1. H-1B Visas Back in Political Spotlight
2. GE Offshore Wind Set to Lose $1 Billion
3. Kering Brand Sales Slide
4. Qualcomm Unveils High-Speed PC Chip
5. Microsoft Beats Earnings, Stock Rises
6. Private Equity Faces Worst Exit Environment in a Decade
7. Visa Card Spending Tops Estimates
1. H-1B Visas Back in Political Spotlight
In every U.S. presidential election cycle, the H-1B work visa becomes a hot topic.
Critics argue that H-1B workers compete with Americans for high-paying tech jobs. 2024 GOP candidate Vivek Ramaswamy has called for ending the H-1B lottery system and replacing it with a merit-based selection process.
President Biden has proposed reforms to eliminate multiple applications for the same person and make the lottery more equitable. If approved, changes could take effect in FY2025.
U.S. tech employers say domestic universities don’t produce enough engineers and mathematicians, making foreign talent essential. But the limited number of H-1B and green card slots creates hiring challenges.
Only 85,000 H-1B applicants win the lottery each year. Last fiscal year, 758,000 people applied.
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2. GE Offshore Wind Set to Lose $1 Billion
GE CEO Larry Culp said today that the company’s offshore wind turbine division may lose $1 billion this year, with similar losses expected in 2024. However, cash flow is expected to improve.
The offshore wind sector faces many challenges: supply chain disruptions, rising component costs, and high interest rates. Demand may decline and projects may be delayed.
On the bright side, GE has started constructing its first Haliade-X turbine off the coast of Massachusetts.
GE plans to spin off its energy and renewables business into a new company, GE Vernova, next year.
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3. Kering Brand Sales Slide
Luxury brand group Kering reported that same-store sales at Gucci fell 7% year-over-year in Q3, worse than analysts’ expectations of a 6.2% drop. Overall revenue fell 9%.
Kering has underperformed larger rivals like LVMH, and Gucci accounts for two-thirds of group operating income. Gucci replaced its CEO and creative director last year.
Kering’s CEO told analysts the disappointing performance would hurt profitability, and net profit margins could drop by 2%.
He also warned that investors should not expect margin improvement next year, as Kering plans major investments in long-term growth.
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4. Qualcomm Unveils High-Speed PC Chip
At its event in Hawaii today, chipmaker Qualcomm unveiled the Snapdragon X laptop processor, which it claims is twice as fast as Intel’s rival chip and uses 68% less power.
Sources say both Nvidia and AMD are working on laptop CPUs using Arm Holdings designs, intensifying competition in the PC chip space.
Qualcomm says Snapdragon X is 50% faster than Apple’s M2 chip and comes with dedicated AI capabilities.
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5. Microsoft Beats Earnings, Stock Rises
Microsoft reported fiscal Q1 revenue of $56.5 billion, up 13% and ahead of estimates. Azure cloud revenue rose 29%, up from 26% the previous quarter.
CEO Satya Nadella said Microsoft is upgrading its full product line—including Office, Windows, security, and search—with more OpenAI integration.
Earlier this month, Microsoft completed its $69 billion acquisition of Activision Blizzard. Microsoft shares rose more than 5% today.
For the quarter ending in September, Microsoft’s stock had fallen 7.3%, versus a 3.6% drop in the S&P 500.
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6. Private Equity Faces Worst Exit Environment in a Decade
According to PitchBook, private equity firms generated $584 billion in exits via sales or IPOs in the first nine months of 2023, $100 billion less than the same period last year and far below the $1.4 trillion peak in 2021.
High borrowing costs and global uncertainty have made it the worst exit environment in more than a decade.
Weak economic forecasts and high interest rates have hurt the IPO market, and potential buyers are seeking lower valuations, complicating private equity exits.
Singapore’s sovereign wealth fund GIC said the golden era of PE deal-making is over.
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7. Visa Card Spending Tops Estimates
Visa reported Q4 net income of $4.7 billion and earnings per share of $2.27, beating analysts’ expectations.
Total payment volume across Visa’s network hit $3.2 trillion. The company also announced a $25 billion stock buyback program.
CEO Ryan McInerney said consumer spending has remained strong despite economic and geopolitical challenges, and he is optimistic for the next fiscal year.
Visa’s main rival Mastercard will release earnings this Thursday.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.