1 00:00:02,720 --> 00:00:10,600 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,600 --> 00:00:14,560 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:14,640 --> 00:00:18,560 Speaker 1: Eastern on Applecarplay and Android Auto with the Bloomberg Business App. 4 00:00:18,640 --> 00:00:21,920 Speaker 1: Listen on demand wherever you get your podcasts, or watch 5 00:00:21,960 --> 00:00:23,120 Speaker 1: us live on YouTube. 6 00:00:23,480 --> 00:00:28,640 Speaker 2: One of those thoughts under pressure is actually Charter. Oh no, oh, 7 00:00:28,640 --> 00:00:30,640 Speaker 2: we're not going into that. Yes, are we going to? 8 00:00:30,920 --> 00:00:31,080 Speaker 3: Oh? 9 00:00:31,120 --> 00:00:34,320 Speaker 2: We both are, okay, So Keitha, there we go. We 10 00:00:34,360 --> 00:00:37,360 Speaker 2: are going to Githa. Keetha wrong an Avis. She's Bloomberg 11 00:00:37,400 --> 00:00:40,520 Speaker 2: Intelligence analysts on the latest in the media space. So getha. 12 00:00:40,560 --> 00:00:42,720 Speaker 2: We were talking about Charter. So shared's really taken a 13 00:00:42,800 --> 00:00:46,360 Speaker 2: hit lost more Internet subscribers. If you can explain to us, 14 00:00:46,400 --> 00:00:48,479 Speaker 2: is it just a lot of pressure from these mobile 15 00:00:48,680 --> 00:00:51,640 Speaker 2: phone companies? Is that what it is? 16 00:00:51,360 --> 00:00:52,519 Speaker 3: It is exactly that. 17 00:00:52,600 --> 00:00:57,160 Speaker 4: So remember, you know, Charter controls about twenty eight percent 18 00:00:57,280 --> 00:01:02,200 Speaker 4: of the fixed broadband market. They have roughly nine million subscribers. 19 00:01:02,480 --> 00:01:05,240 Speaker 4: But what has happened over the past few years is 20 00:01:05,760 --> 00:01:08,360 Speaker 4: you know, the telecoms, so think about you know, AT 21 00:01:08,440 --> 00:01:12,000 Speaker 4: and T, Verizon, T Mobile. They've gotten really aggressive. So 22 00:01:12,040 --> 00:01:15,560 Speaker 4: of course we know that they are the top wireless providers. 23 00:01:15,880 --> 00:01:18,560 Speaker 4: But where they're competing now with the cable operators is 24 00:01:18,560 --> 00:01:21,720 Speaker 4: in fixed broadband, so your home internet connection for instance. Right, 25 00:01:22,200 --> 00:01:25,160 Speaker 4: So what they're doing is they're offering something called five 26 00:01:25,240 --> 00:01:28,440 Speaker 4: G home Internet, which is really cheap. It's just very 27 00:01:28,480 --> 00:01:31,280 Speaker 4: easy to hook up. It costs about fifty dollars a month, 28 00:01:31,720 --> 00:01:34,280 Speaker 4: and it's much cheaper than cable. And so people are 29 00:01:34,319 --> 00:01:37,199 Speaker 4: really saying, you know what, this is great. I don't 30 00:01:37,200 --> 00:01:40,320 Speaker 4: have to deal with, you know, the endless heartache that 31 00:01:40,720 --> 00:01:43,880 Speaker 4: everybody usually has with their cable company. Plus it's cheaper. 32 00:01:44,360 --> 00:01:46,080 Speaker 4: And so that's where we're seeing a lot of the 33 00:01:46,120 --> 00:01:49,880 Speaker 4: competitive pressure for the cable operators, both Charter and Comcast, 34 00:01:50,800 --> 00:01:53,600 Speaker 4: and they are losing subscribers, and they're losing subscribers at 35 00:01:53,600 --> 00:01:56,720 Speaker 4: an accelerating pace, and that is what is really spooking 36 00:01:56,720 --> 00:01:57,520 Speaker 4: investors today. 37 00:01:58,360 --> 00:02:01,120 Speaker 5: So we have Charter CEO Chris Winfrey saying that the 38 00:02:01,160 --> 00:02:04,120 Speaker 5: company has been fighting back with streaming service editions and 39 00:02:04,200 --> 00:02:06,880 Speaker 5: noted that the new tax legislation will save the company 40 00:02:07,120 --> 00:02:09,920 Speaker 5: several billion dollars in cash taxes in the next five 41 00:02:10,000 --> 00:02:12,200 Speaker 5: or so years. Do you think that's their next lifefest? 42 00:02:14,040 --> 00:02:16,720 Speaker 4: So one thing, yes, I think that definitely helps on 43 00:02:16,800 --> 00:02:19,040 Speaker 4: the margin, but it's really not doing a whole lot 44 00:02:19,080 --> 00:02:22,400 Speaker 4: for you know, the stock today. But yes, bonus depreciation, 45 00:02:22,680 --> 00:02:25,400 Speaker 4: you know, one hundred percent bonus depreciation is something that 46 00:02:25,480 --> 00:02:29,600 Speaker 4: will help boost cash taxes and ultimately help boost capital spending. 47 00:02:29,639 --> 00:02:32,520 Speaker 4: And I think that is the whole you know, idea 48 00:02:32,600 --> 00:02:35,600 Speaker 4: behind having this this tax incentive to kind of boost 49 00:02:35,800 --> 00:02:38,520 Speaker 4: capital spending all across. So yes, we will see some 50 00:02:38,639 --> 00:02:41,520 Speaker 4: uplift from there. But as of right now, I think 51 00:02:41,560 --> 00:02:43,560 Speaker 4: what Chotter is really going to have to focus on 52 00:02:43,760 --> 00:02:46,480 Speaker 4: is about a month ago, or maybe just over two 53 00:02:46,520 --> 00:02:50,640 Speaker 4: months ago, they announced a deal with Cox Communications. It's 54 00:02:50,639 --> 00:02:53,320 Speaker 4: a thirty five billion dollar deal which actually will make 55 00:02:53,400 --> 00:02:56,919 Speaker 4: them the largest broadband operator. And so I think what's 56 00:02:56,960 --> 00:02:58,519 Speaker 4: going to happen at this point is a lot of 57 00:02:58,560 --> 00:03:01,160 Speaker 4: focus is going to shift to that deal and how 58 00:03:01,200 --> 00:03:04,639 Speaker 4: that can potentially help them stem losses a little bit, 59 00:03:04,760 --> 00:03:07,800 Speaker 4: kind of regain their footing a little bit financially. But 60 00:03:07,880 --> 00:03:10,480 Speaker 4: as it stands right now, you know, things are looking 61 00:03:10,520 --> 00:03:14,440 Speaker 4: pretty bleak for all of the cable operators and Charter also. 62 00:03:14,760 --> 00:03:17,880 Speaker 2: So that was with Charter, what about their their mobile 63 00:03:18,360 --> 00:03:20,600 Speaker 2: Charter mobile offerings, Because I say that that got a 64 00:03:20,639 --> 00:03:22,960 Speaker 2: little bit of a bump because there, I guess agreeing 65 00:03:22,960 --> 00:03:25,880 Speaker 2: with Verizon for certain things. How is that working out 66 00:03:25,880 --> 00:03:26,160 Speaker 2: for them? 67 00:03:27,080 --> 00:03:27,280 Speaker 1: Yeah? 68 00:03:27,320 --> 00:03:29,720 Speaker 4: So, you know, just like you know, you had the 69 00:03:29,720 --> 00:03:32,360 Speaker 4: telecoms that that really are the incumbents, and wireless and 70 00:03:32,400 --> 00:03:35,080 Speaker 4: cable that are the incumbents in broadband, we have both 71 00:03:35,120 --> 00:03:37,360 Speaker 4: of them kind of crossing over into each other's territories. 72 00:03:37,600 --> 00:03:39,680 Speaker 4: So you have Telecom now kind of crossing over into 73 00:03:39,720 --> 00:03:43,120 Speaker 4: Cable's territory and kind of offering broadband service. And similarly, 74 00:03:43,160 --> 00:03:45,720 Speaker 4: you have Cable kind of crossing over into telecom space 75 00:03:45,760 --> 00:03:49,320 Speaker 4: and offering wireless and mobile services. And they've actually made 76 00:03:49,440 --> 00:03:52,640 Speaker 4: a pretty decent foray, I would say, into the wireless world. 77 00:03:53,000 --> 00:03:55,400 Speaker 4: Charter actually has been extremely aggressive. So the one of 78 00:03:55,400 --> 00:03:58,600 Speaker 4: the strategies that they're following is they're bundling their mobile 79 00:03:58,640 --> 00:04:01,720 Speaker 4: service along with their broad in order to actually stem 80 00:04:01,720 --> 00:04:04,080 Speaker 4: the subscriber laws. So as long as we're within the 81 00:04:04,120 --> 00:04:06,240 Speaker 4: Charter footprint, you can get a mobile line at a 82 00:04:06,280 --> 00:04:09,440 Speaker 4: significant discount. It is helping on the margin, but again, 83 00:04:09,440 --> 00:04:12,320 Speaker 4: as we are seeing today, not really enough to move 84 00:04:12,400 --> 00:04:12,880 Speaker 4: the needle. 85 00:04:13,600 --> 00:04:15,720 Speaker 5: I want to talk about another big development happening in 86 00:04:15,720 --> 00:04:18,479 Speaker 5: the media space. We have FCC Chair Brendan Carr saying 87 00:04:18,480 --> 00:04:21,640 Speaker 5: that he was pleased by Skydance commitments when it comes 88 00:04:21,680 --> 00:04:26,400 Speaker 5: to the concessions, How significant are these concessions for regulatory 89 00:04:26,480 --> 00:04:29,520 Speaker 5: president when it comes to future media mergers, and I'm 90 00:04:29,520 --> 00:04:31,480 Speaker 5: talking about this Guidance and Paramount deal. 91 00:04:33,240 --> 00:04:36,200 Speaker 4: Yeah, So I think the FCC, this FCC was definitely 92 00:04:36,320 --> 00:04:39,360 Speaker 4: expected to be much more you know, m and a friendly. 93 00:04:39,760 --> 00:04:42,240 Speaker 4: So we're kind of expecting this whole wave of deregulation 94 00:04:42,360 --> 00:04:46,760 Speaker 4: to happen with a broadcast. But for Skydance and Paramount 95 00:04:46,760 --> 00:04:50,000 Speaker 4: in particular, you know, you had that big CBS News 96 00:04:50,120 --> 00:04:52,479 Speaker 4: lawsuit that was kind of pending. There were the DEI 97 00:04:52,640 --> 00:04:54,920 Speaker 4: issues that you kind of just mentioned before the segment. 98 00:04:55,279 --> 00:04:57,560 Speaker 4: So all of those concessions I think really kind of 99 00:04:57,760 --> 00:05:00,840 Speaker 4: helped get the deal. We know that the Listen family 100 00:05:00,920 --> 00:05:03,840 Speaker 4: also met with the FCC, they met with President Trump 101 00:05:04,120 --> 00:05:07,320 Speaker 4: to kind of get the regulatory approval for you know, 102 00:05:07,400 --> 00:05:08,880 Speaker 4: this deal, And I think at the end of the day, 103 00:05:09,240 --> 00:05:11,800 Speaker 4: that kind of does signal that as long as you 104 00:05:11,839 --> 00:05:16,360 Speaker 4: know you're willing to work with the FCC and the administration, 105 00:05:16,680 --> 00:05:19,400 Speaker 4: I think a lot of the media deals can potentially 106 00:05:19,440 --> 00:05:20,120 Speaker 4: get done. 107 00:05:20,279 --> 00:05:20,960 Speaker 6: All right, keitha. 108 00:05:21,000 --> 00:05:22,480 Speaker 2: Ron and Nathan, thank you so much for your time. 109 00:05:22,520 --> 00:05:26,080 Speaker 2: She's Bloomberg Intelligence analyst. On US media. 110 00:05:27,640 --> 00:05:31,320 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 111 00:05:31,400 --> 00:05:34,520 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 112 00:05:34,520 --> 00:05:37,839 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 113 00:05:37,880 --> 00:05:41,000 Speaker 1: you get your podcasts, or watch us live on YouTube. 114 00:05:41,440 --> 00:05:44,200 Speaker 2: All right, So the turnaround efforts Intel, his new CEO, 115 00:05:44,360 --> 00:05:47,920 Speaker 2: they're under question the latest earnings report. That's the reason why. 116 00:05:48,040 --> 00:05:50,839 Speaker 2: Here to explain more about it is Kun John Sabani. 117 00:05:51,240 --> 00:05:55,719 Speaker 2: He's Bloomberg Intelligence Senior Semiconductor analyst, Kun John. If you 118 00:05:55,760 --> 00:05:57,880 Speaker 2: can explain to us, there's some concern that the new 119 00:05:57,960 --> 00:06:00,839 Speaker 2: CEO he's a little bit more focused on hutting costs 120 00:06:01,240 --> 00:06:04,479 Speaker 2: than making the company more competitive. I mean, is he 121 00:06:04,960 --> 00:06:06,600 Speaker 2: or what's leading to those thoughts? 122 00:06:08,040 --> 00:06:08,800 Speaker 7: I don't think it's. 123 00:06:08,680 --> 00:06:11,600 Speaker 6: As clear as we staid it. You know, the results 124 00:06:11,600 --> 00:06:14,719 Speaker 6: were a missed bag. The new CEO is definitely taking 125 00:06:14,760 --> 00:06:18,040 Speaker 6: some steps in the right direction, aka cutting costs, which 126 00:06:18,160 --> 00:06:22,359 Speaker 6: was necessary for this company, turning around the culture, focusing 127 00:06:22,400 --> 00:06:25,479 Speaker 6: on making things simpler, and focusing on the core assets 128 00:06:25,880 --> 00:06:28,880 Speaker 6: as he's divesting the non core assets. The issue here 129 00:06:29,000 --> 00:06:32,120 Speaker 6: is that we have investors had been promised a lot 130 00:06:32,160 --> 00:06:34,920 Speaker 6: from the previous CEO, right which is still on their mind, 131 00:06:35,000 --> 00:06:38,359 Speaker 6: namely that the foundry business, that the eighteen A was 132 00:06:38,400 --> 00:06:42,679 Speaker 6: going to be the key node where Intel would get 133 00:06:42,800 --> 00:06:46,719 Speaker 6: external customers and start getting a lot of external foundry revenues. 134 00:06:47,240 --> 00:06:49,840 Speaker 7: From what we heard last night, it seems. 135 00:06:49,520 --> 00:06:52,320 Speaker 6: That goalpost is sort of moving farther out now to 136 00:06:52,400 --> 00:06:56,000 Speaker 6: fourteen A. So that was a disappointing fact that investors 137 00:06:56,000 --> 00:06:58,360 Speaker 6: will now need to wait quite a few years before 138 00:06:58,400 --> 00:07:01,960 Speaker 6: we can start seeing billions of dollars of external customers 139 00:07:02,000 --> 00:07:03,239 Speaker 6: bringing in foundary revenue. 140 00:07:05,520 --> 00:07:08,880 Speaker 5: Despite the turn to AI and foundry services, Intel continues 141 00:07:08,920 --> 00:07:11,920 Speaker 5: to lag behind Nvidia in AMD. So what signs show 142 00:07:11,960 --> 00:07:16,120 Speaker 5: that Intel is closing that gap in AI leadership or 143 00:07:16,200 --> 00:07:18,200 Speaker 5: foundry relevance in the second half of the year. 144 00:07:19,720 --> 00:07:22,640 Speaker 7: Well, there are no signs as of this point. Right. 145 00:07:22,680 --> 00:07:26,240 Speaker 7: They are changing. It's clear they've lost out on the 146 00:07:26,280 --> 00:07:26,880 Speaker 7: AI race. 147 00:07:27,440 --> 00:07:29,760 Speaker 6: They are changing the way they think about AI under 148 00:07:29,800 --> 00:07:32,760 Speaker 6: the new CEO, but that will take time. 149 00:07:32,880 --> 00:07:35,800 Speaker 7: You cannot just close the three year gap suddenly in 150 00:07:35,840 --> 00:07:39,040 Speaker 7: a second half. So we don't have any tackers right now. 151 00:07:39,040 --> 00:07:41,040 Speaker 6: We have to wait I think sort of in the 152 00:07:41,080 --> 00:07:44,120 Speaker 6: second year they might announce what their strategy is and 153 00:07:44,200 --> 00:07:46,560 Speaker 6: it's not clear what the timing of that closing of 154 00:07:46,560 --> 00:07:47,200 Speaker 6: the gap will be. 155 00:07:47,760 --> 00:07:50,080 Speaker 2: And you mentioned the new CEO, so how is his 156 00:07:50,160 --> 00:07:53,000 Speaker 2: approach different from former CEO Pat Gelsinger. 157 00:07:54,280 --> 00:07:56,400 Speaker 7: Well, it's like two complete opposites, right. 158 00:07:56,760 --> 00:08:01,160 Speaker 6: The priors was very aggressive, like to put you know, 159 00:08:01,360 --> 00:08:03,400 Speaker 6: goalposts at the stars, so at least you get the 160 00:08:03,440 --> 00:08:07,080 Speaker 6: moon and really promise and try to aggressively achieve it, 161 00:08:07,120 --> 00:08:11,040 Speaker 6: which didn't happen on all metrics Limbutan is very practical 162 00:08:11,120 --> 00:08:13,680 Speaker 6: and very conservative, right, so which we saw from the 163 00:08:13,720 --> 00:08:17,800 Speaker 6: results last quarter. They had given a very conservative guide 164 00:08:17,800 --> 00:08:20,920 Speaker 6: which helped them to get some breather and finally deliver 165 00:08:21,040 --> 00:08:23,600 Speaker 6: a good beat both on the print and the guide. 166 00:08:23,640 --> 00:08:26,880 Speaker 7: But that's a two very different approaches. A clear example 167 00:08:26,920 --> 00:08:28,280 Speaker 7: here is you know, on. 168 00:08:28,280 --> 00:08:31,280 Speaker 6: The LIBU they've decided that they're not going to aggressively 169 00:08:31,640 --> 00:08:34,560 Speaker 6: promise that they are going to have external customers right 170 00:08:34,600 --> 00:08:37,400 Speaker 6: away on eighteen A. They will first make that node 171 00:08:37,480 --> 00:08:40,839 Speaker 6: work internally, get it to better heels, and then market 172 00:08:40,880 --> 00:08:43,240 Speaker 6: it to customers, which, if you ask me, it's a 173 00:08:43,400 --> 00:08:45,200 Speaker 6: very right and practical way to go. 174 00:08:45,320 --> 00:08:47,439 Speaker 7: About this versus the prior CEO. 175 00:08:47,760 --> 00:08:51,160 Speaker 6: It was like before even the process was ready, promising 176 00:08:51,240 --> 00:08:53,600 Speaker 6: in the investors, promising the customers that this is what 177 00:08:53,679 --> 00:08:56,320 Speaker 6: we are going to give to you and get external revenues. 178 00:08:56,600 --> 00:08:59,079 Speaker 5: And we know that Intel has canceled or delayed major 179 00:08:59,120 --> 00:09:03,640 Speaker 5: factory projects in Germany, Poland and even Ohio. What impact 180 00:09:03,720 --> 00:09:07,080 Speaker 5: does that have when it comes to their ability to 181 00:09:07,080 --> 00:09:10,320 Speaker 5: meet future AI chip demands or like how credible are 182 00:09:10,320 --> 00:09:11,720 Speaker 5: the timelines for those as well? 183 00:09:13,280 --> 00:09:16,520 Speaker 6: Yeah, given the timeline of the nodes that I spoke about, 184 00:09:16,720 --> 00:09:18,720 Speaker 6: I don't we don't think. We think this is a 185 00:09:18,760 --> 00:09:21,680 Speaker 6: good move because it helps them with near term liquidity 186 00:09:21,679 --> 00:09:25,240 Speaker 6: and free cash flow and keeps them still it still 187 00:09:25,400 --> 00:09:29,680 Speaker 6: makes them be flexible that if external customers do come 188 00:09:29,880 --> 00:09:32,280 Speaker 6: suddenly to them and have a lot of demand for 189 00:09:32,360 --> 00:09:34,720 Speaker 6: these nodes, they still have the flexibility to start ramping 190 00:09:34,800 --> 00:09:36,960 Speaker 6: up in a given amount of time. So this is 191 00:09:37,000 --> 00:09:38,600 Speaker 6: actually a good move in our regards. 192 00:09:39,280 --> 00:09:42,080 Speaker 2: So they had a resurgence in the PC industry manufacturers 193 00:09:42,160 --> 00:09:45,120 Speaker 2: kind of build up this inventory before the tariffs hit. 194 00:09:45,559 --> 00:09:47,040 Speaker 2: Has that slowed just a bit? 195 00:09:48,800 --> 00:09:52,160 Speaker 6: We definitely see that signs, you know, if you look 196 00:09:52,160 --> 00:09:55,760 Speaker 6: at that typical seasonality the first half results that they're 197 00:09:55,800 --> 00:09:58,959 Speaker 6: delivered in the PC where above seasonal. That suggests that 198 00:09:59,000 --> 00:10:02,160 Speaker 6: there was some credit fear driven pull in and now 199 00:10:02,200 --> 00:10:04,920 Speaker 6: that the terriff risks have sort of calmed down since 200 00:10:04,920 --> 00:10:08,360 Speaker 6: the April first we are the guide that they provided 201 00:10:08,440 --> 00:10:12,480 Speaker 6: implies a sub seasonal below seasonal second half, which suggests 202 00:10:12,480 --> 00:10:15,960 Speaker 6: that the customers which bought those inventories are sort of 203 00:10:15,960 --> 00:10:18,520 Speaker 6: now slowing down. So they did see the benefit of 204 00:10:18,520 --> 00:10:20,480 Speaker 6: that in first half, but now they are going to 205 00:10:20,520 --> 00:10:22,600 Speaker 6: see the opposite side of that in the second half. 206 00:10:23,160 --> 00:10:26,080 Speaker 5: And Intelli's cutting around fifteen percent of its core workforce. 207 00:10:26,120 --> 00:10:28,719 Speaker 5: We have reported that do you think that will have 208 00:10:28,960 --> 00:10:33,200 Speaker 5: operational impacts? Because when you cut headford that will affect 209 00:10:33,520 --> 00:10:36,800 Speaker 5: obviously some product developments and all that. 210 00:10:37,480 --> 00:10:40,440 Speaker 6: It's a difficult situation to be in. You know, from 211 00:10:40,440 --> 00:10:45,040 Speaker 6: an investor perspective, we like this move. You know, if 212 00:10:45,080 --> 00:10:47,000 Speaker 6: you look at Intel and compare it to most of 213 00:10:47,040 --> 00:10:51,440 Speaker 6: it others compute players, they definitely have significantly high head 214 00:10:51,480 --> 00:10:54,880 Speaker 6: counter revenue that they're bringing in, so there was definitely 215 00:10:54,880 --> 00:10:58,520 Speaker 6: a headcount reduction needed. The management layer had become one 216 00:10:58,559 --> 00:11:01,680 Speaker 6: of the most bloated management hierarchy s. Tax when you 217 00:11:01,720 --> 00:11:04,600 Speaker 6: compare this in the industry, so this was definitely needed. 218 00:11:04,760 --> 00:11:07,480 Speaker 6: But yes, you're right, when you're going through headcom cuts, 219 00:11:07,520 --> 00:11:10,440 Speaker 6: the morale does get impacted, right, And it's also difficult 220 00:11:10,720 --> 00:11:13,840 Speaker 6: to now attract and keep the best talent that you have, 221 00:11:14,960 --> 00:11:17,000 Speaker 6: which they are trying to do to sort of bring 222 00:11:17,080 --> 00:11:19,439 Speaker 6: up their AI competence again and close that gap. 223 00:11:19,960 --> 00:11:24,080 Speaker 2: Good Jenna, So how does Intel move forward from today's results? 224 00:11:25,440 --> 00:11:29,480 Speaker 6: I think it will be a hard few years for them, 225 00:11:29,559 --> 00:11:32,480 Speaker 6: but they need to keep doing what they have been 226 00:11:32,480 --> 00:11:35,440 Speaker 6: doing in the last two quarters. We like the direction 227 00:11:35,559 --> 00:11:39,280 Speaker 6: that Libu is taking, you know, slowly, if he continues 228 00:11:39,320 --> 00:11:43,920 Speaker 6: to stay consistent on his communication, on his conservative path, 229 00:11:44,240 --> 00:11:47,160 Speaker 6: slowly and surely and as the longest keep delivering on 230 00:11:47,200 --> 00:11:50,440 Speaker 6: those eighteen A milestones and getting up the yields slowly 231 00:11:50,480 --> 00:11:53,200 Speaker 6: and slowly, Investors will get used to this new way 232 00:11:53,200 --> 00:11:57,520 Speaker 6: of looking at Intel, sort of underpromising and over delivering, 233 00:11:57,520 --> 00:11:59,360 Speaker 6: and that should help them in the long run. 234 00:11:59,400 --> 00:12:02,320 Speaker 7: But it's definitely going to be a long, hard path ahead. 235 00:12:02,559 --> 00:12:04,599 Speaker 2: All right, we'll be watching. Thank you kuon John. That 236 00:12:04,679 --> 00:12:09,160 Speaker 2: was Koon JOm So. Bonnie Bloomberg Intelligence senior semiconductor analyst. 237 00:12:11,160 --> 00:12:14,840 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 238 00:12:14,920 --> 00:12:18,040 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 239 00:12:18,040 --> 00:12:21,360 Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever 240 00:12:21,400 --> 00:12:24,520 Speaker 1: you get your podcasts, or watch us live on YouTube. 241 00:12:25,120 --> 00:12:28,200 Speaker 2: We want to go to stocks. We have Puma shares. 242 00:12:28,240 --> 00:12:31,480 Speaker 2: They've really been taken a hit. The reason behind it, 243 00:12:31,480 --> 00:12:33,199 Speaker 2: that's what we want to find out. So we want 244 00:12:33,200 --> 00:12:35,080 Speaker 2: to go to someone who knows it. It's Poom Goyel. 245 00:12:35,200 --> 00:12:41,040 Speaker 2: She's senior US e commerce and retail analysts at Bloomberg Intelligence. Poohum, So, 246 00:12:41,400 --> 00:12:44,320 Speaker 2: explain the issue. I mean, is it just tariffs? Is 247 00:12:44,320 --> 00:12:46,560 Speaker 2: that the issue for Puma. 248 00:12:46,720 --> 00:12:49,440 Speaker 3: No, it's not just tariffs. It's a lot more than tariffs. 249 00:12:49,440 --> 00:12:52,800 Speaker 3: So there's multiple things going on here. The first that 250 00:12:52,840 --> 00:12:55,560 Speaker 3: probably applies to everyone, has four x issues, so there's 251 00:12:55,559 --> 00:12:58,560 Speaker 3: four x pressure. The second ist tariffs, which is about 252 00:12:58,559 --> 00:13:02,520 Speaker 3: a eighty five million dollars impact for twenty twenty five. 253 00:13:02,640 --> 00:13:07,000 Speaker 3: And the third is wholesale weakness. And the wholesale weakness 254 00:13:07,080 --> 00:13:10,320 Speaker 3: is a Puma specific issue, and I think that's really 255 00:13:10,360 --> 00:13:15,000 Speaker 3: the biggest here. They've been challenged over the past few months. 256 00:13:15,000 --> 00:13:18,520 Speaker 3: We've seen them, you know, sales kind of accelerate, especially 257 00:13:18,600 --> 00:13:22,559 Speaker 3: in North America, and they have lost momentum and that 258 00:13:22,720 --> 00:13:27,160 Speaker 3: just completely was evident in two Q results and the 259 00:13:27,240 --> 00:13:30,320 Speaker 3: fact that they had to cut guidance. They were expecting 260 00:13:30,360 --> 00:13:32,800 Speaker 3: a load to mid single digit increase in twenty twenty 261 00:13:32,800 --> 00:13:36,000 Speaker 3: five four revenues that is now expected to be down 262 00:13:36,360 --> 00:13:40,200 Speaker 3: low double digits. So a big, big shift here, and 263 00:13:40,240 --> 00:13:42,160 Speaker 3: I think it's largely demand driven. 264 00:13:42,360 --> 00:13:45,719 Speaker 5: Yes, and it's low double digit revenue drop as you 265 00:13:45,800 --> 00:13:48,400 Speaker 5: pointed out. So then how credible is it proposed turnaround 266 00:13:48,440 --> 00:13:52,720 Speaker 5: timeline given in twenty twenty six as they transition through 267 00:13:52,760 --> 00:13:53,120 Speaker 5: the year. 268 00:13:54,320 --> 00:13:56,800 Speaker 3: Yeah, so a turnaround, you know, we need to know 269 00:13:56,840 --> 00:13:59,200 Speaker 3: what they'll do. They have a new CEO in place. 270 00:13:59,679 --> 00:14:04,640 Speaker 3: He is expected to provide some direction on that at 271 00:14:04,640 --> 00:14:08,640 Speaker 3: the end of October. So between now and October, he's learning, 272 00:14:08,679 --> 00:14:11,880 Speaker 3: he's trying to figure out the turnaround. At best, twenty 273 00:14:11,920 --> 00:14:15,400 Speaker 3: twenty five will be a reset year and twenty twenty 274 00:14:15,400 --> 00:14:18,320 Speaker 3: six a transition year. So there's a lot to be 275 00:14:18,400 --> 00:14:20,560 Speaker 3: done here. I think the one thing that they can 276 00:14:20,640 --> 00:14:24,480 Speaker 3: work on in two ages inventories. Inventories on a constant 277 00:14:24,840 --> 00:14:30,000 Speaker 3: currency basis, we're up about nineteen percent. That's clearly significantly 278 00:14:30,080 --> 00:14:32,440 Speaker 3: higher than the two percent decline we saw in sales 279 00:14:32,720 --> 00:14:35,160 Speaker 3: for the second quarter, So a big gap there. They 280 00:14:35,280 --> 00:14:38,160 Speaker 3: need to work that down. That's probably priority number one 281 00:14:38,640 --> 00:14:41,680 Speaker 3: and something they can tackle. As far as figuring out 282 00:14:41,800 --> 00:14:45,920 Speaker 3: how to rebalance a portfolio between wholesale and digital and 283 00:14:46,000 --> 00:14:48,760 Speaker 3: how to really reignite demand, I think that's a longer 284 00:14:48,880 --> 00:14:51,840 Speaker 3: term push and we need to hear more on that, all. 285 00:14:51,800 --> 00:14:53,560 Speaker 2: Right, Pam. I also want to ask you about Amazon, 286 00:14:53,600 --> 00:14:56,080 Speaker 2: because they gave shoppers a little bit more time, right, 287 00:14:56,080 --> 00:14:59,240 Speaker 2: it was four days instead of the two days, and 288 00:14:59,400 --> 00:15:02,440 Speaker 2: a lot of Hello shoppers went to Walmart too, So 289 00:15:02,880 --> 00:15:05,360 Speaker 2: did that actually help give Walmart a little bit of 290 00:15:05,360 --> 00:15:06,400 Speaker 2: a boost at the same time. 291 00:15:07,200 --> 00:15:09,800 Speaker 3: Yeah, So Amazon Prime Day went from two days to 292 00:15:09,880 --> 00:15:13,720 Speaker 3: four days this year. Around Amazon Prime Day every year 293 00:15:13,760 --> 00:15:16,720 Speaker 3: for the past two years, other retailers have added their 294 00:15:16,800 --> 00:15:21,240 Speaker 3: own sales events that have been longer in duration. What 295 00:15:21,360 --> 00:15:24,680 Speaker 3: we learned from alternative data at Bloomberg, which is some 296 00:15:24,760 --> 00:15:27,480 Speaker 3: of the second measure data, there are two things. One, 297 00:15:27,640 --> 00:15:31,200 Speaker 3: Amazon sales over Prime Day, when adjusted for the four 298 00:15:31,280 --> 00:15:34,640 Speaker 3: day period for both years, were up four percent. That's 299 00:15:34,760 --> 00:15:38,000 Speaker 3: relatively in line with where they have been in previous 300 00:15:38,080 --> 00:15:41,880 Speaker 3: Prime Day years. Amid singlegic gain, Walmart sales in that 301 00:15:41,960 --> 00:15:44,800 Speaker 3: same time period did grow more, but you have to 302 00:15:44,800 --> 00:15:48,960 Speaker 3: remember that you're comparing apples and oranges here. Amazon has 303 00:15:49,160 --> 00:15:51,840 Speaker 3: a GMB of over seven hundred billion dollars based on 304 00:15:51,880 --> 00:15:55,800 Speaker 3: our estimates, Walmart's over one hundred billion dollars. Walmart's younger 305 00:15:55,880 --> 00:15:58,520 Speaker 3: when it comes to the e commerce push and therefore 306 00:15:58,560 --> 00:16:02,480 Speaker 3: growth rates are here. Did customers move to Walmart because 307 00:16:02,520 --> 00:16:07,280 Speaker 3: Amazon gave them longer duration? Some? Yes, But the second 308 00:16:07,360 --> 00:16:10,960 Speaker 3: measure data clearly shows that ninety one percent of shoppers 309 00:16:10,960 --> 00:16:15,720 Speaker 3: that shopped Amazon shopped one retailer over Prime Day, so 310 00:16:15,760 --> 00:16:17,920 Speaker 3: there was an increase to Walmart. I went from four 311 00:16:17,960 --> 00:16:20,960 Speaker 3: percent to eight percent of Amazon shoppers are shopped Prime Day, 312 00:16:21,480 --> 00:16:24,600 Speaker 3: but the bulk are still loyal to Amazon in our view. 313 00:16:25,120 --> 00:16:27,120 Speaker 5: That's what I was thinking. Whether this is a shift 314 00:16:27,160 --> 00:16:30,600 Speaker 5: in consumer sentiment or a shift in consumer loyalty, or 315 00:16:30,640 --> 00:16:34,040 Speaker 5: just really better discount or timing on Walmart's part. But 316 00:16:34,080 --> 00:16:36,760 Speaker 5: it did show that Walmart can be quite a formidable 317 00:16:36,840 --> 00:16:38,160 Speaker 5: arrival to Prime Day. 318 00:16:38,280 --> 00:16:41,480 Speaker 3: Yes, absolutely they can. They absolutely can be, and they 319 00:16:41,560 --> 00:16:44,920 Speaker 3: are because the one retailer that can compete on price 320 00:16:45,440 --> 00:16:50,040 Speaker 3: and also make investments to support their logistics platform. As Walmart, 321 00:16:50,120 --> 00:16:53,000 Speaker 3: they have the deep pockets and they have the scale 322 00:16:53,040 --> 00:16:56,880 Speaker 3: to compete with Amazon. But that said, Amazon's Prime members 323 00:16:56,960 --> 00:17:00,120 Speaker 3: are very loyal. We saw that in the survey and 324 00:17:00,200 --> 00:17:03,120 Speaker 3: ahead of Prime Day, where when asked where you're planning 325 00:17:03,120 --> 00:17:06,840 Speaker 3: to shop, Amazon remain top of mind. People who wanted 326 00:17:06,880 --> 00:17:09,160 Speaker 3: to shine up sign up for Amazon wanted to stick 327 00:17:09,200 --> 00:17:12,199 Speaker 3: with the subscription even after the Prime Day deals. So 328 00:17:12,240 --> 00:17:14,360 Speaker 3: we do think there is a lot of loyalty there too. 329 00:17:14,920 --> 00:17:18,560 Speaker 2: Now the same a token Amazon going longer to four days, 330 00:17:18,560 --> 00:17:20,240 Speaker 2: I mean in the last minut or so we have left. 331 00:17:20,840 --> 00:17:23,400 Speaker 2: Was it because they could get more ad revenue out 332 00:17:23,400 --> 00:17:24,600 Speaker 2: of it too? I mean, was that kind of the 333 00:17:24,640 --> 00:17:25,320 Speaker 2: thought behind it? 334 00:17:26,200 --> 00:17:30,040 Speaker 3: I mean, that's definitely a plus. Was it part of it? Sure? 335 00:17:30,359 --> 00:17:33,960 Speaker 3: But I think it was really just to strategically implement 336 00:17:34,040 --> 00:17:38,600 Speaker 3: deals by category through the days and the hours within 337 00:17:38,640 --> 00:17:41,359 Speaker 3: the days, so others were doing it for a week. 338 00:17:41,480 --> 00:17:43,920 Speaker 3: I mean, if Walmart goes from two to four days, 339 00:17:43,960 --> 00:17:46,200 Speaker 3: it's you know, it's not that big of a deal. 340 00:17:46,920 --> 00:17:48,440 Speaker 2: All right, Thank you so much putting on that. I 341 00:17:48,480 --> 00:17:50,840 Speaker 2: was putt them Goyle, senior US e commerce and retail 342 00:17:50,840 --> 00:17:53,600 Speaker 2: analysts at Bloomberg Intelligence. 343 00:17:56,119 --> 00:17:59,800 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 344 00:18:00,000 --> 00:18:02,600 Speaker 1: week days at ten am Eastern on Apple, Cocklay and 345 00:18:02,600 --> 00:18:05,879 Speaker 1: Android Auto with the Bloomberg Business App. Listen on demand 346 00:18:05,920 --> 00:18:09,480 Speaker 1: wherever you get your podcasts, or watch us live on YouTube. 347 00:18:10,119 --> 00:18:12,600 Speaker 2: So earnings, after two quarters losses in a row, we 348 00:18:12,640 --> 00:18:15,120 Speaker 2: had Phillip sixty six report a beat on second quarter 349 00:18:15,160 --> 00:18:18,920 Speaker 2: at just at EPs. We want to dig deeper into 350 00:18:18,960 --> 00:18:19,680 Speaker 2: these details. 351 00:18:19,720 --> 00:18:21,000 Speaker 7: So who better to do that. 352 00:18:21,080 --> 00:18:24,399 Speaker 2: Let's bring in Brett Gibbs, these Bloomberg Intelligence Refining and 353 00:18:24,520 --> 00:18:28,479 Speaker 2: renewable fuels analysts. Brett, thank you for joining us here 354 00:18:28,920 --> 00:18:33,360 Speaker 2: from DC. Refining has been this noticeable laggard, I mean, 355 00:18:33,600 --> 00:18:34,640 Speaker 2: was it in these results? 356 00:18:36,240 --> 00:18:39,159 Speaker 8: Yeah, thanks for having me first off, and I think 357 00:18:39,520 --> 00:18:43,080 Speaker 8: it's been a noticeable laggard for Philips sixty six specifically, 358 00:18:43,600 --> 00:18:46,520 Speaker 8: and this was a clear quarter of strength for them. 359 00:18:47,359 --> 00:18:49,440 Speaker 8: One of the things too, that stood out to us 360 00:18:49,600 --> 00:18:54,880 Speaker 8: was just their refining utilization up about you know, kind 361 00:18:54,920 --> 00:18:58,640 Speaker 8: of ninety eight percent, and then their capture of what 362 00:18:58,680 --> 00:19:01,320 Speaker 8: we in the industry look at for benchmark margins for 363 00:19:01,640 --> 00:19:03,639 Speaker 8: what you can see on your screen for gasoline and 364 00:19:03,680 --> 00:19:07,040 Speaker 8: diesel prices was ninety eight percent. So this was very 365 00:19:07,119 --> 00:19:11,879 Speaker 8: very strong, and similarly on the unit costs side, part 366 00:19:11,920 --> 00:19:15,879 Speaker 8: because they ran so well, they fail below their operating 367 00:19:16,000 --> 00:19:19,280 Speaker 8: cost target for you know, the first time they were 368 00:19:19,359 --> 00:19:22,080 Speaker 8: under that five dollars and fifty cents a gallon of 369 00:19:22,560 --> 00:19:27,000 Speaker 8: what they use as adjustable controllable costs, and so that 370 00:19:27,119 --> 00:19:29,639 Speaker 8: led to the beat broadly, and now we're kind of 371 00:19:29,680 --> 00:19:34,399 Speaker 8: looking to see if that strength persists here in three Q. Again, 372 00:19:34,520 --> 00:19:36,480 Speaker 8: there's there's still a lot of work to be done 373 00:19:36,520 --> 00:19:39,600 Speaker 8: on the refining side relative to where management set out 374 00:19:40,040 --> 00:19:44,000 Speaker 8: kind of their mid cycle expectations of five billion dollars 375 00:19:44,000 --> 00:19:47,719 Speaker 8: of annualized EBIDA. But again, this is a great start. 376 00:19:48,359 --> 00:19:51,840 Speaker 5: How sustainable are these performance tailwinds moving forward? You said 377 00:19:51,840 --> 00:19:53,520 Speaker 5: you're going to look at in the next quarters. I'm 378 00:19:53,520 --> 00:19:56,560 Speaker 5: wondering if they are structural, one off or cyclical. 379 00:19:57,760 --> 00:20:01,080 Speaker 8: Yeah, no, absolutely, I mean we're fining itself as cyclical industry. 380 00:20:01,119 --> 00:20:06,000 Speaker 8: And typically two Q and three Q are the seasonal strengths. 381 00:20:06,119 --> 00:20:08,840 Speaker 8: Just you have driving season here in the US, so 382 00:20:08,880 --> 00:20:12,360 Speaker 8: that was something that obviously was a tailwind in two Q. 383 00:20:12,520 --> 00:20:15,880 Speaker 8: We also have a developing diesel story globally that has 384 00:20:15,960 --> 00:20:18,600 Speaker 8: been a little bit of a strength. We've seen it 385 00:20:18,680 --> 00:20:23,560 Speaker 8: start with the Iran related disputes. We also see some 386 00:20:23,720 --> 00:20:29,199 Speaker 8: European sanctions on Russian oil products and oil broadly, and 387 00:20:29,240 --> 00:20:32,760 Speaker 8: that's tightened up the diesel side. That had led to 388 00:20:32,840 --> 00:20:35,879 Speaker 8: a pretty strong export poll out of the Gulf Coast. 389 00:20:35,920 --> 00:20:38,679 Speaker 8: We saw that in Phillip sixty six is results this morning. 390 00:20:39,000 --> 00:20:42,000 Speaker 8: The Gulf Coast was a particular region of strength. I 391 00:20:42,040 --> 00:20:46,639 Speaker 8: think there is some durability there, but again the thought 392 00:20:46,760 --> 00:20:49,280 Speaker 8: is maybe some of that strength is behind us. The 393 00:20:49,320 --> 00:20:53,359 Speaker 8: stock is down today. Fellow Pierre Valero again had a 394 00:20:53,359 --> 00:20:56,800 Speaker 8: pretty strong set of results yesterday. The stock was down 395 00:20:56,960 --> 00:20:59,840 Speaker 8: on that and I think that part of the story 396 00:21:00,080 --> 00:21:04,640 Speaker 8: we're so is the gasoline strength is unwinding. We had 397 00:21:05,560 --> 00:21:10,320 Speaker 8: recent US government data reports this past Wednesday gasoline demand 398 00:21:10,359 --> 00:21:14,240 Speaker 8: is low seasonal levels in the US and that's something 399 00:21:14,280 --> 00:21:17,679 Speaker 8: that might counter that diesel story, specifically if some of 400 00:21:17,720 --> 00:21:19,200 Speaker 8: that recent strength on the lines. 401 00:21:20,160 --> 00:21:23,240 Speaker 2: There's been a few changes to their board, but in 402 00:21:23,359 --> 00:21:25,840 Speaker 2: May Channel there's a like the two monominees of Elliott 403 00:21:25,840 --> 00:21:27,840 Speaker 2: Management to serve how's that pending out? 404 00:21:29,280 --> 00:21:31,480 Speaker 8: Yeah, I mean back in May, the fact that the 405 00:21:31,520 --> 00:21:35,680 Speaker 8: shareholders voted for a split on some of Elliott's proposals, 406 00:21:35,720 --> 00:21:39,520 Speaker 8: so two of Elliot's nominees were elected to the board. 407 00:21:39,880 --> 00:21:42,000 Speaker 8: It kind of was a little bit of an affirmation 408 00:21:42,240 --> 00:21:46,359 Speaker 8: of management's kind of growth trajectory and plan to twenty 409 00:21:46,400 --> 00:21:49,479 Speaker 8: twenty seven. And I think in this results you kind of, 410 00:21:49,600 --> 00:21:51,760 Speaker 8: you know, management notched a little bit of a feather 411 00:21:51,760 --> 00:21:55,399 Speaker 8: in their cap there in some respects because you're seeing 412 00:21:55,520 --> 00:21:59,000 Speaker 8: Refining kind of move towards where you know they want 413 00:21:59,040 --> 00:22:01,440 Speaker 8: it to be. This wasbviously a very very solid quarter 414 00:22:01,520 --> 00:22:04,080 Speaker 8: and that's been the point of contention, So a lot 415 00:22:04,119 --> 00:22:07,160 Speaker 8: of work to be done, but working there. And then 416 00:22:07,440 --> 00:22:10,400 Speaker 8: you know, one of the other things too was Elliott 417 00:22:10,440 --> 00:22:13,000 Speaker 8: was calling for a big breakup of the company. They 418 00:22:13,000 --> 00:22:16,600 Speaker 8: were focusing on spinning out midstream, They were focusing on 419 00:22:16,680 --> 00:22:22,360 Speaker 8: potentially selling their stake in CPKEM. Chemical earnings were particularly 420 00:22:22,520 --> 00:22:27,560 Speaker 8: weak in this cycle, this earning cycle, and this is 421 00:22:27,560 --> 00:22:31,200 Speaker 8: something too that management has come out quite frankly and said, 422 00:22:31,240 --> 00:22:34,000 Speaker 8: we don't know if in this chemical margin environment it 423 00:22:34,040 --> 00:22:36,480 Speaker 8: would be the right time to sell. They also have 424 00:22:36,640 --> 00:22:40,399 Speaker 8: two large projects slated to come online in twenty twenty seven, 425 00:22:40,720 --> 00:22:43,920 Speaker 8: and so I think this does kind of affirm some 426 00:22:43,960 --> 00:22:46,879 Speaker 8: of the points that management was trying to push. But 427 00:22:46,960 --> 00:22:49,040 Speaker 8: again there's a lot of work to be done. I 428 00:22:49,080 --> 00:22:53,160 Speaker 8: think management got themselves cornered a little bit year ago 429 00:22:53,320 --> 00:22:55,520 Speaker 8: or in the past, where they had all these series 430 00:22:55,560 --> 00:22:59,320 Speaker 8: of targets that became very difficult, whether it was you know, 431 00:22:59,440 --> 00:23:02,280 Speaker 8: hitting a certain leverage target, whether it was continuing to 432 00:23:02,320 --> 00:23:06,440 Speaker 8: advance midstream growth, whether it was getting refining to these levels. 433 00:23:06,480 --> 00:23:09,320 Speaker 8: So they still certainly have their work cut out for them, 434 00:23:09,359 --> 00:23:12,879 Speaker 8: but I think this is a you know, progress is 435 00:23:12,960 --> 00:23:16,040 Speaker 8: being made and that's you know, kind of a supporting 436 00:23:16,080 --> 00:23:18,680 Speaker 8: factor to what shareholders voted for in May. 437 00:23:19,080 --> 00:23:21,560 Speaker 2: All right, Brett Gibbs, always appreciate your time at these 438 00:23:21,600 --> 00:23:25,520 Speaker 2: Bloomberg Intelligence Refining and Renewable Fuels analysts. 439 00:23:26,320 --> 00:23:31,040 Speaker 1: This is the Bloomberg Intelligence Podcast, available on Apple, Spotify, 440 00:23:31,200 --> 00:23:34,680 Speaker 1: and anywhere else you get your podcasts. 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