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Speaker 2: One of those thoughts under pressure is actually Charter. Oh no, oh,
Speaker 2: we're not going into that. Yes, are we going to?
Speaker 3: Oh?
Speaker 2: We both are, okay, So Keitha, there we go. We
Speaker 2: are going to Githa. Keetha wrong an Avis. She's Bloomberg
Speaker 2: Intelligence analysts on the latest in the media space. So getha.
Speaker 2: We were talking about Charter. So shared's really taken a
Speaker 2: hit lost more Internet subscribers. If you can explain to us,
Speaker 2: is it just a lot of pressure from these mobile
Speaker 2: phone companies? Is that what it is?
Speaker 3: It is exactly that.
Speaker 4: So remember, you know, Charter controls about twenty eight percent
Speaker 4: of the fixed broadband market. They have roughly nine million subscribers.
Speaker 4: But what has happened over the past few years is
Speaker 4: you know, the telecoms, so think about you know, AT
Speaker 4: and T, Verizon, T Mobile. They've gotten really aggressive. So
Speaker 4: of course we know that they are the top wireless providers.
Speaker 4: But where they're competing now with the cable operators is
Speaker 4: in fixed broadband, so your home internet connection for instance. Right,
Speaker 4: So what they're doing is they're offering something called five
Speaker 4: G home Internet, which is really cheap. It's just very
Speaker 4: easy to hook up. It costs about fifty dollars a month,
Speaker 4: and it's much cheaper than cable. And so people are
Speaker 4: really saying, you know what, this is great. I don't
Speaker 4: have to deal with, you know, the endless heartache that
Speaker 4: everybody usually has with their cable company. Plus it's cheaper.
Speaker 4: And so that's where we're seeing a lot of the
Speaker 4: competitive pressure for the cable operators, both Charter and Comcast,
Speaker 4: and they are losing subscribers, and they're losing subscribers at
Speaker 4: an accelerating pace, and that is what is really spooking
Speaker 4: investors today.
Speaker 5: So we have Charter CEO Chris Winfrey saying that the
Speaker 5: company has been fighting back with streaming service editions and
Speaker 5: noted that the new tax legislation will save the company
Speaker 5: several billion dollars in cash taxes in the next five
Speaker 5: or so years. Do you think that's their next lifefest?
Speaker 4: So one thing, yes, I think that definitely helps on
Speaker 4: the margin, but it's really not doing a whole lot
Speaker 4: for you know, the stock today. But yes, bonus depreciation,
Speaker 4: you know, one hundred percent bonus depreciation is something that
Speaker 4: will help boost cash taxes and ultimately help boost capital spending.
Speaker 4: And I think that is the whole you know, idea
Speaker 4: behind having this this tax incentive to kind of boost
Speaker 4: capital spending all across. So yes, we will see some
Speaker 4: uplift from there. But as of right now, I think
Speaker 4: what Chotter is really going to have to focus on
Speaker 4: is about a month ago, or maybe just over two
Speaker 4: months ago, they announced a deal with Cox Communications. It's
Speaker 4: a thirty five billion dollar deal which actually will make
Speaker 4: them the largest broadband operator. And so I think what's
Speaker 4: going to happen at this point is a lot of
Speaker 4: focus is going to shift to that deal and how
Speaker 4: that can potentially help them stem losses a little bit,
Speaker 4: kind of regain their footing a little bit financially. But
Speaker 4: as it stands right now, you know, things are looking
Speaker 4: pretty bleak for all of the cable operators and Charter also.
Speaker 2: So that was with Charter, what about their their mobile
Speaker 2: Charter mobile offerings, Because I say that that got a
Speaker 2: little bit of a bump because there, I guess agreeing
Speaker 2: with Verizon for certain things. How is that working out
Speaker 2: for them?
Speaker 1: Yeah?
Speaker 4: So, you know, just like you know, you had the
Speaker 4: telecoms that that really are the incumbents, and wireless and
Speaker 4: cable that are the incumbents in broadband, we have both
Speaker 4: of them kind of crossing over into each other's territories.
Speaker 4: So you have Telecom now kind of crossing over into
Speaker 4: Cable's territory and kind of offering broadband service. And similarly,
Speaker 4: you have Cable kind of crossing over into telecom space
Speaker 4: and offering wireless and mobile services. And they've actually made
Speaker 4: a pretty decent foray, I would say, into the wireless world.
Speaker 4: Charter actually has been extremely aggressive. So the one of
Speaker 4: the strategies that they're following is they're bundling their mobile
Speaker 4: service along with their broad in order to actually stem
Speaker 4: the subscriber laws. So as long as we're within the
Speaker 4: Charter footprint, you can get a mobile line at a
Speaker 4: significant discount. It is helping on the margin, but again,
Speaker 4: as we are seeing today, not really enough to move
Speaker 4: the needle.
Speaker 5: I want to talk about another big development happening in
Speaker 5: the media space. We have FCC Chair Brendan Carr saying
Speaker 5: that he was pleased by Skydance commitments when it comes
Speaker 5: to the concessions, How significant are these concessions for regulatory
Speaker 5: president when it comes to future media mergers, and I'm
Speaker 5: talking about this Guidance and Paramount deal.
Speaker 4: Yeah, So I think the FCC, this FCC was definitely
Speaker 4: expected to be much more you know, m and a friendly.
Speaker 4: So we're kind of expecting this whole wave of deregulation
Speaker 4: to happen with a broadcast. But for Skydance and Paramount
Speaker 4: in particular, you know, you had that big CBS News
Speaker 4: lawsuit that was kind of pending. There were the DEI
Speaker 4: issues that you kind of just mentioned before the segment.
Speaker 4: So all of those concessions I think really kind of
Speaker 4: helped get the deal. We know that the Listen family
Speaker 4: also met with the FCC, they met with President Trump
Speaker 4: to kind of get the regulatory approval for you know,
Speaker 4: this deal, And I think at the end of the day,
Speaker 4: that kind of does signal that as long as you
Speaker 4: know you're willing to work with the FCC and the administration,
Speaker 4: I think a lot of the media deals can potentially
Speaker 4: get done.
Speaker 6: All right, keitha.
Speaker 2: Ron and Nathan, thank you so much for your time.
Speaker 2: She's Bloomberg Intelligence analyst. On US media.
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Speaker 2: All right, So the turnaround efforts Intel, his new CEO,
Speaker 2: they're under question the latest earnings report. That's the reason why.
Speaker 2: Here to explain more about it is Kun John Sabani.
Speaker 2: He's Bloomberg Intelligence Senior Semiconductor analyst, Kun John. If you
Speaker 2: can explain to us, there's some concern that the new
Speaker 2: CEO he's a little bit more focused on hutting costs
Speaker 2: than making the company more competitive. I mean, is he
Speaker 2: or what's leading to those thoughts?
Speaker 7: I don't think it's.
Speaker 6: As clear as we staid it. You know, the results
Speaker 6: were a missed bag. The new CEO is definitely taking
Speaker 6: some steps in the right direction, aka cutting costs, which
Speaker 6: was necessary for this company, turning around the culture, focusing
Speaker 6: on making things simpler, and focusing on the core assets
Speaker 6: as he's divesting the non core assets. The issue here
Speaker 6: is that we have investors had been promised a lot
Speaker 6: from the previous CEO, right which is still on their mind,
Speaker 6: namely that the foundry business, that the eighteen A was
Speaker 6: going to be the key node where Intel would get
Speaker 6: external customers and start getting a lot of external foundry revenues.
Speaker 7: From what we heard last night, it seems.
Speaker 6: That goalpost is sort of moving farther out now to
Speaker 6: fourteen A. So that was a disappointing fact that investors
Speaker 6: will now need to wait quite a few years before
Speaker 6: we can start seeing billions of dollars of external customers
Speaker 6: bringing in foundary revenue.
Speaker 5: Despite the turn to AI and foundry services, Intel continues
Speaker 5: to lag behind Nvidia in AMD. So what signs show
Speaker 5: that Intel is closing that gap in AI leadership or
Speaker 5: foundry relevance in the second half of the year.
Speaker 7: Well, there are no signs as of this point. Right.
Speaker 7: They are changing. It's clear they've lost out on the
Speaker 7: AI race.
Speaker 6: They are changing the way they think about AI under
Speaker 6: the new CEO, but that will take time.
Speaker 7: You cannot just close the three year gap suddenly in
Speaker 7: a second half. So we don't have any tackers right now.
Speaker 6: We have to wait I think sort of in the
Speaker 6: second year they might announce what their strategy is and
Speaker 6: it's not clear what the timing of that closing of
Speaker 6: the gap will be.
Speaker 2: And you mentioned the new CEO, so how is his
Speaker 2: approach different from former CEO Pat Gelsinger.
Speaker 7: Well, it's like two complete opposites, right.
Speaker 6: The priors was very aggressive, like to put you know,
Speaker 6: goalposts at the stars, so at least you get the
Speaker 6: moon and really promise and try to aggressively achieve it,
Speaker 6: which didn't happen on all metrics Limbutan is very practical
Speaker 6: and very conservative, right, so which we saw from the
Speaker 6: results last quarter. They had given a very conservative guide
Speaker 6: which helped them to get some breather and finally deliver
Speaker 6: a good beat both on the print and the guide.
Speaker 7: But that's a two very different approaches. A clear example
Speaker 7: here is you know, on.
Speaker 6: The LIBU they've decided that they're not going to aggressively
Speaker 6: promise that they are going to have external customers right
Speaker 6: away on eighteen A. They will first make that node
Speaker 6: work internally, get it to better heels, and then market
Speaker 6: it to customers, which, if you ask me, it's a
Speaker 6: very right and practical way to go.
Speaker 7: About this versus the prior CEO.
Speaker 6: It was like before even the process was ready, promising
Speaker 6: in the investors, promising the customers that this is what
Speaker 6: we are going to give to you and get external revenues.
Speaker 5: And we know that Intel has canceled or delayed major
Speaker 5: factory projects in Germany, Poland and even Ohio. What impact
Speaker 5: does that have when it comes to their ability to
Speaker 5: meet future AI chip demands or like how credible are
Speaker 5: the timelines for those as well?
Speaker 6: Yeah, given the timeline of the nodes that I spoke about,
Speaker 6: I don't we don't think. We think this is a
Speaker 6: good move because it helps them with near term liquidity
Speaker 6: and free cash flow and keeps them still it still
Speaker 6: makes them be flexible that if external customers do come
Speaker 6: suddenly to them and have a lot of demand for
Speaker 6: these nodes, they still have the flexibility to start ramping
Speaker 6: up in a given amount of time. So this is
Speaker 6: actually a good move in our regards.
Speaker 2: So they had a resurgence in the PC industry manufacturers
Speaker 2: kind of build up this inventory before the tariffs hit.
Speaker 2: Has that slowed just a bit?
Speaker 6: We definitely see that signs, you know, if you look
Speaker 6: at that typical seasonality the first half results that they're
Speaker 6: delivered in the PC where above seasonal. That suggests that
Speaker 6: there was some credit fear driven pull in and now
Speaker 6: that the terriff risks have sort of calmed down since
Speaker 6: the April first we are the guide that they provided
Speaker 6: implies a sub seasonal below seasonal second half, which suggests
Speaker 6: that the customers which bought those inventories are sort of
Speaker 6: now slowing down. So they did see the benefit of
Speaker 6: that in first half, but now they are going to
Speaker 6: see the opposite side of that in the second half.
Speaker 5: And Intelli's cutting around fifteen percent of its core workforce.
Speaker 5: We have reported that do you think that will have
Speaker 5: operational impacts? Because when you cut headford that will affect
Speaker 5: obviously some product developments and all that.
Speaker 6: It's a difficult situation to be in. You know, from
Speaker 6: an investor perspective, we like this move. You know, if
Speaker 6: you look at Intel and compare it to most of
Speaker 6: it others compute players, they definitely have significantly high head
Speaker 6: counter revenue that they're bringing in, so there was definitely
Speaker 6: a headcount reduction needed. The management layer had become one
Speaker 6: of the most bloated management hierarchy s. Tax when you
Speaker 6: compare this in the industry, so this was definitely needed.
Speaker 6: But yes, you're right, when you're going through headcom cuts,
Speaker 6: the morale does get impacted, right, And it's also difficult
Speaker 6: to now attract and keep the best talent that you have,
Speaker 6: which they are trying to do to sort of bring
Speaker 6: up their AI competence again and close that gap.
Speaker 2: Good Jenna, So how does Intel move forward from today's results?
Speaker 6: I think it will be a hard few years for them,
Speaker 6: but they need to keep doing what they have been
Speaker 6: doing in the last two quarters. We like the direction
Speaker 6: that Libu is taking, you know, slowly, if he continues
Speaker 6: to stay consistent on his communication, on his conservative path,
Speaker 6: slowly and surely and as the longest keep delivering on
Speaker 6: those eighteen A milestones and getting up the yields slowly
Speaker 6: and slowly, Investors will get used to this new way
Speaker 6: of looking at Intel, sort of underpromising and over delivering,
Speaker 6: and that should help them in the long run.
Speaker 7: But it's definitely going to be a long, hard path ahead.
Speaker 2: All right, we'll be watching. Thank you kuon John. That
Speaker 2: was Koon JOm So. Bonnie Bloomberg Intelligence senior semiconductor analyst.
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Speaker 2: We want to go to stocks. We have Puma shares.
Speaker 2: They've really been taken a hit. The reason behind it,
Speaker 2: that's what we want to find out. So we want
Speaker 2: to go to someone who knows it. It's Poom Goyel.
Speaker 2: She's senior US e commerce and retail analysts at Bloomberg Intelligence. Poohum, So,
Speaker 2: explain the issue. I mean, is it just tariffs? Is
Speaker 2: that the issue for Puma.
Speaker 3: No, it's not just tariffs. It's a lot more than tariffs.
Speaker 3: So there's multiple things going on here. The first that
Speaker 3: probably applies to everyone, has four x issues, so there's
Speaker 3: four x pressure. The second ist tariffs, which is about
Speaker 3: a eighty five million dollars impact for twenty twenty five.
Speaker 3: And the third is wholesale weakness. And the wholesale weakness
Speaker 3: is a Puma specific issue, and I think that's really
Speaker 3: the biggest here. They've been challenged over the past few months.
Speaker 3: We've seen them, you know, sales kind of accelerate, especially
Speaker 3: in North America, and they have lost momentum and that
Speaker 3: just completely was evident in two Q results and the
Speaker 3: fact that they had to cut guidance. They were expecting
Speaker 3: a load to mid single digit increase in twenty twenty
Speaker 3: five four revenues that is now expected to be down
Speaker 3: low double digits. So a big, big shift here, and
Speaker 3: I think it's largely demand driven.
Speaker 5: Yes, and it's low double digit revenue drop as you
Speaker 5: pointed out. So then how credible is it proposed turnaround
Speaker 5: timeline given in twenty twenty six as they transition through
Speaker 5: the year.
Speaker 3: Yeah, so a turnaround, you know, we need to know
Speaker 3: what they'll do. They have a new CEO in place.
Speaker 3: He is expected to provide some direction on that at
Speaker 3: the end of October. So between now and October, he's learning,
Speaker 3: he's trying to figure out the turnaround. At best, twenty
Speaker 3: twenty five will be a reset year and twenty twenty
Speaker 3: six a transition year. So there's a lot to be
Speaker 3: done here. I think the one thing that they can
Speaker 3: work on in two ages inventories. Inventories on a constant
Speaker 3: currency basis, we're up about nineteen percent. That's clearly significantly
Speaker 3: higher than the two percent decline we saw in sales
Speaker 3: for the second quarter, So a big gap there. They
Speaker 3: need to work that down. That's probably priority number one
Speaker 3: and something they can tackle. As far as figuring out
Speaker 3: how to rebalance a portfolio between wholesale and digital and
Speaker 3: how to really reignite demand, I think that's a longer
Speaker 3: term push and we need to hear more on that, all.
Speaker 2: Right, Pam. I also want to ask you about Amazon,
Speaker 2: because they gave shoppers a little bit more time, right,
Speaker 2: it was four days instead of the two days, and
Speaker 2: a lot of Hello shoppers went to Walmart too, So
Speaker 2: did that actually help give Walmart a little bit of
Speaker 2: a boost at the same time.
Speaker 3: Yeah, So Amazon Prime Day went from two days to
Speaker 3: four days this year. Around Amazon Prime Day every year
Speaker 3: for the past two years, other retailers have added their
Speaker 3: own sales events that have been longer in duration. What
Speaker 3: we learned from alternative data at Bloomberg, which is some
Speaker 3: of the second measure data, there are two things. One,
Speaker 3: Amazon sales over Prime Day, when adjusted for the four
Speaker 3: day period for both years, were up four percent. That's
Speaker 3: relatively in line with where they have been in previous
Speaker 3: Prime Day years. Amid singlegic gain, Walmart sales in that
Speaker 3: same time period did grow more, but you have to
Speaker 3: remember that you're comparing apples and oranges here. Amazon has
Speaker 3: a GMB of over seven hundred billion dollars based on
Speaker 3: our estimates, Walmart's over one hundred billion dollars. Walmart's younger
Speaker 3: when it comes to the e commerce push and therefore
Speaker 3: growth rates are here. Did customers move to Walmart because
Speaker 3: Amazon gave them longer duration? Some? Yes, But the second
Speaker 3: measure data clearly shows that ninety one percent of shoppers
Speaker 3: that shopped Amazon shopped one retailer over Prime Day, so
Speaker 3: there was an increase to Walmart. I went from four
Speaker 3: percent to eight percent of Amazon shoppers are shopped Prime Day,
Speaker 3: but the bulk are still loyal to Amazon in our view.
Speaker 5: That's what I was thinking. Whether this is a shift
Speaker 5: in consumer sentiment or a shift in consumer loyalty, or
Speaker 5: just really better discount or timing on Walmart's part. But
Speaker 5: it did show that Walmart can be quite a formidable
Speaker 5: arrival to Prime Day.
Speaker 3: Yes, absolutely they can. They absolutely can be, and they
Speaker 3: are because the one retailer that can compete on price
Speaker 3: and also make investments to support their logistics platform. As Walmart,
Speaker 3: they have the deep pockets and they have the scale
Speaker 3: to compete with Amazon. But that said, Amazon's Prime members
Speaker 3: are very loyal. We saw that in the survey and
Speaker 3: ahead of Prime Day, where when asked where you're planning
Speaker 3: to shop, Amazon remain top of mind. People who wanted
Speaker 3: to shine up sign up for Amazon wanted to stick
Speaker 3: with the subscription even after the Prime Day deals. So
Speaker 3: we do think there is a lot of loyalty there too.
Speaker 2: Now the same a token Amazon going longer to four days,
Speaker 2: I mean in the last minut or so we have left.
Speaker 2: Was it because they could get more ad revenue out
Speaker 2: of it too? I mean, was that kind of the
Speaker 2: thought behind it?
Speaker 3: I mean, that's definitely a plus. Was it part of it? Sure?
Speaker 3: But I think it was really just to strategically implement
Speaker 3: deals by category through the days and the hours within
Speaker 3: the days, so others were doing it for a week.
Speaker 3: I mean, if Walmart goes from two to four days,
Speaker 3: it's you know, it's not that big of a deal.
Speaker 2: All right, Thank you so much putting on that. I
Speaker 2: was putt them Goyle, senior US e commerce and retail
Speaker 2: analysts at Bloomberg Intelligence.
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Speaker 1: week days at ten am Eastern on Apple, Cocklay and
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Speaker 2: So earnings, after two quarters losses in a row, we
Speaker 2: had Phillip sixty six report a beat on second quarter
Speaker 2: at just at EPs. We want to dig deeper into
Speaker 2: these details.
Speaker 7: So who better to do that.
Speaker 2: Let's bring in Brett Gibbs, these Bloomberg Intelligence Refining and
Speaker 2: renewable fuels analysts. Brett, thank you for joining us here
Speaker 2: from DC. Refining has been this noticeable laggard, I mean,
Speaker 2: was it in these results?
Speaker 8: Yeah, thanks for having me first off, and I think
Speaker 8: it's been a noticeable laggard for Philips sixty six specifically,
Speaker 8: and this was a clear quarter of strength for them.
Speaker 8: One of the things too, that stood out to us
Speaker 8: was just their refining utilization up about you know, kind
Speaker 8: of ninety eight percent, and then their capture of what
Speaker 8: we in the industry look at for benchmark margins for
Speaker 8: what you can see on your screen for gasoline and
Speaker 8: diesel prices was ninety eight percent. So this was very
Speaker 8: very strong, and similarly on the unit costs side, part
Speaker 8: because they ran so well, they fail below their operating
Speaker 8: cost target for you know, the first time they were
Speaker 8: under that five dollars and fifty cents a gallon of
Speaker 8: what they use as adjustable controllable costs, and so that
Speaker 8: led to the beat broadly, and now we're kind of
Speaker 8: looking to see if that strength persists here in three Q. Again,
Speaker 8: there's there's still a lot of work to be done
Speaker 8: on the refining side relative to where management set out
Speaker 8: kind of their mid cycle expectations of five billion dollars
Speaker 8: of annualized EBIDA. But again, this is a great start.
Speaker 5: How sustainable are these performance tailwinds moving forward? You said
Speaker 5: you're going to look at in the next quarters. I'm
Speaker 5: wondering if they are structural, one off or cyclical.
Speaker 8: Yeah, no, absolutely, I mean we're fining itself as cyclical industry.
Speaker 8: And typically two Q and three Q are the seasonal strengths.
Speaker 8: Just you have driving season here in the US, so
Speaker 8: that was something that obviously was a tailwind in two Q.
Speaker 8: We also have a developing diesel story globally that has
Speaker 8: been a little bit of a strength. We've seen it
Speaker 8: start with the Iran related disputes. We also see some
Speaker 8: European sanctions on Russian oil products and oil broadly, and
Speaker 8: that's tightened up the diesel side. That had led to
Speaker 8: a pretty strong export poll out of the Gulf Coast.
Speaker 8: We saw that in Phillip sixty six is results this morning.
Speaker 8: The Gulf Coast was a particular region of strength. I
Speaker 8: think there is some durability there, but again the thought
Speaker 8: is maybe some of that strength is behind us. The
Speaker 8: stock is down today. Fellow Pierre Valero again had a
Speaker 8: pretty strong set of results yesterday. The stock was down
Speaker 8: on that and I think that part of the story
Speaker 8: we're so is the gasoline strength is unwinding. We had
Speaker 8: recent US government data reports this past Wednesday gasoline demand
Speaker 8: is low seasonal levels in the US and that's something
Speaker 8: that might counter that diesel story, specifically if some of
Speaker 8: that recent strength on the lines.
Speaker 2: There's been a few changes to their board, but in
Speaker 2: May Channel there's a like the two monominees of Elliott
Speaker 2: Management to serve how's that pending out?
Speaker 8: Yeah, I mean back in May, the fact that the
Speaker 8: shareholders voted for a split on some of Elliott's proposals,
Speaker 8: so two of Elliot's nominees were elected to the board.
Speaker 8: It kind of was a little bit of an affirmation
Speaker 8: of management's kind of growth trajectory and plan to twenty
Speaker 8: twenty seven. And I think in this results you kind of,
Speaker 8: you know, management notched a little bit of a feather
Speaker 8: in their cap there in some respects because you're seeing
Speaker 8: Refining kind of move towards where you know they want
Speaker 8: it to be. This wasbviously a very very solid quarter
Speaker 8: and that's been the point of contention, So a lot
Speaker 8: of work to be done, but working there. And then
Speaker 8: you know, one of the other things too was Elliott
Speaker 8: was calling for a big breakup of the company. They
Speaker 8: were focusing on spinning out midstream, They were focusing on
Speaker 8: potentially selling their stake in CPKEM. Chemical earnings were particularly
Speaker 8: weak in this cycle, this earning cycle, and this is
Speaker 8: something too that management has come out quite frankly and said,
Speaker 8: we don't know if in this chemical margin environment it
Speaker 8: would be the right time to sell. They also have
Speaker 8: two large projects slated to come online in twenty twenty seven,
Speaker 8: and so I think this does kind of affirm some
Speaker 8: of the points that management was trying to push. But
Speaker 8: again there's a lot of work to be done. I
Speaker 8: think management got themselves cornered a little bit year ago
Speaker 8: or in the past, where they had all these series
Speaker 8: of targets that became very difficult, whether it was you know,
Speaker 8: hitting a certain leverage target, whether it was continuing to
Speaker 8: advance midstream growth, whether it was getting refining to these levels.
Speaker 8: So they still certainly have their work cut out for them,
Speaker 8: but I think this is a you know, progress is
Speaker 8: being made and that's you know, kind of a supporting
Speaker 8: factor to what shareholders voted for in May.
Speaker 2: All right, Brett Gibbs, always appreciate your time at these
Speaker 2: Bloomberg Intelligence Refining and Renewable Fuels analysts.
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