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GOLDMAN AND BANK OF AMERICA EARNINGS ARE IN
Earnings continue, Apple visits China, LinkedIn Layoffs
GRIT
17 Oct
Good Morning!
We’re off to a busy start this Tuesday. Here’s your finance edge in 5 minutes! What we’re talking about today:
👉 Earnings season continues with Goldman Sachs and Bank of America
👉 Apple visits China amid U.S. limiting semiconductor goals
👉 LinkedIn begins massive lay-offs
Here we go:
EARNINGS: Goldman Sachs and Bank of America
Goldman Sachs and Bank of America continued earnings season on Tuesday morning amid worries about a faltering macroeconomy. One common main point for banks is diminishing bond portfolios and loan losses. Bank of America and Goldman Sachs beat their Wall Street expectations and estimates. Bank of America surpassed profit and revenue expectations as its net interest income for Q3. Goldman Sachs outperformed in bond trading, resulting in their revenue exceeding expectations. Goldman Sachs relies on trading and investment banking, while Bank of America focuses on traditional banking revenue.
Source: Fortune, CNBC
Earnings Breakdown:
Goldman Sachs earnings came in at per share of $5.47 vs. $5.54 est., while their revenue was $11.82B vs $11.21B est.
Bank of America earnings came in at per share of $0.90 vs $0.83 est. Revenue landed at $25.2B vs $25.1B est.
🎯 GRIT TAKE: Goldman Sachs has pushed to diversify their income streams, specifically under CEO David Soloman… CLICK HERE TO UPGRADE TO PAID to read our full GRIT takes! 💥
APPLE: Surprise Visit to China
Apple CEO Tim Cook made a surprise appearance at a Tencent gaming competition in China, supporting one of the App Store's primary revenue sources, amid ongoing questions about the future of the U.S. company in its leading international market.
Source: Bloomberg
Cook's public appearance highlights China's significance to Apple, which stands as its largest foreign market and is vital to its production chain. However, his visit comes when the U.S. is intensifying measures to limit China's semiconductor goals.
While Apple has long been the premier brand in China, recently, it has faced challenges in the market and a rising inclination towards domestic brands, such as Huawei Technologies. The launch of iPhone 15 followed just a few weeks after the release of Huawei's Mate 60 Pro, which was hailed as a victory against U.S. sanctions due to its sophisticated processor made in China.
LINKEDIN: Lays Off Workers
On Monday, Microsoft's LinkedIn confirmed the layoff of nearly 700 employees, with a significant portion from the engineering department, as first reported by CNBC. There were also cuts made in human resources and the finance department.
Source: CNBC, Bloomberg
These cuts are a response to the platform's consistent slowing revenue growth over the past eight quarters. In the second quarter, the growth was only 5%, even though there has been a steady rise in membership over the last two years, as stated by Microsoft in July.
Earlier this year, Microsoft laid off 10,000 employees to cut costs on their bottom line. CNBC has said that LinkedIn will focus on hiring in India to look for cheaper labor costs.
Headlines You Need To Know: 🎙
Johnson and Johnson beat earnings
Retail sales rose 0.7% in September
Biden is set to visit Israel
Real estate brokers are pocketing up to 6% in fees
Choice offers to buy Wyndham hotels in $9.8 billion deal
China property bonds looked cheap. They weren't.
Snap stock rises nearly 12% on lofty 2024 goals
Former FTX engineer tells jury about panicky rooftop meeting
The U.S. gets a C+ in retirement
The “Terminator” Turned Luxury King
You might have heard of brands like Louis Vuitton, Dior, Hennessy, Dom, and Sephora, but the story behind them is wild.
Arnault is from the town of Roubaix in northern France, where he pursued an engineering degree at the esteemed École Polytechnique. After graduation, he began his professional journey at his father's construction firm, Ferret-Savinel.
Source: Getty Images
In 1984, Arnault took over a struggling company known as Agache-Willot-Boussac, which held ownership of esteemed brands such as the French department store Bon Marche and the fashion house Christian Dior, for around $15 million. He rebranded the company as Financiere Agache and instigated a revitalization effort that involved cost reduction and divestment of certain businesses and lay-offs of over 9,000 people. This garnered the nickname "the Terminator.” Within the first year, Dior reported earnings of $112 million.
During the late 1980s, he turned his attention to LVMH Moët Hennessy - Louis Vuitton, investing $2.6 billion to acquire a significant stake and assume the roles of its largest shareholder and chairman. In 1987, Louis Vuitton and Hennessy had a massive merger. The CEOs of each company clashed, so Arnault stepped in, removed them both, and named himself the new CEO of the newly merged LVMH. Today, the company is worth $438 billion, making “the Terminator” one of the wealthiest people in the world.
Chart of the Day
📊 Mortgage Affordability
Mortgage affordability in the U.S. is at an all-time low.
Source: National Association of Realtors, Unusual Whales
GRIT Meme of the Day 😂
Tag GRIT Capital on social media for a chance to be featured in our meme or Tweet of the day in our GRIT daily newsletter! 👇
Source: @thealphathought
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