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One of those thoughts under pressure is actually Charter. Oh no, oh, we're not going into that. Yes, are we going to?
Oh?
We both are, okay, So Keitha, there we go. We are going to Githa. Keetha wrong an Avis. She's Bloomberg Intelligence analysts on the latest in the media space. So getha. We were talking about Charter. So shared's really taken a hit lost more Internet subscribers. If you can explain to us, is it just a lot of pressure from these mobile phone companies? Is that what it is?
It is exactly that.
So remember, you know, Charter controls about twenty eight percent of the fixed broadband market. They have roughly nine million subscribers. But what has happened over the past few years is you know, the telecoms, so think about you know, AT and T, Verizon, T Mobile. They've gotten really aggressive. So of course we know that they are the top wireless providers. But where they're competing now with the cable operators is
in fixed broadband, so your home internet connection for instance. Right, So what they're doing is they're offering something called five G home Internet, which is really cheap. It's just very easy to hook up. It costs about fifty dollars a month, and it's much cheaper than cable. And so people are really saying, you know what, this is great. I don't have to deal with, you know, the endless heartache that everybody usually has with their cable company. Plus it's cheaper.
And so that's where we're seeing a lot of the competitive pressure for the cable operators, both Charter and Comcast, and they are losing subscribers, and they're losing subscribers at an accelerating pace, and that is what is really spooking investors today.
So we have Charter CEO Chris Winfrey saying that the company has been fighting back with streaming service editions and noted that the new tax legislation will save the company several billion dollars in cash taxes in the next five or so years. Do you think that's their next lifefest?
So one thing, yes, I think that definitely helps on the margin, but it's really not doing a whole lot for you know, the stock today. But yes, bonus depreciation, you know, one hundred percent bonus depreciation is something that will help boost cash taxes and ultimately help boost capital spending. And I think that is the whole you know, idea behind having this this tax incentive to kind of boost capital spending all across. So yes, we will see some
uplift from there. But as of right now, I think what Chotter is really going to have to focus on is about a month ago, or maybe just over two months ago, they announced a deal with Cox Communications. It's a thirty five billion dollar deal which actually will make them the largest broadband operator. And so I think what's going to happen at this point is a lot of focus is going to shift to that deal and how that can potentially help them stem losses a little bit,
kind of regain their footing a little bit financially. But as it stands right now, you know, things are looking pretty bleak for all of the cable operators and Charter also.
So that was with Charter, what about their their mobile Charter mobile offerings, Because I say that that got a little bit of a bump because there, I guess agreeing with Verizon for certain things. How is that working out for them?
Yeah?
So, you know, just like you know, you had the telecoms that that really are the incumbents, and wireless and cable that are the incumbents in broadband, we have both of them kind of crossing over into each other's territories. So you have Telecom now kind of crossing over into Cable's territory and kind of offering broadband service. And similarly, you have Cable kind of crossing over into telecom space
and offering wireless and mobile services. And they've actually made a pretty decent foray, I would say, into the wireless world. Charter actually has been extremely aggressive. So the one of the strategies that they're following is they're bundling their mobile service along with their broad in order to actually stem the subscriber laws. So as long as we're within the Charter footprint, you can get a mobile line at a
significant discount. It is helping on the margin, but again, as we are seeing today, not really enough to move the needle.
I want to talk about another big development happening in the media space. We have FCC Chair Brendan Carr saying that he was pleased by Skydance commitments when it comes to the concessions, How significant are these concessions for regulatory president when it comes to future media mergers, and I'm talking about this Guidance and Paramount deal.
Yeah, So I think the FCC, this FCC was definitely expected to be much more you know, m and a friendly. So we're kind of expecting this whole wave of deregulation to happen with a broadcast. But for Skydance and Paramount in particular, you know, you had that big CBS News lawsuit that was kind of pending. There were the DEI issues that you kind of just mentioned before the segment. So all of those concessions I think really kind of
helped get the deal. We know that the Listen family also met with the FCC, they met with President Trump to kind of get the regulatory approval for you know, this deal, And I think at the end of the day, that kind of does signal that as long as you know you're willing to work with the FCC and the administration, I think a lot of the media deals can potentially get done.
All right, keitha.
Ron and Nathan, thank you so much for your time. She's Bloomberg Intelligence analyst. On US media.
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All right, So the turnaround efforts Intel, his new CEO, they're under question the latest earnings report. That's the reason why. Here to explain more about it is Kun John Sabani. He's Bloomberg Intelligence Senior Semiconductor analyst, Kun John. If you can explain to us, there's some concern that the new CEO he's a little bit more focused on hutting costs than making the company more competitive. I mean, is he or what's leading to those thoughts?
I don't think it's.
As clear as we staid it. You know, the results were a missed bag. The new CEO is definitely taking some steps in the right direction, aka cutting costs, which was necessary for this company, turning around the culture, focusing on making things simpler, and focusing on the core assets
as he's divesting the non core assets. The issue here is that we have investors had been promised a lot from the previous CEO, right which is still on their mind, namely that the foundry business, that the eighteen A was going to be the key node where Intel would get external customers and start getting a lot of external foundry revenues.
From what we heard last night, it seems.
That goalpost is sort of moving farther out now to fourteen A. So that was a disappointing fact that investors will now need to wait quite a few years before we can start seeing billions of dollars of external customers bringing in foundary revenue.
Despite the turn to AI and foundry services, Intel continues to lag behind Nvidia in AMD. So what signs show that Intel is closing that gap in AI leadership or foundry relevance in the second half of the year.
Well, there are no signs as of this point. Right. They are changing. It's clear they've lost out on the AI race.
They are changing the way they think about AI under the new CEO, but that will take time.
You cannot just close the three year gap suddenly in a second half. So we don't have any tackers right now.
We have to wait I think sort of in the second year they might announce what their strategy is and it's not clear what the timing of that closing of the gap will be.
And you mentioned the new CEO, so how is his approach different from former CEO Pat Gelsinger.
Well, it's like two complete opposites, right.
The priors was very aggressive, like to put you know, goalposts at the stars, so at least you get the moon and really promise and try to aggressively achieve it, which didn't happen on all metrics Limbutan is very practical and very conservative, right, so which we saw from the results last quarter. They had given a very conservative guide which helped them to get some breather and finally deliver a good beat both on the print and the guide.
But that's a two very different approaches. A clear example here is you know, on.
The LIBU they've decided that they're not going to aggressively promise that they are going to have external customers right away on eighteen A. They will first make that node work internally, get it to better heels, and then market it to customers, which, if you ask me, it's a very right and practical way to go.
About this versus the prior CEO.
It was like before even the process was ready, promising in the investors, promising the customers that this is what we are going to give to you and get external revenues.
And we know that Intel has canceled or delayed major factory projects in Germany, Poland and even Ohio. What impact does that have when it comes to their ability to meet future AI chip demands or like how credible are the timelines for those as well?
Yeah, given the timeline of the nodes that I spoke about, I don't we don't think. We think this is a good move because it helps them with near term liquidity and free cash flow and keeps them still it still makes them be flexible that if external customers do come suddenly to them and have a lot of demand for these nodes, they still have the flexibility to start ramping up in a given amount of time. So this is actually a good move in our regards.
So they had a resurgence in the PC industry manufacturers kind of build up this inventory before the tariffs hit. Has that slowed just a bit?
We definitely see that signs, you know, if you look at that typical seasonality the first half results that they're delivered in the PC where above seasonal. That suggests that there was some credit fear driven pull in and now that the terriff risks have sort of calmed down since the April first we are the guide that they provided implies a sub seasonal below seasonal second half, which suggests that the customers which bought those inventories are sort of
now slowing down. So they did see the benefit of that in first half, but now they are going to see the opposite side of that in the second half.
And Intelli's cutting around fifteen percent of its core workforce. We have reported that do you think that will have operational impacts? Because when you cut headford that will affect obviously some product developments and all that.
It's a difficult situation to be in. You know, from an investor perspective, we like this move. You know, if you look at Intel and compare it to most of it others compute players, they definitely have significantly high head counter revenue that they're bringing in, so there was definitely a headcount reduction needed. The management layer had become one of the most bloated management hierarchy s. Tax when you compare this in the industry, so this was definitely needed.
But yes, you're right, when you're going through headcom cuts, the morale does get impacted, right, And it's also difficult to now attract and keep the best talent that you have, which they are trying to do to sort of bring up their AI competence again and close that gap.
Good Jenna, So how does Intel move forward from today's results?
I think it will be a hard few years for them, but they need to keep doing what they have been
doing in the last two quarters. We like the direction that Libu is taking, you know, slowly, if he continues to stay consistent on his communication, on his conservative path, slowly and surely and as the longest keep delivering on those eighteen A milestones and getting up the yields slowly and slowly, Investors will get used to this new way of looking at Intel, sort of underpromising and over delivering, and that should help them in the long run.
But it's definitely going to be a long, hard path ahead.
All right, we'll be watching. Thank you kuon John. That was Koon JOm So. Bonnie Bloomberg Intelligence senior semiconductor analyst.
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We want to go to stocks. We have Puma shares. They've really been taken a hit. The reason behind it, that's what we want to find out. So we want to go to someone who knows it. It's Poom Goyel. She's senior US e commerce and retail analysts at Bloomberg Intelligence. Poohum, So, explain the issue. I mean, is it just tariffs? Is that the issue for Puma.
No, it's not just tariffs. It's a lot more than tariffs. So there's multiple things going on here. The first that probably applies to everyone, has four x issues, so there's four x pressure. The second ist tariffs, which is about a eighty five million dollars impact for twenty twenty five. And the third is wholesale weakness. And the wholesale weakness is a Puma specific issue, and I think that's really the biggest here. They've been challenged over the past few months.
We've seen them, you know, sales kind of accelerate, especially in North America, and they have lost momentum and that just completely was evident in two Q results and the fact that they had to cut guidance. They were expecting a load to mid single digit increase in twenty twenty five four revenues that is now expected to be down low double digits. So a big, big shift here, and I think it's largely demand driven.
Yes, and it's low double digit revenue drop as you pointed out. So then how credible is it proposed turnaround timeline given in twenty twenty six as they transition through the year.
Yeah, so a turnaround, you know, we need to know what they'll do. They have a new CEO in place. He is expected to provide some direction on that at the end of October. So between now and October, he's learning, he's trying to figure out the turnaround. At best, twenty twenty five will be a reset year and twenty twenty six a transition year. So there's a lot to be done here. I think the one thing that they can work on in two ages inventories. Inventories on a constant
currency basis, we're up about nineteen percent. That's clearly significantly higher than the two percent decline we saw in sales for the second quarter, So a big gap there. They need to work that down. That's probably priority number one and something they can tackle. As far as figuring out how to rebalance a portfolio between wholesale and digital and how to really reignite demand, I think that's a longer term push and we need to hear more on that, all.
Right, Pam. I also want to ask you about Amazon, because they gave shoppers a little bit more time, right, it was four days instead of the two days, and a lot of Hello shoppers went to Walmart too, So did that actually help give Walmart a little bit of a boost at the same time.
Yeah, So Amazon Prime Day went from two days to four days this year. Around Amazon Prime Day every year for the past two years, other retailers have added their own sales events that have been longer in duration. What we learned from alternative data at Bloomberg, which is some of the second measure data, there are two things. One, Amazon sales over Prime Day, when adjusted for the four
day period for both years, were up four percent. That's relatively in line with where they have been in previous Prime Day years. Amid singlegic gain, Walmart sales in that same time period did grow more, but you have to remember that you're comparing apples and oranges here. Amazon has a GMB of over seven hundred billion dollars based on our estimates, Walmart's over one hundred billion dollars. Walmart's younger when it comes to the e commerce push and therefore
growth rates are here. Did customers move to Walmart because Amazon gave them longer duration? Some? Yes, But the second measure data clearly shows that ninety one percent of shoppers that shopped Amazon shopped one retailer over Prime Day, so there was an increase to Walmart. I went from four percent to eight percent of Amazon shoppers are shopped Prime Day, but the bulk are still loyal to Amazon in our view.
That's what I was thinking. Whether this is a shift in consumer sentiment or a shift in consumer loyalty, or just really better discount or timing on Walmart's part. But it did show that Walmart can be quite a formidable arrival to Prime Day.
Yes, absolutely they can. They absolutely can be, and they are because the one retailer that can compete on price and also make investments to support their logistics platform. As Walmart, they have the deep pockets and they have the scale to compete with Amazon. But that said, Amazon's Prime members are very loyal. We saw that in the survey and ahead of Prime Day, where when asked where you're planning
to shop, Amazon remain top of mind. People who wanted to shine up sign up for Amazon wanted to stick with the subscription even after the Prime Day deals. So we do think there is a lot of loyalty there too.
Now the same a token Amazon going longer to four days, I mean in the last minut or so we have left. Was it because they could get more ad revenue out of it too? I mean, was that kind of the thought behind it?
I mean, that's definitely a plus. Was it part of it? Sure? But I think it was really just to strategically implement deals by category through the days and the hours within the days, so others were doing it for a week. I mean, if Walmart goes from two to four days, it's you know, it's not that big of a deal.
All right, Thank you so much putting on that. I was putt them Goyle, senior US e commerce and retail analysts at Bloomberg Intelligence.
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So earnings, after two quarters losses in a row, we had Phillip sixty six report a beat on second quarter at just at EPs. We want to dig deeper into these details.
So who better to do that.
Let's bring in Brett Gibbs, these Bloomberg Intelligence Refining and renewable fuels analysts. Brett, thank you for joining us here from DC. Refining has been this noticeable laggard, I mean, was it in these results?
Yeah, thanks for having me first off, and I think it's been a noticeable laggard for Philips sixty six specifically, and this was a clear quarter of strength for them. One of the things too, that stood out to us was just their refining utilization up about you know, kind of ninety eight percent, and then their capture of what we in the industry look at for benchmark margins for what you can see on your screen for gasoline and
diesel prices was ninety eight percent. So this was very very strong, and similarly on the unit costs side, part because they ran so well, they fail below their operating cost target for you know, the first time they were under that five dollars and fifty cents a gallon of what they use as adjustable controllable costs, and so that led to the beat broadly, and now we're kind of looking to see if that strength persists here in three Q. Again, there's there's still a lot of work to be done
on the refining side relative to where management set out kind of their mid cycle expectations of five billion dollars of annualized EBIDA. But again, this is a great start.
How sustainable are these performance tailwinds moving forward? You said you're going to look at in the next quarters. I'm wondering if they are structural, one off or cyclical.
Yeah, no, absolutely, I mean we're fining itself as cyclical industry. And typically two Q and three Q are the seasonal strengths. Just you have driving season here in the US, so that was something that obviously was a tailwind in two Q. We also have a developing diesel story globally that has been a little bit of a strength. We've seen it start with the Iran related disputes. We also see some European sanctions on Russian oil products and oil broadly, and
that's tightened up the diesel side. That had led to a pretty strong export poll out of the Gulf Coast. We saw that in Phillip sixty six is results this morning. The Gulf Coast was a particular region of strength. I think there is some durability there, but again the thought is maybe some of that strength is behind us. The stock is down today. Fellow Pierre Valero again had a pretty strong set of results yesterday. The stock was down on that and I think that part of the story
we're so is the gasoline strength is unwinding. We had recent US government data reports this past Wednesday gasoline demand is low seasonal levels in the US and that's something that might counter that diesel story, specifically if some of that recent strength on the lines.
There's been a few changes to their board, but in May Channel there's a like the two monominees of Elliott Management to serve how's that pending out?
Yeah, I mean back in May, the fact that the shareholders voted for a split on some of Elliott's proposals, so two of Elliot's nominees were elected to the board. It kind of was a little bit of an affirmation of management's kind of growth trajectory and plan to twenty twenty seven. And I think in this results you kind of, you know, management notched a little bit of a feather in their cap there in some respects because you're seeing Refining kind of move towards where you know they want
it to be. This wasbviously a very very solid quarter and that's been the point of contention, So a lot of work to be done, but working there. And then you know, one of the other things too was Elliott was calling for a big breakup of the company. They were focusing on spinning out midstream, They were focusing on
potentially selling their stake in CPKEM. Chemical earnings were particularly weak in this cycle, this earning cycle, and this is something too that management has come out quite frankly and said, we don't know if in this chemical margin environment it would be the right time to sell. They also have two large projects slated to come online in twenty twenty seven, and so I think this does kind of affirm some of the points that management was trying to push. But
again there's a lot of work to be done. I think management got themselves cornered a little bit year ago or in the past, where they had all these series of targets that became very difficult, whether it was you know, hitting a certain leverage target, whether it was continuing to advance midstream growth, whether it was getting refining to these levels.
So they still certainly have their work cut out for them, but I think this is a you know, progress is being made and that's you know, kind of a supporting factor to what shareholders voted for in May.
All right, Brett Gibbs, always appreciate your time at these Bloomberg Intelligence Refining and Renewable Fuels analysts.
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