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Intel CEO Pat Gelsinger (I-Hwa CHENG/AFP)

So bad, it’s good

Wall Street embraces Intel’s tentative turnaround

Shares went up as much as 8% on Friday, even as the company posted its biggest quarterly loss on record.

11/1/24 1:00PM

Intel finally had its one step forward after three steps back over the past few months. Shares climbed as much as 8% on Friday, after the company reported better-than-expected third-quarter earnings and fourth-quarter guidance.

Despite the beat, so many of Intel’s headline numbers weren’t pretty on the surface: revenue declined 6% year over year. The company lost $16.99 billion, by far its biggest three-month dose of red ink ever, compared with net earnings of $310 million a year ago. The stock has tumbled more than 50% so far this year.

We previously wrote about how Intel missed the memo about the chip boom after a long history of management missteps. Lackluster earnings from last quarter propelled the stock to plunge nearly 30%, logging its biggest one-day drop in almost 50 years. The company was then under pressure to defend itself from private-equity firms and competitors that were eyeing a takeover, such as Apollo and Qualcomm, respectively. In August, the company committed to delivering a $10 billion cost reduction plan in 2025.

Some of those cost-reduction activities were already underway. In the latest quarter, Intel recognized $2.8 billion in restructuring charges and $15.9 billion in impairment charges, the big cause of all those losses. An earlier filing revealed a slew of approved activities, including reducing the head count by 16,500 employees and real-estate exits.

Intel CEO Pat Gelsinger alluded to early progress in its effort to manufacture chips for other companies, including an Amazon partnership, as sources for more external funding. The company also revealed plans to turn its foundry business into an independent subsidiary; this way, the design and manufacturing of the chips are separated, potentially driving more interest from outside customers like competing chip designers who were previously hesitant about using Intel’s foundry.

Still, there were doubts about whether the foundry business can stand on its own due to the capital-intensive nature, The New York Times reported. In the latest quarter, the foundry business saw revenue drop 8%. Other challenges, including the lack of a competitive AI accelerator product compared to rivals like AMD, will continue to dampen Intel’s future prospects, Bank of America analysts said in a note.

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Electronic Arts launches a platform to put more ads in its games

Video game publishing giant EA launched a new platform on Monday designed to make the process of selling immersive ad space in its popular games easier.

The company says the platform, called EA Advertising, allows brands to “integrate directly into gameplay through dynamic, real-time placements, from stadium signage to custom in-game content.”

More so than other studios, EA has incorporated advertising into its most popular titles. As Kotaku points out, the company’s ad efforts stretch as far back as 2006. Several of its sports franchises already feature partnerships with brands like Visa, Lowe’s, Red Bull, and PepsiCo.

In-game advertising hasn’t exactly been embraced by fans, but industry experts expect it to ramp up as companies seek more revenue to offset higher games budgets and surging memory costs. EA rival Take-Two has taken a different approach, with CEO Strauss Zelnick recently saying the company was “not at risk of doing brand partnerships” in the forthcoming “Grand Theft Auto VI,” and that ads in full-price games seems “unfair.”

The $55 billion deal to take EA private, led by Saudi Arabia’s Public Investment Fund, is set to close at the end of this month. Being the largest leveraged buyout in history, EA will likely look for more ways to boost revenue to cover interest payments.

Electronic Arts Makes Push for Ad Dollars Tied to Sports

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JM Smucker says it sold $1 billion worth of Uncrustables in FY2026

After years of booming sandwich sales, JM Smucker has finally earned a billion-dollar crust.

On Tuesday, the company reported results for fiscal year 2026, highlighting better-than-expected profits driven by higher prices for coffee and sweet baked goods. However, at another point on the earnings call, CEO Mark Smucker pointed to one particularly jammy figure: in line with previous forecasts, the company sold $1 billion worth of its (almost always) crustless sandwiches, Uncrustables, in the last year alone.

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Paramount reportedly offers concessions to resolve multistate antitrust investigation

Paramount has reportedly offered up some concessions in an effort to prevent an antitrust lawsuit by California and about 10 other states, according to Bloomberg reporting on Monday.

Reuters first reported on the potential suit from a group of unnamed states last week, which could throw a wrench in Paramount’s plans to buy rival Warner Bros. Discovery in a Hollywood megamerger.

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

Paramount Offers Concessions to Head Off State Antitrust Lawsuit

The list of concessions is unknown, though Bloomberg previously reported that Paramount is open to divesting some of its kids TV assets to appease EU regulators.

Late last month, reports said US regulators appeared likely to approve the $110 billion merger, following a meeting between Paramount CEO David Ellison and DOJ antitrust staffers.

$98B ⛽

Max Knoblauch6/8/26

The IATA released its latest financial outlook for the airline industry over the weekend, forecasting a $98 billion jump in the sector’s collective fuel bill. The world’s largest trade group representing airlines expects the oil spike to halve profits by 49% from last year to $23 billion.

The group also expects profit margins to halve year over year, falling from 2025’s 4.2% to 2%. Still, revenue is expected to climb to $1.17 trillion from $1.07 trillion.

A surge in the cost of jet fuel has rocked US and global airlines this year, leading Delta Air Lines, United Airlines, American Airlines, Southwest Airlines, JetBlue, and others to raise fares and ancillary charges like bag fees. Low-cost carriers, which operate on smaller margins, have been squeezed the hardest, resulting in Spirit’s shutdown.

“It’s a tough year for all airlines, especially those whose balance sheets had not yet recovered from COVID. And, of course, for those operating in the Gulf,” said IATA Director General Willie Walsh, who added that demand is holding up and about half of passengers expect to spend more on travel this year. “That bodes well for a strong northern summer peak season. The big unknown is how long travelers and shippers can tolerate the higher costs of connectivity.”

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