Brutal temps and AI data centers have cooling companies hot as hell

The AC drippeth upward.

7/31/24 4:05PM

More than 150 million Americans were under heat alerts this month. Last week, Earth broke the all-time heat record on back-to-back days. Suffice to say: it's hot out, in case you hadn't noticed.

While that’s brutal for, you know, living things, the scorching temps have HVAC businesses and other companies that sell cooling tech running on high.

Trane, which beat estimates when it reported earnings today, saw revenue rise 13% from a year earlier. Its shares are up about 40% this year so far. Shares of its rival Lennox International are up 32% in the same time. Larger companies that dabble in cooling have benefited, too: about a quarter of LG Electronics' sales last year came from its HVAC business.

There’s another factor at play: AC units’ typical lifespans are about 15 to 20 years — meaning that thousands of units that were installed during the housing-market recovery after the 2008 recession are starting to go bad.

Also playing a role in cooling’s hot streak are AI data centers (which saw a 26% expansion last year) and crypto mining farms, both of which run extremely hot.

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JetBlue is raising its bag fees as fuel costs squeeze airlines

JetBlue will reportedly hike its bag fees, as the cost of jet fuel continues to climb amid the war in Iran. It’s the latest example of carriers finding ways to push rising costs onto travelers.

Last week, United Airlines CEO Scott Kirby said that if fuel prices remain elevated, fares would need to rise another 20% for his airline to break even this year.

As CNBC reported, when one airline raises fees, others tend to follow.

Earlier this month, JetBlue hiked its first-quarter outlook for operating revenue per seat mile to between 5% and 7%, saying that strong Q1 demand helped “partially offset additional expenses realized from operational disruptions and rising fuel costs.” Now, the carrier appears to be making moves to further boost revenue to offset those costs.

Earlier on Monday, JetBlue rival Alaska Air lowered its Q1 profit forecast. The refining margins for the carrier’s cheapest fuel option — sourced from Singapore and representing about 20% of Alaska’s overall supply — have spiked 400% since February.

JetBlue did not immediately respond to a request for comment.