Meta’s earnings, Barbie sales, and SBF’s testimony

Hello Folks,

Happy Thursday! Here’s what’s lined up for today.

👉 Meta beats revenue and earnings estimates

👉 Barbie drives sales for Mattel

👉 The SBF testimony

So, let’s get into it.

Meta doubles Q3 net income

The world’s largest social media company, Meta Platforms, increased revenue by 23% to $34.15 billion and more than doubled earnings to $4.39 per share in Q3. Analysts forecast Meta to report revenue of $33.56 billion and earnings of $3.63 in the September quarter.

Meta’s sales growth was the highest for the company since 2021 after it reported a revenue decline for three consecutive quarters in 2022. While enterprise spending remains soft, Meta has outpaced the ad sales of other companies such as Alphabet and Snap.

Meta emphasized its big bet on AI (artificial intelligence) has resulted in better ad promotions for marketers and increased user engagement. The big tech company continues to reduce costs and widen the bottom line. It reduced employee count by 24% and operating expenses by 7% in the last 12 months.

Meta shares are currently up 150% in 2023, making it the second best performing stock on the S&P 500.

The Barbie Boost

Barbie is the highest-grossing film of 2023, raking in more than $1.4 billion worldwide. The movie is now a global phenomenon, allowing its parent company, Mattel, to report sales of $1.92 billion and earnings of $1.08 per share in Q3.

Wall Street forecasted Q3 revenue at $1.84 billion and earnings at $0.86 per share for Mattel.

Barbie sales were up 16% compared to the year-ago period and might inspire Mattel to widen its strategy of using intellectual properties and turn them into blockbuster movies (hopefully!).

Commercial real estate is under pressure

Commercial real estate markets in the two largest economies (U.S. and China) are under pressure, according to Singapore’s United Overseas Bank. Vacancy rates climbed to a record high of 18.2% at the end of 2022.

China’s property market, which accounts for a significant portion of the country’s GDP, is under the pump as major developers such as Evergrande and Country Garden are reeling under mounting debts and rising interest payments.

Sam Bankman-Fried to testify today

Lawyers for Sam Bankman-Fried revealed details of his planned testimony if he takes the witness stand at his FTX fraud trial.

Bankman-Fried’s legal team told Judge Lewis Kaplan in a six-page letter that he would address three key areas in such testimony, including suggesting that he relied on FTX’s former legal team in allowing some actions that later led to the implosion and bankruptcy of the cryptocurrency exchange.

SBF faces seven criminal counts, including wire fraud, money laundering, and securities fraud, that could land him in prison for more than 100 years if he is convicted at the trial in Manhattan.

Headlines You Can’t Miss!

Mercedes-Benz stock falls 6% as profits decline in Q3

Stellantis to invest $1.6 billion in China-based EV startup

Ford, UAW reach tentative deal to end labor strike

The NBA is expanding its global reach

Bitcoin might touch $45k in November

Chart of the Day

It’s been a rocky year for metal. Lithium prices have slid by nearly 70%, nickel prices have tumbled by 40%, and cobalt prices have been stuck just above their all-time lows.

Much of the fall in these key battery metals has been driven by a surge in supply at a time when demand for fully electric cars in China (i.e. the world’s biggest EV market) is slowing. Sales rose by 100% in the first nine months of 2022 over the same period the previous year, but that growth slowed to just 25% this year.

Meanwhile, sales of consumer electronics in China are on track for a second consecutive year of double-digit percentage drops. According to consultancy CRU Group, the lithium, nickel, and cobalt markets are expected to be oversupplied until 2028.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell assets or make financial decisions. Please be careful and do your own research.