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Good Morning!
Happy Wednesday! Let’s have a great day:
👉Volkswagen’s big investment
👉FedEx earnings are in
👉Airbus deliveries delayed
VOLKSWAGEN: Major Investment
Volkswagen Group plans to invest up to $5 billion in electric vehicle startup Rivian, starting with a $1 billion initial investment. This will be followed by $4 billion by 2026, aimed at developing electrical architecture and software technology in a joint venture. Rivian's shares jumped over 50% after the announcement. The initial investment will be in the form of a convertible note, potentially converting into Rivian shares in December.
Source: InsiderEV
Rivian CEO RJ Scaringe stated this capital would support the ramp-up of their smaller R2 SUVs and a midsize EV platform, with Volkswagen using Rivian’s technology for future vehicles. The partnership aims to assist Rivian in becoming cash flow-positive amid its financial challenges and cost-cutting measures, including pausing a new factory in Georgia to save over $2.25 billion.
🎯 GRIT TAKE: The Volkswagen investment is a far more …upgrade to VIP now to read the full GRIT Take!
EARNINGS: FedEx
FedEx forecasted higher-than-expected profits and announced a $2.5 billion stock buyback over the next year, boosting shares. Adjusted earnings for fiscal 2025 will be $20 to $22 per share, exceeding analysts' estimates.
Source: CNN
Revenue is expected to grow in the low-to-mid single digits. CEO Raj Subramaniam is consolidating the Express, Ground, and Services units. FedEx is also considering divesting its freight business. Operating results at FedEx Freight improved due to higher yields and cost management. FedEx aims for $2.2 billion in cost reductions this fiscal year. The company reported quarterly earnings of $5.41 per share, beating expectations, with $22.1 billion in revenue.
AIRBUS: Delayed Deliveries
Airbus has warned that aircraft deliveries scheduled for 2025 and 2026 might be delayed due to persistent supply-chain issues. These problems have already forced Airbus to reduce its 2024 delivery targets and postpone increasing production rates for its popular A320 model.
Source: NBC
This disruption is expected to negatively impact the company's earnings and cash flow this year, causing its stock to drop by up to 10%. Despite these challenges, demand for Airbus aircraft remains high due to a travel boom, making newer models like the A320, A330, and A350 increasingly difficult to obtain.
Chart of the Day
📊15 Stocks Profit Margins
Source: Carbon Finance
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Source: @wallstreetoasis
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