Podcast Summary
Apple's Resilient Earnings Report and Tech Earnings Mixed Bag: Apple's services business continues to grow, but the company may need to raise prices to maintain momentum. Tech earnings showed a mix of strong and weak performances, highlighting the importance of robust business fundamentals.
Effective communication skills are essential in business and life, and the Think Fast, Talk Smart podcast can help hone those skills. Apple had a respectable quarter despite underperforming in some areas, with revenue up 8% to $90.1 billion, and services seeing 5% growth. Apple's services business, which includes more than 900 million paid subscriptions, continues to grow, but the company may need to raise prices to continue this growth. Apple's iPhone revenue was lower than expected, but the company remains resilient, with revenue for the fiscal year up 8% to $394 billion. Other tech companies also reported earnings, with some, like Microsoft and Alphabet, seeing strong growth, while others, like Meta Platforms, faced challenges. Overall, it was a mixed bag for tech earnings, but the resilience of companies like Apple highlights the importance of strong business fundamentals. For those looking to improve their communication skills, the Think Fast, Talk Smart podcast offers valuable insights from experts on various topics, including managing anxiety, taking risks, and harnessing nervous energy.
Apple's Consistent Demand vs Amazon's Slowing AWS Growth: Apple's high-income consumers continue to demand new devices, while Amazon's profit engine, AWS, faces slowing growth and decreased margins, causing investor concerns and a stock drop.
Apple and Amazon, two tech giants, faced different challenges in their latest earnings reports. While Apple continues to benefit from high-income consumers and their consistent demand for new devices, Amazon's slowing growth in its AWS division and lowered guidance for the holiday quarter raised concerns among investors. The maturing retail business and decreasing operating margins in AWS have investors questioning Amazon's profit engine, leading to a significant stock drop. Despite the dip, Amazon's retail business remained strong, with a 13% increase overall. The wider-than-expected guidance range for the holiday quarter, a crucial period for retailers, also surprised investors, leading to some skepticism. Overall, these tech giants faced different challenges, with Apple's consistent consumer demand and Amazon's slowing growth in AWS causing ripples in their respective markets.
Meta and Google report lower earnings and revenue: Both Meta and Google faced declining earnings and revenue in Q3, with Meta experiencing a steeper decline. They're investing in future tech like Meta's metaverse and Google's other bets, but challenges in the ad market raise concerns about their focus.
Both Meta Platforms (Facebook) and Alphabet (Google) reported lower-than-expected earnings and revenue for their third quarters, with Meta experiencing a particularly steep decline. The ad market is facing challenges, and both companies are investing heavily in future technologies, such as Meta's metaverse and Google's other bets. Meta's investment in the metaverse, which is still a developing concept, has raised concerns about the company's focus on this long-term project while dealing with a declining core business and advertising market. Google's YouTube ad revenue saw a decrease, which might indicate competition from platforms like TikTok. Despite these challenges, some investors might see opportunities in these stocks for the long term due to the potential of these companies' future technologies. However, investors should be prepared for a bumpy ride as both companies navigate these issues.
Diversified Portfolios of Meta and Alphabet, Visa's Strong Q4, and Microsoft's Lower-than-Expected Guidance: Alphabet's diversified business areas spread risk, Visa reported a strong Q4 with dividends and buybacks, Microsoft's revenue exceeded $50B but faced lower guidance
While Meta and Alphabet both have diverse business portfolios, the latter's approach seems less risky due to its distribution of bets across various areas. Meanwhile, Visa reported a strong Q4 with impressive revenue growth and a significant increase in dividends and share buybacks, making it a valuable core Fintech holding. Despite Visa's optimistic outlook on the economy, investors should be prepared for potential reassessment if a recession occurs. Microsoft, on the other hand, reported revenue over $50 billion in Q1 but faced a dip in shares due to lower-than-expected guidance for the current quarter.
Microsoft's revenue growth slows, but Azure and LinkedIn shine: Microsoft's revenue growth is slower than expected, but Azure's 35% increase and LinkedIn's 17% revenue hike offset the decline. Ford's shift from autonomy to electric vehicles led to a loss but a 8% increase in shares.
Microsoft's revenue growth is slower than expected, with a 2% increase predicted for the next quarter. This marks Microsoft's lowest rate of revenue growth in the last 5 years. However, there are positives, such as the continued growth of Azure Cloud business at 35%, which has surpassed Amazon's web services growth. LinkedIn, which was once seen as a risky acquisition, is now a significant contributor to Microsoft's revenue, with a 17% increase and 24% increase in sessions. Ford Motor, on the other hand, reported a loss in Q3 but saw a 8% increase in shares due to their decision to abandon their autonomous driving initiative and focus more on electric vehicles. Microsoft's acquisition and monetization of LinkedIn, despite initial skepticism, has proven to be a successful move. Companies are shifting their priorities, with Ford recognizing the complexity and capital requirements of autonomy and focusing on electric vehicles instead. Microsoft's strong financial position, with $50 billion in total liquidity, allows them to continue investing in autonomy while also focusing on their core businesses. Overall, companies are adapting to changing markets and consumer needs, with Microsoft and Ford making strategic shifts to maintain success.
Adaptability in Business: Ford's Self-Driving Car Shift and ExxonMobil's Resilience: Ford's shift from self-driving cars to integration and ExxonMobil's resilience in energy sector highlight the importance of adaptability in business success.
The success of a company can depend on various factors beyond its control, such as infrastructure and technology investment in industries like automotive and energy. Ford's decision to cut losses on self-driving cars and focus on integrating the technology into future vehicles demonstrates the importance of adaptability in business. Meanwhile, companies like ExxonMobil, which have a history of innovation and effective capital allocation, have thrived in the energy sector despite its boom-and-bust cycles. Additionally, Teladoc Health's smaller-than-expected loss and revenue growth, particularly in their direct-to-consumer mental health brand BetterHelp, indicate progress in overcoming past challenges.
Companies Demonstrating Improvements and Efficiency: Teladoc Health shows signs of business normalization with increased U.S. members, higher revenue per member, and improved utilization. Intel aims to save $10B in cost reductions and offers a high dividend yield, but faces significant revenue and income declines.
While Teladoc Health's acquisition price in 2015 may not have been impressive, the company has shown signs of business normalization with an increase in U.S. paid members, higher revenue per member per month, and improved utilization. On the other hand, Intel's Q3 profits came in higher than expected, but the business still faces a downtrend with significant revenue and adjusted net income declines. Intel aims to save up to $10 billion in cost reductions by 2023 and offers a dividend yielding over 5%. These announcements serve as a way for companies to demonstrate improvements and efficiency in the future. While Intel's cost-cutting measures and potential savings may attract investors, the business's overall downtrend raises concerns.
Chipotle's Q3 Profits Surpass Expectations, but Customer Visits Decrease: Despite a dip in customer visits, Chipotle's profits grew, driven by sales increases and improved restaurant margins. The company aims to expand and innovate, justifying its high valuation.
Chipotle's third quarter profits exceeded expectations, but customer visits decreased, leading to a slight dip in share price. Despite this, CEO Brian Niccol and his team are effectively managing inflation and price increases, and aim to expand the business to around 5,600 stores, justifying the high valuation. Sales grew by 14% to $2.2 billion, driven by a 7.6% increase in comp sales and a 22% increase in in-store sales, with digital sales representing 37%. Restaurant level margins were up 180 basis points to 25.3%, and adjusted earnings increased by 35% to $9.51. Chipotle continues to innovate, with the introduction of Chippy, an autonomous chipmaking robot, and a focus on the core concept, with no plans for expanding to other cuisines or concepts, such as breakfast, at present. McDonald's reported strong results, with global same store sales up 9.5% and an increase in customer traffic, leading to new all-time highs for their shares.
McDonald's faces global challenges, Jolly Ranchers are polarizing candies: McDonald's deals with currency fluctuations and international traffic, while Jolly Ranchers are loved for their taste but criticized for their small size and long-lasting effect.
McDonald's, as a global company, faces challenges such as currency fluctuations and international traffic, which impacted their overall revenue and operating profits despite strong sales in the US and global markets. However, these issues are outside of the company's control. The CEO's comments about the McRib being the greatest sandwich of all time were seen as odd, but the company's impressive operating results and dividend increase cannot be denied. In the world of Halloween candies, Jolly Ranchers are considered overrated by some due to their small size, cheap price, and long-lasting effect on the mouth. They are not chocolate, and their fruity flavor can make one want to keep eating, leading to an inconvenient consumption experience. Despite this, some people cannot resist their delightful taste and find it hard to stop eating them. Overall, McDonald's faces unique challenges as a global brand, while Jolly Ranchers remain a polarizing candy with a long-lasting impact.
Personal preferences shape opinions on underrated and overrated candies: People have strong feelings towards certain candies, with some being unfairly criticized or underappreciated, while others are beloved but less recognized.
People have strong opinions about underrated and overrated candies. Some, like Twizzlers, are widely panned, while others, like Rolos and Payday, are beloved but not as widely recognized. The discussion also touched on the business side of candy, with Lennox International mentioned as a company worth considering due to its strong performance in the HVAC and refrigeration market. The speakers expressed nostalgia for certain candies from their childhoods and shared amusing anecdotes about their experiences with various sweets. Overall, the conversation showcased the power of personal preferences and the enduring appeal of candy.
Investing in Unique Companies with Competitive Advantage: Identifying and investing in companies with unique value propositions and clear competitive advantages can lead to significant returns. Examples include Lennox International and SciTime.
The market has seen impressive performers over the past decade, with some companies not only outperforming the market but also raising their dividends by more than 10% annually. One such example is Lennox International, which has seen a staggering growth of 1800% since its IPO in 1999. Another company worth noting is SciTime, a specialist in designing precision timing microelectro mechanical systems (MEMS). SciTime's focus on moving away from quartz to silicon for better timing keeping mechanisms makes it an interesting investment in the saturated chip market. With the world becoming increasingly reliant on technology and faster communication, the demand for MEMS timing systems is expected to grow. SciTime's earnings are out on November 2nd, and it will be noteworthy to hear their perspective amidst the challenges in the semiconductor space. Overall, investing in companies that have a unique value proposition and a clear competitive advantage, such as Lennox International and SciTime, can lead to significant returns.
