📺 Netflix, TSMC earnings

Good morning investors! Some big names reported earnings yesterday but everyone’s talking about the global outage.

Today we cover:

• Global tech outage. 🔥

• Netflix and more announce earnings. 📺

• The cost of buying a pet. 🐩

📊Economy and News

Global tech outages hit airlines, banks and businesses

Major airlines, media companies, banks and telecoms firms around the world reported systems outages Friday that were disrupting their operations.

In the U.S., American Airlines, Delta Airlines and United Airlines were among those who grounded flights less than an hour after Microsoft said it resolved a cloud-services-related outage that impacted several low-cost carriers.

It was not immediately clear whether the call to keep flights from taking off was related to the Microsoft cloud outage. The Washington state-based tech giant did not immediately return an emailed request for comment.

Australia's government said the outage appeared to be linked to an issue at cybersecurity firm Crowdstrike.

We can expect some of these stocks to open lower today.

Global hits:

• European Central Bank holds interest rates, says domestic price pressures ‘still high’.

• Bud Light loses more ground, slipping to No. 3 in America.

• First to hike, last to cut? BoE caution cossets pound: Mike Dolan.

Also check: Goldman Sachs sees a 'risk of a setback in the summer' for S&P 500.

📈Stocks

S&P 5005,544.59 (+%) (-0.78%)
DJIA40,665.02 (-1.29%)
NASDAQ17,871.22 (-0.70%)
BRENT CRUDE 84.83 (-0.21%)
* Prices as of Jul 19th, 12:20 AM UTC

Netflix, TSMC, and more announce earnings

Taiwan Semiconductor Manufacturing Company on Thursday beat revenue and profit expectations in the second quarter, as demand for advanced chips used in AI applications continue to surge.

Here are TSMC’s second-quarter results versus LSEG consensus estimates:

• Revenue: 673.51 billion New Taiwan dollars ($20.82 billion), vs. NT$657.58 billion expected

• Net income: NT$247.85 billion, vs. NT$238.8 billion LSEG SmartEstimate weighted toward forecasts from analysts who are more consistently accurate

TSMC reported net revenue rose 40.1% from a year ago to NT$673.51 billion, while net income increased 36.3% from a year ago to NT$247.85 billion. The firm guided second-quarter revenue to be between $19.6 billion and $20.4 billion.

The chip giant currently produces 3-nanometer chips and plans to commence mass production of 2-nanometer chips in 2025. Typically, a smaller nanometer size yields more powerful and efficient chips.

Development of 2-nanometer technology is “progressing well” and is on track for volume production in 2025, said TSMC. 

On the other hand, Netflix said its ad-supported memberships grew 34% during the period compared to the same quarter last year.

Here’s how the company performed for the period ended June 30, compared with Wall Street expectations:

• Earnings per share: $4.88 vs $4.74 per share expected by LSEG

• Revenue: $9.56 billion vs.9.53 billion expected by LSEG

• Total memberships: 277.65 million global paid memberships vs. 274.4 million expected, according to StreetAccount

Revenue was roughly $9.6 billion, up 17% compared to the same quarter last year, driven primarily by the increase in average paid memberships.

Netflix said it now expects full-year reported revenue growth of 14% to 15%, compared with previous guidance of 13% to 15%.

The company reported net income of $2.15 billion, or $4.88 per share, up from $1.49 billion, or $3.29 per share, during the second quarter of 2023.

Netflix’s global paid memberships rose 16.5% year over year to 278 million. This marks one of the last updates Netflix will release regarding its membership numbers.

Here are some other earnings reports:

• Volvo Cars shares closed 11% higher Thursday. Core operating profit for the quarter came in at 8.2 billion Swedish kronor ($776 million), 28% higher than in the same quarter a year earlier, the company said in a statement. Global retail sales rose 15% year-on-year in the quarter, climbing to 205,400 cars, the carmaker said, noting that the jump was driven by a hike in sales of both hybrid and fully electric cars.

• Nokia said its comparable operating profit declined to 423 million euros ($462 million) in the second quarter, down by nearly a third from the 619 million euros posted in the same period of last year. The firm’s Helsinki-listed stock was down 8% at 9 a.m. London time, shortly after the market open. Nokia nevertheless forecasts a “stabilizing” industry environment and a “significant acceleration in net sales growth in the second half” of the year, based on the order intake experienced in recent quarter. Back in October, the company announced it would eliminate up to 14,000 jobs following a plunge in third-quarter earnings.

• United Airlines’ second-quarter profit rose more than 20% from last year as strong demand for international travel boosted the carrier’s results, but its third-quarter forecast came in shy of estimates as an oversupply of flights weighs on fares. United said Wednesday that it expects to earn between $2.75 and $3.25 a share on an adjusted basis in the current quarter, lower than the $3.44 a share analysts polled by LSEG estimated.

  Here’s what United reported for the second quarter compared with what Wall Street expected, based on average estimates compiled by LSEG:

  • Earnings per share: $4.14 adjusted vs. $3.93 expected

  • Revenue: $14.99billion vs. $15.06 billion expected

  United earned $1.32 billion, or $3.96 per share, in the three months ended June 30, up from $1.08 billion, or $3.24 per share, a year earlier. Adjusting for one-time items, it reported earnings of $4.14 a share, compared with $3.93 that analysts expected.

💵Personal Finance

The cost of buying a pet

Most of us treat pets as our family members. We take care of them, take them to the vet, buy toys for them, and feed them well. While this makes us happy, we often neglect the financial aspect of owning a pet.

Buying a cat or a dog may not cost much but keeping a pet can be a costly adventure.

Let’s understand the financial cost of having a pet:

Firstly, buying the pet: Based on your location, pet type, and breed, you will spend anywhere from $100 to $10,000 to buy a pet. The amount can go higher for larger or rare animals such as Arabian horses.

Hack: Save money by turning to shelters and ‘adopt’ instead of ‘buying’.

According to PetPoint, adopting a cat less than a year old costs about $82. It goes down to $52 for cats older than one year. Similarly, for dogs less than a year old, the average cost stands at $185. It goes down to $109 for older dogs.

Preparing a home for your pet: This is technically a one-time expense. In some cases, you may need a big house that can cost a few thousand and in some a small cage may be enough – depending on your pet. Some pet homes, however, are costlier than others. Aquariums, for example, can cost over $1,000 as they require specific equipment.

In addition, you will need initial supplies such as a litter box ($6 to $350), bed, ($15 to $50), collar ($20 to $50), crate ($20 to $40), and bowls for water and food ($10 to $40). So, expect to spend about $350 to $1,300 on these.

Vaccination costs: Vaccination costs $65 to $200 annually for cats and $115 to $230 annually for dogs. Though not always an option, the adoption center might be willing to offer vaccinations at a discounted rate.

Neuter surgery: It can cost about $150 for cats and $35 to $500 for dogs based on a variety of factors such as the size of your pet. Again, shelters typically charge less for the job. Plus, some charities offer low-cost spay/neuter programs.

Training: You may have to spend to train your pet, especially if you have a dog or horse. It is usually. a one time cost that can be as low as $100 or as high as $1,000 per month.

Licensing: Expect to spend up to $150 per year on licensing costs for dogs and about $60 for cats, which may or may not include microchips. This, however, is not a requirement in all states.

All in all, get ready to shell out at least $1,000 in the first year if you wish to own a pet. This goes higher if you have expensive pets such as horses or exotic birds.

We’ll talk about yearly cost in tomorrow’s issue. So, if you have a pet or if you’re planning to get one, then keep an eye for the next issue.

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Nothing in this newsletter is financial advice. Always do your own research and think for yourself.

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