In today’s briefing:
- Apple Mar-25 Inline, June Slightly Weak as Tariffs Hit Margins, Supplychain Reshuffling Out of China
- Starz RemainCo Deep Dive
- If I Wanted to Bet on Humanoids, I’d Buy Meta.
- Amazon 1Q’25 Update
- Hyperscale Capex Is Maintained or Increased No Cuts or Postponement Capacity Constrain at AMZN GOOG
- Procter & Gamble (P&G) Looking To Turbocharge Retail Reach Through Channel Diversification But Will It Work?
- [Alert] Buy Lionsgate Entertainment
- Whirlpool Corporation: Will The North American Market Dynamics Reflect Its Capability To Adapt To & Capitalize On Market Changes?
- Gilead Sciences: Cell Therapy Adoption & Expansion to Strengthen Its Competitive Position n Its Domain!
- Comcast: Will The Management’s Focus on Wireless Expansion and Converged Offerings Help Continue Its Market-Beating Run?
Apple Mar-25 Inline, June Slightly Weak as Tariffs Hit Margins, Supplychain Reshuffling Out of China
- 2Q25 small 2% beat. Products revenue (iPhone, Mac, etc) up 3% YoY. Services up 12%. Jun-25: low- to mid-single digit revenue growth YoY (inline), 100bps hit to margins or US$900m.
- Good effort to articulate supply chain reshuffle for products sold in US: iPhone from India, the rest from Vietnam. Beyond June, no quantification of impact on costs and demand.
- Despite low 5-8% EPS growth, the stock is expensive due to steady Services growth and large cash returns to shareholders. Trading at 29x FY25 EPS, 27x FY26.
Starz RemainCo Deep Dive
Lions Gate Entertainment will spin off its 87.2% stake in its studio business (Lionsgate Studios, ticker “LION”) from its Starz media networks division, creating two independent public companies, on May 6, 2025.
The RemainCo will be named Starz and trade under the ticker STRZ.
- Starz is a premium subscription video service that operates both a traditional premium cable channel and a modern streaming platform (OTT).
If I Wanted to Bet on Humanoids, I’d Buy Meta.
The commercialization of general purpose humanoid robots could be the most disruptive innovation that the next few decades have in store for us.
It would be a new computing platform that would by far surpass everything that we have seen in personal and mobile computing.
AI would be liberated from cyberspace to real space. Instead of shifting bits and bytes around, it would be moving physical objects.
Amazon 1Q’25 Update
- While Amazon’s 3P business usually grows faster than 1P, both 1P and 3P retail business grew at similar rate in 1Q’25.
- Ads revenue continued its momentum at 19% growth YoY which was higher than both Google and Meta.
- After growing at ~19% YoY for the last three consecutive quarters, AWS growth decelerated this quarter to 17%.
Hyperscale Capex Is Maintained or Increased No Cuts or Postponement Capacity Constrain at AMZN GOOG
- What did hyperscalers say on Capex in March conf calls? Amazon: nothing. Google: maintained. Meta: increase. Microsoft: maintained. No Capex cuts or postponement.
- At the opposite, Amazon and Google mention capacity constraints, revenues could be higher with more capacity. All firms mention that AI is a critical building block of future growth.
- Financial statements show 1) improving operating margins, 2) higher capex but still higher free cash flow. Positive for NVIDIA Corp (NVDA US) and Taiwan Semiconductor (TSMC) (2330 TT) .
Procter & Gamble (P&G) Looking To Turbocharge Retail Reach Through Channel Diversification But Will It Work?
- Procter & Gamble’s recent earnings results present a mixed picture of achievements and challenges.
- The company’s organic sales for the third quarter grew by 1%, which indicates modest growth.
- This increase was broadly underpinned by pricing strategies that added one percentage point to organic sales growth, while product volume and mix remained consistent with the prior year.
[Alert] Buy Lionsgate Entertainment
On a sum-of-the-parts basis, LION and STRZ are worth significantly more than is reflected in LGF.A’s stock price.
At the close today, investors could buy 1 share of Lionsgate Entertainment (LGF.A) for $8.90. On May 6, that investor will receive 1.12 shares of LION and 1.12 shares of STRZ.
I estimate LION is worth $11 and STRZ is worth $1.71. As such, it looks like there is ~60% upside
Whirlpool Corporation: Will The North American Market Dynamics Reflect Its Capability To Adapt To & Capitalize On Market Changes?
- Whirlpool Corporation has demonstrated a mixed financial performance in its latest earnings report, reflecting strategic advantages and challenges in the current macroeconomic environment.
- Organic growth of 2% marked a modest improvement, driven largely by strong performance in its Smart Design Asia Global and Major Domestic Appliance Asia sectors.
- The company achieved an EBIT margin of nearly 6%, reflecting successful pricing strategies and cost reductions, which helped weather macroeconomic headwinds.
Gilead Sciences: Cell Therapy Adoption & Expansion to Strengthen Its Competitive Position n Its Domain!
- Gilead Sciences delivered a mixed performance in their latest financial results, reflecting both strengths and challenges across their portfolio.
- The company reported overall product sales of $6.6 billion for the first quarter, a 1% decline year-over-year, primarily attributable to a significant decrease in sales of Veklury, a COVID-19 treatment, which was down 45%.
- The core business, however, excluding Veklury, demonstrated growth with a 4% increase, driven largely by their HIV segment and liver disease treatments.
Comcast: Will The Management’s Focus on Wireless Expansion and Converged Offerings Help Continue Its Market-Beating Run?
- Comcast Corporation’s latest earnings offered insights into both the opportunities and challenges the company faces in various business segments.
- On the positive side, Comcast highlighted robust performance in several growth areas, particularly in residential broadband, wireless, and theme parks.
- The strategic shift towards these growth segments is a central part of the company’s business model.
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