—— US GDP Growth Exceeds Forecast in Second Quarter; Amex New Perks Add Value to Gold Card; Biggest Record Lable Tanks 30% Amid Slow Growth; Lineage Achieves Biggest IPO Since Arm; WhatsApp US Active Users Breaks 100 million; Ford Drops Most in 15 Years Amid Warranty Costs; American Airline Sharply Lowers Profit Outlook
1. US GDP Growth Exceeds Forecast in Second Quarter
US economic growth exceeded expectations in the second quarter, demonstrating that demand remains resilient despite higher borrowing costs.
According to the government’s initial estimate, Gross Domestic Product (GDP) grew at an annualized rate of 2.8%, up from a 1.4% increase in the previous period. Personal spending, the primary driver of the economy, rose by 2.3%, surpassing forecasts.
The Bureau of Economic Analysis reported on Thursday that a key measure of underlying inflation increased by 2.9%, down from the first quarter but still above expectations.
Although the pace of growth improved from the first quarter, the figures indicate a slowdown compared to last year. Consumer spending and overall economic activity have decelerated due to high interest rates, which are also gradually helping to control inflation.
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2. Amex New Perks Add Value to Gold Card
American Express Co. is enhancing the benefits of its Gold card, adding new perks for dining and travel but also increasing the annual fee.
Starting soon, Gold cardholders will enjoy additional benefits such as a $100 annual statement credit at Resy-linked restaurants in the US and $84 in credits for Dunkin’ purchases, along with a new limited edition White Gold design, in addition to the existing Gold and Rose Gold options. These perks are added to the current annual $120 Uber credit.
“We’re keeping what’s great and we’re making it easier to tap into it,” said Howard Grosfield, president of US consumer services at Amex.
The annual fee for the Gold card will increase by $75, bringing it to $325, effective from Oct. 1 on customers’ renewal dates. Despite the fee hike, Grosfield emphasized that the new perks total up to $420 in statement credits, ensuring that cardholders receive more value than the membership fee.
“Our strategy has always been to deliver more value to our card members far in excess of the subscription membership fee they pay,” he said.
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3. Biggest Record Lable Tanks 30% Amid Slow Growth
Universal Music Group NV’s shares plummeted by as much as 30%, marking the largest decline since the company’s initial public offering, following disappointing subscription and streaming revenue growth.
The world’s largest record label, representing artists like Taylor Swift and Drake, reported that subscription revenue in recorded music increased by 6.9% in constant currency terms during the second quarter. This fell short of the average 11% growth estimate from a Bloomberg survey of analysts.
The weaker sales were largely attributed to a slowdown in advertising revenue growth at Spotify Technology SA and YouTube. Additionally, Universal Music Group (UMG) is facing challenges with social media companies that are essential for distributing its music, according to Chief Financial Officer Boyd Muir.
In May, Meta Platforms Inc. ceased licensing premium music videos from UMG for Facebook after determining they were less popular than other music products. Furthermore, UMG’s dispute with TikTok resulted in a month of lost revenue from the platform during the quarter.
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4. Lineage Achieves Biggest IPO Since Arm
Temperature-controlled storage and logistics giant Lineage Inc. saw its shares climb as much as 5.4% in its public debut, following a successful initial public offering (IPO) that raised approximately $4.4 billion, the largest IPO of the year.
By 1:56 p.m. on Thursday in New York, shares of Novi, Michigan-based Lineage rose to $80.70 each, a 3.5% increase from the IPO price of $78 per share.
This trading activity gives Lineage, founded by former Morgan Stanley investment bankers, a market value of nearly $20 billion, based on the outstanding shares listed in its filings with the US Securities and Exchange Commission.
Lineage’s IPO, priced near the top of its marketed range, is the largest since Arm Holdings Plc’s $5.2 billion debut in September, signaling a revival for the struggling US IPO market.
With the inclusion of Lineage, US listing volume has rebounded from the post-pandemic slowdown. Companies have raised more than $28 billion this year, according to Bloomberg data, which is about double the amount raised in the same period last year. However, this is still below the figures seen by this point in 2020 and 2021.
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5. WhatsApp US Active Users Breaks 100 million
Meta Platforms Inc.’s WhatsApp has reached 100 million monthly active users in the US and is experiencing double-digit growth in its daily audience. This signifies the messaging app’s increasing traction in a market traditionally dominated by Apple Inc.’s iMessage and conventional texting.
Meta acquired WhatsApp in 2014 for $19 billion. While the app has gained billions of users globally and become essential in countries like Brazil and India, its US presence has been comparatively limited. Recently, Meta has marketed WhatsApp as a solution for bridging the gap between iPhone’s “blue bubble” and Android’s “green bubble” users. A notable campaign included a television commercial featuring the cast of ABC’s Modern Family, highlighting the family using WhatsApp for group chats across different phone types.
Increasing its user base in the US would bolster Meta’s efforts to expand WhatsApp’s business potential, which has progressed slower than some had anticipated.
The US market is typically the most profitable for advertising, and Meta reports that click-to-message ads—where users are directed from their Facebook or Instagram feeds to a direct message conversation with a business—are already generating billions of dollars in revenue.
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6. Ford Drops Most in 15 Years Amid Warranty Costs
Ford Motor Co.’s shares experienced their worst day in over 15 years following a significant earnings miss attributed to a surge in warranty repair costs for older vehicles.
Recurring quality problems have been inflating Ford’s warranty expenses for years, but an unexpected $800 million increase in the second quarter caught investors off guard. Ford reported adjusted earnings per share of 47 cents on Wednesday, falling well short of the 67-cent average estimate of analysts surveyed by Bloomberg.
As a result, shares of the Dearborn, Michigan-based company plummeted 18% on Thursday in New York, marking their largest decline since November 2008. This drop erased the stock’s gains for 2024, leaving it down more than 8% for the year.
“The warranty challenges are frustrating for investors, as they come on the heels of many other warranty issues in past years and at times drag results without warning,” Barclays analysts led by Dan Levy noted in a research report.
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7. American Airline Sharply Lowers Profit Outlook
American Airlines Group Inc. has reduced its earnings forecast as it contends with the impact of earlier missteps that will affect revenue and profits for the remainder of 2024.
The airline now expects its adjusted full-year profit to be between 70 cents and $1.30 per share, significantly lower than the previous projection of up to $3.25 per share, according to a statement released on Thursday. Additionally, American Airlines anticipates breaking even in the third quarter, falling well short of the 49 cents per share profit expected by analysts.
Although the airline exceeded earnings estimates for the second quarter, the revised outlook — the second reduction this year — underscores the repercussions of overly optimistic domestic demand forecasts and a flawed sales strategy that alienated some valuable corporate clients.
The shift away from this strategy and the resultant loss of corporate business are expected to reduce American Airlines’ revenue by about $1.5 billion this year, Chief Executive Officer Robert Isom stated during the carrier’s quarterly earnings call.
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本文内容来自《Financial Times》、《Bloomberg》，以及《The Real Deal》等多家财经新闻媒体。