Chief Financial Officer of iQIYI.
| Third Quarter 2024 Financial Highlights | ||||||
| Three Months Ended | ||||||
| (Amounts in thousands of Renminbi (“RMB”), except for per ADS data, unaudited) | September 30, | June 30, | September 30, | |||
| 2023 | 2024 | 2024 | ||||
| RMB | RMB | RMB | ||||
| Total revenues | 8,015,079 | 7,438,785 | 7,245,681 | |||
| Operating income | 746,747 | 342,093 | 238,921 | |||
| Operating income (non-GAAP) | 894,879 | 501,417 | 368,644 | |||
| Net income attributable to iQIYI, Inc. | 475,920 | 68,685 | 229,412 | |||
| Net income attributable to iQIYI, Inc. (non-GAAP) | 622,071 | 246,914 | 479,787 | |||
| Diluted net income per ADS | 0.49 | 0.07 | 0.24 | |||
| Diluted net income per ADS (non-GAAP)2 | 0.64 | 0.25 | 0.50 | |||
Footnotes:
[1] Unless otherwise noted, RMB to USD was converted at an exchange rate of RMB7.0176 as of September 30, 2024, as set forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System. Translations are provided solely for the convenience of the reader.
[2] Non-GAAP measures are defined in the Non-GAAP Financial Measures section (see also “Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures” for more details).
Third Quarter 2024 Financial Results
Total revenues reached RMB7.2 billion (US$1.0 billion), decreasing 10% year over year.
Membership services revenue was RMB4.4 billion (US$622.1 million), decreasing 13% year over year, primarily due to a lighter content slate.
Online advertising services revenue was RMB1.3 billion (US$190.5 million), decreasing 20% year over year, primarily due to the decrease in brand advertising business, partially offset by the growth of performance-based advertising business.
Content distribution revenue was RMB814.0 million (US$116.0 million), increasing 52% year over year, primarily driven by the increase in the barter transactions.
Other revenues were RMB728.8 million (US$103.8 million), decreasing 8% year over year.
Cost of revenues was RMB5.6 billion (US$805.1 million), decreasing 3% year over year. Content costs as a component of cost of revenues were RMB4.0 billion (US$569.0 million), decreasing 5% year over year. The decrease in content cost was primarily due to lighter movie offerings in the quarter.
Selling, general and administrative expenses were RMB907.9 million (US$129.4 million), decreasing 7% year over year. The decrease was primarily due to the decrease in the marketing spending.
Research and development expenses were RMB449.0 million (US$64.0 million), flat year over year.
Operating income was RMB238.9 million (US$34.0 million), decreasing 68% year over year. Operating income margin was 3%, compared to operating income margin of 9% in the same period in 2023. Non-GAAP operating income was RMB368.6 million (US$52.5 million), decreasing 59% year over year. Non-GAAP operating income margin was 5%, compared to non-GAAP operating income margin of 11% in the same period in 2023.
Total other income was RMB8.4 million (US$1.2 million), compared to total other expense of RMB254.2 million in the same period in 2023. The year over year variance was primarily driven by gain from foreign exchange, partially offset by the increase in impairment provision.
Income before income taxes was RMB247.3 million (US$35.2 million), compared to income before income taxes of RMB492.5 million in the same period in 2023.
Income tax expense was RMB11.5 million (US$1.6 million), compared to income tax expense of RMB9.0 million in the same period in 2023.
Net income attributable to iQIYI was RMB229.4 million (US$32.7 million), decreasing 52% year over year. Diluted net income attributable to iQIYI per ADS was RMB0.24 (US$0.03) for the third quarter of 2024, compared to diluted net income attributable to iQIYI per ADS of RMB0.49 in the same period of 2023. Non-GAAP net income attributable to iQIYI was RMB479.8 million (US$68.4 million), decreasing 23% year over year. Non-GAAP diluted net income attributable to iQIYI per ADS was RMB0.50 (US$0.07), compared to non-GAAP diluted net income attributable to iQIYI per ADS of RMB0.64 in the same period of 2023.
Operating cash flow was RMB242.5 million (US$34.6 million), compared to operating cash flow of RMB830.7 million in the same period of 2023. Free cash flow was RMB234.8 million (US$33.5 million), compared to free cash flow of RMB826.5 million in the same period of 2023.
As of September 30, 2024, the Company had cash, cash equivalents, short-term investments and long-term restricted cash included in prepayments and other assets of RMB4.7 billion (US$673.8 million). In August 2024, PAG drew down US$200.0 million under the loan facility, bringing the total draw down under the facility agreements to US$400.0 million as of September 30, 2024. As such, PAG’s repurchase right for the US$522.5 million principal of the convertible senior notes due January 2028 has been waived.
Conference Call Information
iQIYI’s management will hold an earnings conference call at 6:30 AM on November 21, 2024, U.S. Eastern Time (7:30 PM on November 21, 2024, Beijing Time).
Please register in advance of the conference using the link provided below. Upon registering, you will be provided with participant dial-in numbers, passcode and unique access PIN by a calendar invite.
Participant Online Registration: https://s1.c-conf.com/diamondpass/10042987-f1zkbm.html
It will automatically direct you to the registration page of “iQIYI Third Quarter 2024 Earnings Conference Call”, where you may fill in your details for RSVP.
In the 10 minutes prior to the call start time, you may use the conference access information (including dial-in number(s), passcode and unique access PIN) provided in the calendar invite that you have received following your pre-registration.
A telephone replay of the call will be available after the conclusion of the conference call through November 28, 2024.
| Dial-in numbers for the replay are as follows: | ||
| International Dial-in | +1 855 883 1031 | |
| Passcode: | 10042987 | |
A live and archived webcast of the conference call will be available at http://ir.iqiyi.com/.
About iQIYI, Inc.
iQIYI, Inc. is a leading provider of online entertainment video services in China. It combines creative talent with technology to foster an environment for continuous innovation and the production of blockbuster content. It produces, aggregates and distributes a wide variety of professionally produced content, as well as a broad spectrum of other video content in a variety of formats. iQIYI distinguishes itself in the online entertainment industry by its leading technology platform powered by advanced AI, big data analytics and other core proprietary technologies. Over time, iQIYI has built a massive user base and developed a diversified monetization model including membership services, online advertising services, content distribution, online games, IP licensing, talent agency, online literature, etc.
Safe Harbor Statement
This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident” and similar statements. Among other things, the quotations from management in this announcement, as well as iQIYI’s strategic and operational plans, contain forward-looking statements. iQIYI may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about iQIYI’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: iQIYI’s strategies; iQIYI’s future business development, financial condition and results of operations; iQIYI’s ability to retain and increase the number of users, members and advertising customers, and expand its service offerings; competition in the online entertainment industry; changes in iQIYI’s revenues, costs or expenditures; Chinese governmental policies and regulations relating to the online entertainment industry, general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release, and iQIYI undertakes no duty to update such information, except as required under applicable law.
Non-GAAP Financial Measures
To supplement iQIYI’s consolidated financial results presented in accordance with GAAP, iQIYI uses the following non-GAAP financial measures: non-GAAP operating income, non-GAAP operating income margin, non-GAAP net income attributable to iQIYI, non-GAAP diluted net income attributable to iQIYI per ADS and free cash flow. The presentation of the non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP.
iQIYI believes that these non-GAAP financial measures provide meaningful supplemental information regarding its operating performance by excluding certain items that may not be indicative of its business operating results, such as operating performance excluding non-cash charges or non-operating in nature. The Company believes that both management and investors benefit from referring to the non-GAAP financial measures in assessing its performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to iQIYI’s historical operating performance. The Company believes the non-GAAP financial measures are useful to investors in allowing for greater transparency with respect to supplemental information used by management in its financial and operational decision making. A limitation of using these non-GAAP financial measures is that the non-GAAP measures exclude certain items that have been and will continue to be for the foreseeable future a significant component in the Company’s results of operations. These non-GAAP financial measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data.
Non-GAAP operating income represents operating income excluding share-based compensation expenses, amortization of intangible assets resulting from business combinations.
Non-GAAP net income attributable to iQIYI, Inc. represents net income attributable to iQIYI, Inc. excluding share-based compensation expenses, amortization of intangible assets resulting from business combinations, disposal gain or loss, impairment of long-term investments, fair value change of long-term investments, adjusted for related income tax effects. iQIYI’s share of equity method investments for these non-GAAP reconciling items, primarily amortization and impairment of intangible assets not on the investees’ books, accretion of their redeemable non-controlling interests, and the gain or loss associated with the issuance of shares by the investees at a price higher or lower than the carrying value per share, adjusted for related income tax effects, are also excluded.
Non-GAAP diluted net income per ADS represents diluted net income per ADS calculated by dividing non-GAAP net income attributable to iQIYI, Inc, by the weighted average number of ordinary shares expressed in ADS.
Free cash flow represents net cash provided by operating activities less capital expenditures.
For more information, please contact:
Investor Relations
iQIYI, Inc.
ir@qiyi.com
| iQIYI, INC. | |||||||||
| Condensed Consolidated Statements of Income | |||||||||
| (In RMB thousands, except for number of shares and per share data) | |||||||||
| Three Months Ended | |||||||||
| September 30, | June 30, | September 30, | |||||||
| 2023 | 2024 | 2024 | |||||||
| RMB | RMB | RMB | |||||||
| (Unaudited) | (Unaudited) | (Unaudited) | |||||||
| Revenues: | |||||||||
| Membership services | 5,011,617 | 4,495,310 | 4,365,955 | ||||||
| Online advertising services | 1,674,260 | 1,461,367 | 1,336,932 | ||||||
| Content distribution | 537,058 | 698,175 | 814,028 | ||||||
| Others | 792,144 | 783,933 | 728,766 | ||||||
| Total revenues | 8,015,079 | 7,438,785 | 7,245,681 | ||||||
| Operating costs and expenses: | |||||||||
| Cost of revenues | (5,839,540) | (5,678,342) | (5,649,836) | ||||||
| Selling, general and administrative | (981,409) | (969,673) | (907,885) | ||||||
| Research and development | (447,383) | (448,677) | (449,039) | ||||||
| Total operating costs and expenses | (7,268,332) | (7,096,692) | (7,006,760) | ||||||
| Operating income | 746,747 | 342,093 | 238,921 | ||||||
| Other income/(expense): | |||||||||
| Interest income | 45,219 | 68,688 | 69,044 | ||||||
| Interest expenses | (281,528) | (288,162) | (256,440) | ||||||
| Foreign exchange (loss)/gain, net | (38,084) | (51,338) | 296,030 | ||||||
| Gain/(loss) from equity method investments | 1,355 | (2,100) | 4,627 | ||||||
| Others, net | 18,802 | 32,476 | (104,867) | ||||||
| Total other (expense)/income, net | (254,236) | (240,436) | 8,394 | ||||||
| Income before income taxes | 492,511 | 101,657 | 247,315 | ||||||
| Income tax expense | (9,012) | (25,741) | (11,483) | ||||||
| Net income | 483,499 | 75,916 | 235,832 | ||||||
| Less: Net income attributable to noncontrolling interests | 7,579 | 7,231 | 6,420 | ||||||
| Net income attributable to iQIYI, Inc. | 475,920 | 68,685 | 229,412 | ||||||
| Net income attributable to ordinary shareholders | 475,920 | 68,685 | 229,412 | ||||||
| Net income per share for Class A and Class B ordinary shares: | |||||||||
| Basic | 0.07 | 0.01 | 0.03 | ||||||
| Diluted | 0.07 | 0.01 | 0.03 | ||||||
| Net income per ADS (1 ADS equals 7 Class A ordinary shares): | |||||||||
| Basic | 0.50 | 0.07 | 0.24 | ||||||
| Diluted | 0.49 | 0.07 | 0.24 | ||||||
| Weighted average number of Class A and Class B ordinary shares used in net income per share computation: | |||||||||
| Basic | 6,712,002,812 | 6,725,978,497 | 6,737,281,504 | ||||||
| Diluted | 6,850,839,094 | 6,857,915,450 | 6,779,359,665 | ||||||
| iQIYI, INC. | ||||||
| Condensed Consolidated Balance Sheets | ||||||
| (In RMB thousands, except for number of shares and per share data) | ||||||
| December 31, | September 30, | |||||
| 2023 | 2024 | |||||
| RMB | RMB | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | 4,434,525 | 3,241,336 | ||||
| Restricted cash | 6,120 | – | ||||
| Short-term investments | 941,738 | 936,267 | ||||
| Accounts receivable, net | 2,169,042 | 2,215,920 | ||||
| Prepayments and other assets | 2,794,259 | 2,302,748 | ||||
| Amounts due from related parties | 1,707,024 | 345,392 | ||||
| Licensed copyrights, net | 582,521 | 522,495 | ||||
| Total current assets | 12,635,229 | 9,564,158 | ||||
| Non-current assets: | ||||||
| Fixed assets, net | 863,813 | 839,945 | ||||
| Long-term investments | 2,260,785 | 2,054,565 | ||||
| Licensed copyrights, net | 6,966,508 | 6,862,492 | ||||
| Intangible assets, net | 309,534 | 310,006 | ||||
| Produced content, net | 13,376,985 | 14,321,624 | ||||
| Prepayments and other assets | 3,518,210 | 3,508,104 | ||||
| Operating lease assets | 683,897 | 621,083 | ||||
| Goodwill | 3,820,823 | 3,820,823 | ||||
| Amounts due from related parties | 158,590 | 2,927,240 | ||||
| Total non-current assets | 31,959,145 | 35,265,882 | ||||
| Total assets | 44,594,374 | 44,830,040 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts and notes payable | 5,671,074 | 6,486,111 | ||||
| Amounts due to related parties | 2,953,658 | 3,267,320 | ||||
| Customer advances and deferred revenue | 4,373,208 | 4,320,866 | ||||
| Convertible senior notes, current portion | 2,802,442 | 16,668 | ||||
| Short-term loans | 3,571,637 | 4,347,147 | ||||
| Long-term loans, current portion | 2,000 | 36,800 | ||||
| Operating lease liabilities, current portion | 100,883 | 93,432 | ||||
| Accrued expenses and other liabilities | 2,866,632 | 2,883,646 | ||||
| Total current liabilities | 22,341,534 | 21,451,990 | ||||
| Non-current liabilities: | ||||||
| Long-term loans | 97,990 | 496,951 | ||||
| Convertible senior notes | 8,143,994 | 8,187,011 | ||||
| Deferred tax liabilities | 824 | 34 | ||||
| Amounts due to related parties | 80,566 | 64,211 | ||||
| Operating lease liabilities | 523,747 | 464,837 | ||||
| Other non-current liabilities | 1,220,804 | 886,346 | ||||
| Total non-current liabilities | 10,067,925 | 10,099,390 | ||||
| Total liabilities | 32,409,459 | 31,551,380 | ||||
| Shareholders’ equity: | ||||||
| Class A ordinary shares | 237 | 238 | ||||
| Class B ordinary shares | 193 | 193 | ||||
| Additional paid-in capital | 54,971,469 | 55,439,943 | ||||
| Accumulated deficit | (44,573,428) | (43,620,014) | ||||
| Accumulated other comprehensive income | 1,688,047 | 1,388,992 | ||||
| Non-controlling interests | 98,397 | 69,308 | ||||
| Total shareholders’ equity | 12,184,915 | 13,278,660 | ||||
| Total liabilities and shareholders’ equity | 44,594,374 | 44,830,040 | ||||
| iQIYI, INC. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (In RMB thousands, except for number of shares and per share data) | ||||||||
| Three Months Ended | ||||||||
| September 30, | June 30, | September 30, | ||||||
| 2023 | 2024 | 2024 | ||||||
| RMB | RMB | RMB | ||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||
| Net cash provided by operating activities | 830,689 | 410,752 | 242,517 | |||||
| Net cash (used for)/provided by investing activities(1,2) | (55,245) | 336,256 | (1,662,662) | |||||
| Net cash provided by/(used for) financing activities | 269,189 | 865,894 | (2,611,570) | |||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4,587 | 23,113 | (83,808) | |||||
| Net increase/(decrease) in cash, cash equivalents and restricted cash | 1,049,220 | 1,636,015 | (4,115,523) | |||||
| Cash, cash equivalents and restricted cash at the beginning of the period | 5,082,365 | 6,271,368 | 7,907,383 | |||||
| Cash, cash equivalents and restricted cash at the end of the period | 6,131,585 | 7,907,383 | 3,791,860 | |||||
| Reconciliation of cash and cash equivalents and restricted cash: | ||||||||
| Cash and cash equivalents | 4,230,587 | 6,301,808 | 3,241,336 | |||||
| Restricted cash | 6,120 | – | – | |||||
| Long-term restricted cash | 1,894,878 | 1,605,575 | 550,524 | |||||
| Total cash and cash equivalents and restricted cash shown in the statements of cash flows | 6,131,585 | 7,907,383 | 3,791,860 | |||||
| Net cash provided by operating activities | 830,689 | 410,752 | 242,517 | |||||
| Less: Capital expenditures(2) | (4,192) | (28,299) | (7,700) | |||||
| Free cash flow | 826,497 | 382,453 | 234,817 | |||||
(1) Net cash provided by or used for investing activities primarily consists of net cash flows from loans provided to related party, investing in debt securities, purchase of long-term investments and capital expenditures.
(2) Capital expenditures are incurred primarily in connection with construction in process, computers and servers.
| iQIYI, INC. | ||||||||
| Reconciliations of Non-GAAP Financial Measures to the Nearest Comparable GAAP Measures | ||||||||
| (Amounts in thousands of Renminbi (“RMB”), except for per ADS information, unaudited) | ||||||||
| Three Months Ended | ||||||||
| September 30, | June 30, | September 30, | ||||||
| 2023 | 2024 | 2024 | ||||||
| RMB | RMB | RMB | ||||||
| Operating income | 746,747 | 342,093 | 238,921 | |||||
| Add: Share-based compensation expenses | 145,730 | 157,791 | 128,190 | |||||
| Add: Amortization of intangible assets(1) | 2,402 | 1,533 | 1,533 | |||||
| Operating income (non-GAAP) | 894,879 | 501,417 | 368,644 | |||||
| Net income attributable to iQIYI, Inc. | 475,920 | 68,685 | 229,412 | |||||
| Add: Share-based compensation expenses | 145,730 | 157,791 | 128,190 | |||||
| Add: Amortization of intangible assets(1) | 2,402 | 1,533 | 1,533 | |||||
| Add: Disposal loss | – | – | 22,265 | |||||
| Add: Impairment of long-term investments | – | 16,591 | 91,243 | |||||
| Add: Fair value (gain)/loss of long-term investments | (1,756) | 2,577 | 7,407 | |||||
| Add: Tax effects on non-GAAP adjustments(2) | (225) | (263) | (263) | |||||
| Net income attributable to iQIYI, Inc. (non-GAAP) | 622,071 | 246,914 | 479,787 | |||||
| Diluted net income per ADS | 0.49 | 0.07 | 0.24 | |||||
| Add: Non-GAAP adjustments to earnings per ADS | 0.15 | 0.18 | 0.26 | |||||
| Diluted net income per ADS (non-GAAP) | 0.64 | 0.25 | 0.50 | |||||
(1) This represents amortization of intangible assets resulting from business combinations.
(2) This represents tax impact of all relevant non-GAAP adjustments.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ray Dalio Says Pro-Trump Tech Companies Stand To Gain As Focus Shifts To Deregulation: Here's How Investors Should Brace For Impact
Renowned investor Ray Dalio has provided a detailed analysis of the potential economic and geopolitical landscape under President-elect Donald Trump, offering investors critical insights into emerging market dynamics.
What Happened: In a detailed LinkedIn post, Dalio, founder of Bridgewater Associates, outlined a scenario of potential radical government restructuring and international relations realignment, focusing on efficiency, deregulation, and an aggressive “America First” foreign policy.
Dalio emphasized the critical role of strategic technologies, particularly highlighting Taiwan Semiconductor Manufacturing Co. TSM.
“We should recognize that in advanced semiconductors, the best companies in the United States are not good enough to give the United States what is needed,” he wrote, pointing to the importance of key relationships with aligned foreign producers like TSMC.
Dalio presented a bold vision of potential economic restructuring, describing Trump’s approach as akin to “a corporate raider engaging in a hostile takeover of an inefficient company.”
The “policies will be great for pro-Trump tech companies because they will be allowed to grow and operate in largely unrestrained ways,” Dalio noted, highlighting the potential for massive deregulation.
The investor warned of significant shifts in government approach: “We should expect more government influence on private markets to achieve the government’s objectives,” emphasizing a potential departure from traditional free-market principles.
Dalio specifically addressed technological independence, predicting that “20% of the most advanced chips will have to be produced in the U.S. by 2030” – a clear indication of the potential government’s focus on domestic technological capabilities.
Bridgewater Associates’ third-quarter strategic repositioning includes:
- Reduced Microsoft Corp. MSFT stake by 20%
- Increased holdings in:
- iShares Core S&P 500 ETF IVV
- Constellation Energy Corp. CEG
- Broadcom Inc. AVGO
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Ford to Cut Bronco Production
In January, Ford announced that it would be cutting back on production of its EV pickup, the F-150 Lightning. But the automaker had a plan to make up some ground: a large group of workers from the Lightning plant would move to plants producing the Ranger and Bronco – two models for which Ford boosted manufacturing targets.
Now that’s about to change. Crain’s Detroit Business is reporting that Ford will begin scaling back its Bronco production amid rising inventories and lower sales. The move will bring with it the need to relocate some 400 production workers from the Michigan Assembly Plant in Wayne to other facilities, though reports say none are being laid off.
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Crain’s notes that Bronco sales were down 10% through October, and sitting on dealer lots longer. Cox Automotive recently noted that Ford’s inventory of new vehicles hit a day’s supply of 115 in October, compared to 85 industry-wide.
The production change, which Ford said in a memo would “reduce our line rate to better serve customer demand for Bronco,” is set to take place early next year.
Meanwhile, collateral damage may already be underway: some industry observers have speculated that a spate of layoffs announced by Michigan auto supplier Webasto Roof Systems are potentially related to Ford’s pullback on the Bronco.
Webasto, says Crain’s, “notified the state that it plans to lay off 218 employees as a result of reduced production by a customer.” Though that customer was unnamed, the journal pointed out the Ford Bronco program was one of the largest for Webasto.
Capping off a tough week for Ford was the coinciding announcement that the automaker would reduce its workforce by 4,000 in Europe and the U.K. by the end of 2027.
In more bad news for the Bronco, specifically: earlier this week the NHTSA announced a probe that looks into whether an April Ford recall involving the Bronco Sport and Maverick pickup was effective. At issue is a problem where the vehicles can suddenly lose power, a circumstance that a handful of consumers say persisted even after the recall fix was performed.
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Earnings Scheduled For November 21, 2024
Companies Reporting Before The Bell
• Vestis VSTS is likely to report quarterly earnings at $0.13 per share on revenue of $690.99 million.
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• Construction Partners ROAD is estimated to report quarterly earnings at $0.57 per share on revenue of $538.05 million.
• Cerence CRNC is projected to report quarterly loss at $0.38 per share on revenue of $47.65 million.
• BJ’s Wholesale Club BJ is projected to report quarterly earnings at $0.93 per share on revenue of $5.11 billion.
• Ituran Location & Control ITRN is projected to report quarterly earnings at $0.66 per share on revenue of $85.44 million.
• Baozun BZUN is projected to report earnings for its third quarter.
• Shoe Carnival SCVL is likely to report quarterly earnings at $0.65 per share on revenue of $316.23 million.
• Atkore ATKR is projected to report quarterly earnings at $2.47 per share on revenue of $748.32 million.
• iQIYI IQ is likely to report quarterly earnings at $0.04 per share on revenue of $1.02 billion.
• GreenTree Hospitality Gr GHG is likely to report earnings for its third quarter.
• PDD Holdings PDD is projected to report quarterly earnings at $2.82 per share on revenue of $14.47 billion.
• Deere DE is projected to report quarterly earnings at $3.87 per share on revenue of $9.35 billion.
• KE Holdings BEKE is expected to report quarterly earnings at $0.21 per share on revenue of $3.23 billion.
• Baidu BIDU is expected to report quarterly earnings at $2.35 per share on revenue of $4.69 billion.
• Yunji YJ is likely to report earnings for its third quarter.
• Evogene EVGN is projected to report quarterly loss at $1.01 per share on revenue of $2.85 million.
• Lotus Technology LOT is expected to report earnings for its third quarter.
• RealReal REAL is projected to report earnings for its fourth quarter.
Companies Reporting After The Bell
• Copart CPRT is estimated to report quarterly earnings at $0.37 per share on revenue of $1.10 billion.
• UGI UGI is likely to report quarterly loss at $0.29 per share on revenue of $1.65 billion.
• Matthews International MATW is likely to report quarterly earnings at $0.38 per share on revenue of $440.46 million.
• Gap GAP is projected to report quarterly earnings at $0.58 per share on revenue of $3.81 billion.
• Logility Supply Chain LGTY is projected to report quarterly earnings at $0.09 per share on revenue of $25.93 million.
• Elastic ESTC is estimated to report quarterly earnings at $0.38 per share on revenue of $354.28 million.
• Ross Stores ROST is estimated to report quarterly earnings at $1.40 per share on revenue of $5.15 billion.
• NetApp NTAP is estimated to report quarterly earnings at $1.78 per share on revenue of $1.64 billion.
• Intuit INTU is estimated to report quarterly earnings at $2.36 per share on revenue of $3.14 billion.
• Geospace Technologies GEOS is projected to report earnings for its fourth quarter.
• Natural Grocers NGVC is expected to report earnings for its fourth quarter.
This article was generated by Benzinga’s automated content engine and reviewed by an editor.
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LUCID ALERT: Bragar Eagel & Squire, P.C. is Investigating Lucid Group on Behalf of Long-Term Stockholders and Encourages Investors to Contact the Firm
NEW YORK, Nov. 20, 2024 (GLOBE NEWSWIRE) — Bragar Eagel & Squire, P.C., a nationally recognized shareholder rights law firm, is investigating potential claims against Lucid Group LCID on behalf of long-term stockholders following a class action complaint that was filed against Lucid on April 1, 2022 with a Class Period from November 15, 2021 to August 3, 2022. Our investigation concerns whether the board of directors of Lucid have breached their fiduciary duties to the company.
The Lucid class-action lawsuit alleges that, as Lucid transitioned into a publicly-traded company, defendants assured investors that Lucid would produce 577 EVs in 2021, 20,000 EVs in 2022, and 49,000 EVs in 2023 (including 12,000 of the Project Gravity SUV, which would launch that year). Indeed, the defendants repeatedly assured investors that Lucid’s production capacity was rapidly increasing and that Lucid would reach its production targets. However, as the Lucid class-action lawsuit alleges, the defendants overstated Lucid’s production capabilities while concealing that “extraordinary supply chain and logistics challenges” were hampering Lucid’s operations from the start of the Class Period.
On February 28, 2022, Lucid admitted that it: (1) had only delivered approximately 125 EVs in 2021 and still had only produced approximately 400 EVs by February 28, 2022; (2) would only produce between 12,000 and 14,000 EVs in 2022; and (3) would delay the launch of the Lucid Gravity until 2024. Defendant Rawlinson attributed the slashed production outlook to “the extraordinary supply chain and logistics challenges [Lucid] encountered.”
If you are a long-term stockholder of Lucid, have information, would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Brandon Walker or Marion Passmore by email at investigations@bespc.com, by telephone at (212) 355-4648, or by filling out this contact form. There is no cost or obligation to you.
About Bragar Eagel & Squire, P.C.:
Bragar Eagel & Squire, P.C. is a nationally recognized law firm with offices in New York, California, and South Carolina. The firm represents individual and institutional investors in commercial, securities, derivative, and other complex litigation in state and federal courts across the country. For more information about the firm, please visit www.bespc.com. Attorney advertising. Prior results do not guarantee similar outcomes.
Contact Information:
Bragar Eagel & Squire, P.C.
Brandon Walker, Esq.
Marion Passmore, Esq.
(212) 355-4648
investigations@bespc.com
www.bespc.com
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O'Connor Group Breaks Ground on Elysian Watertown Square Unveiling Plans for Modern Living and Community Integration in Historic Town Center
In the heart of Watertown, MA the five-story, 190,000-square-foot mixed-use building is expected to begin operation in 2026.
NEW YORK, Nov. 20, 2024 /PRNewswire/ — O’Connor Group of New York today announced the launch of Elysian Watertown Square Residential Property Owner, LLC, a joint venture of O’Connor Group (“O’Connor”), FrontRange Capital Partners (“FrontRange Capital”), and Takenaka Corporation (“Takenaka”). This 142-unit development at 53 Pleasant Street, Watertown, MA, will include a thoughtful mix of residential and retail space along vibrant Main Street.
Upon completion, the development will deliver 190,000 square feet of rental units, 15% of which will be allocated for households making 65-80% of the median income. The project will also include the renovation of a historic row house built in 1890, an undertaking that will convert the property into five for-sale condominium townhouse units with one set aside for affordable home ownership.
“We are thrilled to be bringing new market rate and affordable housing to a Main Street location like this in Watertown Square. With the help of our elected officials, town planning staff, and a first rate team of professionals we have designed a building in The Elysian at Watertown Square that we think will serve both new and existing Watertown residents for years to come – all in a fully sustainable program which sets the standard for new development in the area. With the help of great partners like Takenaka, FrontRange Capital, and Sumitomo, this type of housing development is a cornerstone of O’Connor’s future growth initiatives,” said John F. O’Connor of the O’Connor Group.
Developed to the highest sustainability standards, the property will be Passive House certified. The all-electric building will feature rooftop solar panels, structured parking with EV charging stations, and a transportation management plan to promote alternative options. Incorporating the resident-first experience created at Elysian at Stonefield, Elysian Watertown Square will offer a hotel-style lobby, a drop-off court with a porte-cochère entrance, meeting rooms, a clubroom, a coworking area, a state-of-the-art gym, a pet care spa, bike storage, and two rooftop terraces. The property will also include an art walk connecting Main Street to both Pleasant Street and The Charles River Walk.
“FrontRange Capital is very excited to partner with the O’Connor Group on another compelling development opportunity. Over the Company’s 40-year history, O’Connor has proven its ability to identify and capitalize attractive investments across the real estate spectrum. Elysian Watertown Square is another great example of their long-standing development track record, and we couldn’t be more pleased to be a part of this exciting project,” said Christopher Davis, Managing Principal of FrontRange Capital.
The five-story building is designed by ICON Architecture to embrace the aesthetic of Watertown through the inspiration of design elements inspired by the surrounding buildings. The Main Street side will include 6,500 square feet of retail space for a future restaurant and service-oriented retail. Additionally, O’Connor Group will work with the local art community to establish public art installations along the art walk where there is a boutique office/gallery space.
Elysian Watertown Square will be built by Dellbrook|JKS. Headquartered in Quincy, MA, the firm boasts more than 20 years of experience in the construction of residential buildings, including projects with Passive House construction standards. Construction of the project is expected to be complete in the Summer of 2026.
“The City’s recently adopted plan for Watertown Square recommended more housing to make the Square a lively destination and support our small businesses. The 104 Main Street development will bring more people into the Square and help us achieve the plan’s vision,” said Watertown city manager George Proakis.
About O’Connor Group
O’Connor Group is a real estate development and investment company based in New York City. Founded in 1983 the company has been involved in the development of approximately 20,000 units over its 40-plus-year history. Alongside Elysian Watertown Square Residential Property Owner, LLC, O’Connor Group develops and invests in residential, retail, industrial and boutique office sectors. With a proven track record in developing quality projects throughout the United States and Mexico. For more information, please visit oconnorcp.com.
About FrontRange Capital
FrontRange Capital is a real estate private equity firm specializing in strategic partnerships with leading middle-market real estate companies. FrontRange provides both the capital and operational expertise for management teams to further institutionalize their businesses and execute their growth plans. The firm strives to serve its investors by being a partner of choice for real estate owners and operators, with investment opportunities and financial terms that reflect the value brought to each relationship. For more information, please visit frontrangecap.com.
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SOURCE O’Connor Group
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Starbucks weighs strategic partnerships for China operations
(Reuters) -Starbucks reiterated on Thursday it is exploring strategic partnerships for its Chinese operations, after a media report saying the company is considering selling a stake in the business to a local partner.
The Seattle-based company, facing a decline in demand for its beverages in major markets such as the U.S. and China, aims to revamp its U.S. stores and gain a better understanding of its Chinese operations, the firm’s new CEO Brian Niccol told investors last month
“All indications show me the competitive environment is extreme (in China)… and we need to figure out how we grow in the market … in the meantime, we continue to explore strategic partnerships that could help us grow in the long term,” he said on an earnings call on Oct. 31.
Bloomberg reported on Thursday that Starbucks was exploring options for its Chinese operations including the possibility of selling a stake in the business, and it has gauged interest from prospective investors including domestic private equity firms.
Responding to the report, Starbucks said in a statement it was “working to find the best path to growth, which includes exploring strategic partnerships.”
“We are fully committed to our business and partners, and to growing in China,” it said, without elaborating.
In China, its second-largest market, Starbucks has grappled with weak consumer spending and stiff competition from local coffee chains such as Luckin Coffee in a sluggish macroeconomic environment.
Last year, Luckin pipped its U.S. rival to the top spot on annual sales for the first time in the China market.
Starbucks, which operates nearly 7,600 stores in China, has reported declining sales in the country for three consecutive quarters, with a 14% fall in the last quarter.
The company suspended its forecast for the next fiscal year last month, as its CEO prepares a turnaround plan for the coffee giant.
(Reporting by Angela Christy, Brenda Goh and Kanjyik Ghosh; Editing by Abinaya Vijayaraghavan, Miyoung Kim and Jacqueline Wong)
Mohamed El-Erian Warns Against Simplistic Narratives As Trump Plans Aggressive Tariff Strategy: 'The Issue Is Quite Complex'
As President-elect Donald Trump prepares to return to the White House, renowned economist Mohamed El-Erian is cautioning against media oversimplification of the incoming administration’s proposed tariff strategies.
What Happened: In a recent statement on X, El-Erian highlighted the intricate nature of Trump’s tariff discussions, noting that the proposed economic policies encompass at least three complex economic stages influenced by multiple factors, including trade flows, corporate pricing strategies, and geopolitical considerations.
El-Erian’s core message remains clear: Trump’s tariff debate requires sophisticated, nuanced analysis that transcends simplistic narratives. “The issue is quite complex,” he emphasized, underscoring the need for comprehensive economic understanding beyond headline rhetoric.
Trump’s proposed economic blueprint, which includes a universal tariff of up to 20% on imports and potentially up to 60% on Chinese goods, has sparked intense economic debate. Tech investor Peter Thiel suggests these tariffs could significantly impact Chinese companies while causing minimal disruption to U.S. consumers.
Why It Matters: Goldman Sachs economist David Mericle warns that Trump’s proposed universal tariff could push inflation back to 3%, potentially complicating Federal Reserve monetary strategies.
The National Retail Federation estimates Trump’s tariff proposals could reduce annual consumer spending by $78 billion.
Prominent business leaders have voiced concerns. Citadel LLC CEO Ken Griffin described Trump’s proposed tariffs as a “long, slippery slope” that could hamper U.S. global competitiveness.
Retailers like AutoZone and Columbia Sportswear have signaled potential price increases that would be passed directly to consumers.
“Tariffs would create a headwind to the performance of stocks with high international revenue exposure due to the risk of retaliatory tariffs and heightened geopolitical tensions,” Goldman Sachs analyst David Kostin stated.
Goldman Sachs noted that U.S. stocks with domestic sales focus outperformed those with international exposure by 1 percentage point the day after Trump’s election and by 4 pp in the following month but underperformed by 9 pp in the next 12 months.
Key stocks in its Domestic Sales Basket include CVS Health Corp. CVS, Wells Fargo & Co. WFC, T-Mobile US Inc. TMUS, Verizon Communications Inc. VZ, Lowe’s Cos. Inc. LOW, Intuit Inc. INTU, and Union Pacific Corp. UNP.
The International Sales Basket includes Meta Platforms Inc. META, Broadcom Inc. AVGO, Visa Inc. V, Mastercard Inc. MA, QUALCOMM Inc. QCOM, Netflix Inc. NFLX, McDonald’s Corp. MCD, Philip Morris Intl PM, Applied Materials Inc. AMAT, and Intel Corp. INTC.
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Elon Musk Says Amazon Founder Jeff Bezos Urged Tesla, SpaceX Investors To Dump Stakes, Predicting Trump's Loss
Tesla Inc. TSLA and SpaceX CEO Elon Musk in his latest post alleged that Amazon founder and executive chairman Jeff Bezos predicted President-elect Donald Trump‘s defeat and advised people to sell their stakes in Musk’s companies before the election.
What Happened: Musk shared in a post on X that he learned about Bezos’ advice to investors during a recent visit to Trump’s Mar-a-Lago Club in Florida.
Both Musk and Bezos didn’t respond to Benzinga.com to clarify these claims.
Musk has played a significant role in Trump’s resurgence, not only by investing millions into Trump’s campaign but also by acting as a policy advisor and promoter. X (formerly Twitter), which is Musk’s social media platform also aided the campaign by promoting the Make America Great Again or MAGA movement.
On the contrary in October, the Washington Post owner Bezos blocked the publication’s endorsement of any U.S. presidential candidate citing concerns about objectivity. The newspaper in 2016 and again in 2020 endorsed Trump’s election opponents, Hillary Clinton and President Joe Biden.
Why It Matters: As president-elect Trump has emerged victorious in the elections, he has appointed Elon Musk along with Republican politician Vivek Ramaswamy as the co-heads of the newly proposed task force DOGE or the Department of Government Efficiency.
As per the notice shared by Trump, the initiative is expected to focus on dismantling bureaucracy, reducing regulations, and cutting wasteful expenditures. The department is scheduled to complete its work by July 4, 2026, coinciding with America’s 250th independence anniversary.
Price Action: Shares of Tesla have risen by 36% to $342.03 apiece since the election on Nov. 5, when the stock closed at $251.44 per share. On the other hand, Amazon.com’s shares were also up 1.7% from the election day.
According to Wednesday’s close Amazon.com was down 0.85% to $202.88, while Tesla fell by 1.15% to $342.03 per share. This compared to a 0.09% decline in Nasdaq 100 to 20.667 points, according to data from Benzinga Pro.
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Adani Group companies lose $26 billion in market value after U.S. indictment
Adani Group companies lost $26 billion in market cap on Thursday, after the U.S. alleged that founder and chairman Gautam Adani was involved in a $250 million bribery scheme.