WEBVTT - Warner Bros Discovery Rises, Oracle Down, Southwest Airlines Drops After Lowering Profit Target

0:00:02.520 --> 0:00:07.360
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio News.

0:00:08.560 --> 0:00:12.440
<v Speaker 2>The Stock Movers Report, your roundup of companies making moves

0:00:12.480 --> 0:00:15.880
<v Speaker 2>in the stock market, harnessing the power of Bloomberg Data.

0:00:16.160 --> 0:00:17.800
<v Speaker 3>Let's take a look at some stocks on the move today.

0:00:17.800 --> 0:00:20.360
<v Speaker 3>I'm normal Inda with Paul Sweeney and we're joined today

0:00:20.360 --> 0:00:23.200
<v Speaker 3>by Bloomberg's Christine Aquino. Christine, what's on your mind today?

0:00:23.440 --> 0:00:26.040
<v Speaker 1>All right, Well, let's talk about Warner Brothers Discovery, which

0:00:26.120 --> 0:00:28.520
<v Speaker 1>is on the other side of the biggest deal today

0:00:28.520 --> 0:00:32.159
<v Speaker 1>possibly this week really, So those shares very much in

0:00:32.240 --> 0:00:34.240
<v Speaker 1>agree in keeping with the rest of the market. Nora

0:00:34.400 --> 0:00:38.080
<v Speaker 1>So ticker WBD shares are up three point eight percent

0:00:38.240 --> 0:00:41.680
<v Speaker 1>at the moment, So definitely investors seeing positives at least

0:00:41.720 --> 0:00:45.280
<v Speaker 1>from Warner Brothers perspective when it comes to this deal.

0:00:45.479 --> 0:00:49.320
<v Speaker 1>Seventies do billion dollars worth of equity with Netflix, and

0:00:49.360 --> 0:00:51.919
<v Speaker 1>so Bloomery Intelligence analy is weighing in, right, So when

0:00:51.920 --> 0:00:55.120
<v Speaker 1>they're looking at it from the epidem multiple twenty five

0:00:55.160 --> 0:00:58.080
<v Speaker 1>point two x, that is at the higher range of

0:00:58.360 --> 0:01:01.440
<v Speaker 1>the recent m and A in this space, and so

0:01:01.520 --> 0:01:03.880
<v Speaker 1>they're seeing that as a positive. And you know, the

0:01:03.960 --> 0:01:06.679
<v Speaker 1>move will allow Warner Brothers to spin off it's TV

0:01:06.800 --> 0:01:10.600
<v Speaker 1>network businesses by the third quarter of next year, and

0:01:10.840 --> 0:01:15.119
<v Speaker 1>that could potentially bring forward more industry consolidation. But as

0:01:15.120 --> 0:01:17.760
<v Speaker 1>we know, the hurdle with all these deals, of course,

0:01:17.880 --> 0:01:21.000
<v Speaker 1>is regulation, right and TD Cowan all already warning that

0:01:21.240 --> 0:01:24.360
<v Speaker 1>regulatory pushback might be the problem here. And of course

0:01:24.360 --> 0:01:27.640
<v Speaker 1>we heard from CNBC earlier reporting that the White House

0:01:27.680 --> 0:01:33.000
<v Speaker 1>is apparently viewing to deal with quote heavy skepticism. What

0:01:33.080 --> 0:01:34.560
<v Speaker 1>else do you have for us. Let's take a look

0:01:34.600 --> 0:01:37.200
<v Speaker 1>at Oracle today, Paul. So that's another software CEO that

0:01:37.360 --> 0:01:41.400
<v Speaker 1>is not exactly over cl shares up one point seven

0:01:41.440 --> 0:01:43.800
<v Speaker 1>percent at the moment. We will get their earnings on

0:01:43.920 --> 0:01:45.959
<v Speaker 1>the tenth of December, so a lot to look forward

0:01:46.000 --> 0:01:48.560
<v Speaker 1>to in that. And you know, we have Blooming Intelligence

0:01:48.600 --> 0:01:51.480
<v Speaker 1>weighing in saying that they are confident that Oracle will

0:01:51.480 --> 0:01:53.680
<v Speaker 1>be able to top their sixty five billion dollars of

0:01:53.720 --> 0:01:57.280
<v Speaker 1>total sales in fiscal twenty twenty six because the contraints

0:01:57.280 --> 0:02:00.520
<v Speaker 1>from their AI infrastructure remains tight. That means that businesses

0:02:00.520 --> 0:02:05.200
<v Speaker 1>booming and they're all engaged cloud databases and another area that

0:02:05.240 --> 0:02:08.200
<v Speaker 1>they're looking for some gains there. That expanded thirty two

0:02:08.240 --> 0:02:11.440
<v Speaker 1>percent in the first quarter, so a lot of promise there.

0:02:11.800 --> 0:02:15.160
<v Speaker 1>The focus though, and the question really is all about debt, right,

0:02:15.200 --> 0:02:18.320
<v Speaker 1>because Oracle in some ways has been sort of the

0:02:18.360 --> 0:02:22.480
<v Speaker 1>flagship of questions around how much these companies are borrowing

0:02:22.520 --> 0:02:25.680
<v Speaker 1>to finance their aideals. Oracle does not have as good

0:02:25.720 --> 0:02:28.040
<v Speaker 1>of a credit rating as some of the cloud computing giants,

0:02:28.120 --> 0:02:30.200
<v Speaker 1>and as a matter of fact, a measure of its

0:02:30.240 --> 0:02:32.400
<v Speaker 1>credit risk actually closed at the highest level since the

0:02:32.440 --> 0:02:37.000
<v Speaker 1>financial crisis this week because it has effectively sold tens

0:02:37.000 --> 0:02:39.440
<v Speaker 1>of billions of dollars of bonds in recent months to

0:02:39.440 --> 0:02:41.960
<v Speaker 1>finance some of their aideals. So big questions around their

0:02:42.000 --> 0:02:42.480
<v Speaker 1>debt for sure.

0:02:42.600 --> 0:02:45.720
<v Speaker 3>Yeah, shares of Oracle taker o rcl up about thirty

0:02:45.760 --> 0:02:48.440
<v Speaker 3>one percent so far this year. I want to talk

0:02:48.480 --> 0:02:51.320
<v Speaker 3>about the airline space. We did hear from Delta more recently,

0:02:51.360 --> 0:02:53.840
<v Speaker 3>and they were talking about the drags that happened because

0:02:53.880 --> 0:02:55.800
<v Speaker 3>of the government shut down. But you're looking at Southwest

0:02:55.800 --> 0:02:57.520
<v Speaker 3>and they're kind of saying something similar.

0:02:57.360 --> 0:03:01.000
<v Speaker 1>Yeah, exactly, Nora, So Southwest Taker l UV. Those shares

0:03:01.000 --> 0:03:03.320
<v Speaker 1>are not doing too badly. Actually, they're very much in

0:03:03.400 --> 0:03:05.839
<v Speaker 1>the green of five point eight percent. But we did

0:03:05.840 --> 0:03:08.600
<v Speaker 1>hear from Southwest saying that they are lowering their operating

0:03:08.639 --> 0:03:11.920
<v Speaker 1>profit target for the full year, again because of fallout

0:03:11.960 --> 0:03:15.760
<v Speaker 1>from both the government's shutdown, but also higher fuel prices

0:03:15.800 --> 0:03:18.079
<v Speaker 1>as another reason that they're signing there. So now they're

0:03:18.120 --> 0:03:22.280
<v Speaker 1>looking at their EBIT forecast approximately five hundred million dollars

0:03:22.440 --> 0:03:25.680
<v Speaker 1>versus the prior expectation of six hundred million to eight

0:03:25.800 --> 0:03:29.240
<v Speaker 1>hundred million, So quite the cut there. But the silver lining,

0:03:29.240 --> 0:03:31.040
<v Speaker 1>and I think this is what investors are seizing on,

0:03:31.240 --> 0:03:34.000
<v Speaker 1>is that they did say that their bookings have recovered

0:03:34.040 --> 0:03:39.360
<v Speaker 1>to previous forecasts after a temporary slowdown, presumably because of

0:03:39.640 --> 0:03:43.720
<v Speaker 1>the flight halts during the shutdown. So I think that's

0:03:43.720 --> 0:03:46.520
<v Speaker 1>what investors is seizing on. Big travel season also, so

0:03:46.560 --> 0:03:49.280
<v Speaker 1>I'm sure there's a lot of demand for Southwest tickets,

0:03:49.480 --> 0:03:53.640
<v Speaker 1>all right. So Southwest Airlines the ticker is LUV LUV Yes,

0:03:53.680 --> 0:03:54.560
<v Speaker 1>why why?

0:03:54.680 --> 0:03:54.920
<v Speaker 3>Why?

0:03:55.520 --> 0:03:58.960
<v Speaker 1>Don't know why? Tell us? Okay, Southwest Airlines is based

0:03:59.000 --> 0:04:03.240
<v Speaker 1>at love Field. Oh, you're right, Worth area, so they

0:04:03.320 --> 0:04:07.640
<v Speaker 1>just really leaned into that absolutely heritage for work area.

0:04:07.760 --> 0:04:14.040
<v Speaker 2>So the stock movers report from Bloomberg Radio. Check back

0:04:14.040 --> 0:04:16.279
<v Speaker 2>with us throughout the day for the latest roundup of

0:04:16.320 --> 0:04:19.599
<v Speaker 2>companies making news on Wall Street and for the latest

0:04:19.640 --> 0:04:23.840
<v Speaker 2>market moving headlines. Listen to Bloomberg Radio Live. Catch us

0:04:23.880 --> 0:04:27.599
<v Speaker 2>on YouTube, Bloomberg dot com, and on Applecarplay and Android

0:04:27.640 --> 0:04:29.640
<v Speaker 2>Auto with the Bloomberg Business app.