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Good Morning!
Happy Wednesday! Let’s have a great one:
👉DOT investigates Delta
👉Tesla earnings are in
👉Alphabet earnings are in
DOT: Investigates Delta
The U.S. Department of Transportation is investigating Delta Air Lines after an IT outage on Friday led to thousands of flight cancellations. The DOT cited major disruptions and poor customer service, noting a high volume of complaints. Delta is cooperating with the investigation.
Source: CNN
A software update from CrowdStrike caused a historic outage of Microsoft systems, severely impacting Delta. CEO Ed Bastian called it "a horrible weekend," with over 4,000 flights canceled. Critical systems, like crew tracking, are still down, affecting many crew members. On Tuesday, 12% of Delta flights were canceled and 13% delayed. Social media shows crowded airports and stranded passengers, reminiscent of Southwest Airlines' 2022 crisis, which led to a $140 million penalty from the DOT.
🎯GRIT TAKE: We’re stunned to see Delta … upgrade to VIP now to read the full GRIT Take!
EARNINGS: Tesla
Tesla reported disappointing second-quarter earnings, with automotive sales dropping for the second consecutive period. The stock fell almost ~10% in after-hours trading. Revenue grew by 2% to $25.03 billion, but automotive revenue decreased by 7% to $19.9 billion despite record regulatory credit revenues of $890 million.
Source: CNBC
CEO Elon Musk announced a robotaxi unveiling event on October 10, postponing the original August date. Tesla's self-driving tech faces no regulatory obstacles, according to Musk. However, Tesla's net income fell 45% to $1.48 billion. Despite a challenging year, Tesla remains the top EV seller in the U.S. but is losing market share to competitors.
EARNINGS: Alphabet
Alphabet, Google's parent company, reported second-quarter results in line with analyst expectations for revenue and earnings but missed on YouTube ad revenue. Revenue grew 14% year over year, driven by search and cloud, which hit $10 billion in quarterly revenue and $1 billion in profit for the first time.
Source: CNN
Ad revenue rose to $64.62 billion from $58.14 billion last year, showing growth despite slower expansion due to rising inflation and interest rates. YouTube ad revenue increased to $8.66 billion from $7.66 billion but fell short of estimates, facing competition from platforms like TikTok. Net income climbed to $23.6 billion, or $1.89 per share, up from $18.4 billion, or $1.44 per share, last year. The "Other Bets" unit, including Waymo, earned $365 million, up from $285 million. CFO Ruth Porat announced a $5 billion investment in Waymo.
Chart of the Day
📊 Big Bubbles
Source: @gs_investing
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