Raphael Stevens

Southwest’s meltdown earlier this month disrupted travel for tens of thousands of customers.
The airline had been struggling with understaffing for months.
The carrier posted a third-quarter profit thanks to a boost from federal payroll support.

Passengers check in for a Southwest Airlines flight at Orlando International Airport in Orlando, Florida, U.S., October 11, 2021.
Joe Skipper | Reuters

Southwest Airlines on Thursday said mass flight cancellations and delays that disrupted travel for tens of thousands of customers earlier this month cost it $75 million.
Dallas-based Southwest canceled more than 2,000 flights between Oct. 8 and Oct. 13. It blamed the meltdown on bad weather in Florida and air traffic control issues, which was compounded by staffing shortages. Its closest rivals, including those in Florida, had relatively minimal cancellations.

The hit came from flight cancellations, customer refunds and “gestures of goodwill.”
The airline reported a third-quarter profit of $446 million on Thursday thanks to a boost from federal aid and voluntary leaves of absence by employees, but it said staff shortages led to operational problems that hurt its bottom line.
“Our active (versus inactive) and available staffing fell below plan and, along with other factors, caused us to miss our operational ontime performance targets, and that created additional cost headwinds,” Southwest CEO Gary Kelly said. That along with a surge in Covid-19 cases led to a revenue hit of $300 million, he said.
Here’s how Southwest performed in the third quarter compared with what Wall Street expected, based on average estimates compiled by Refinitiv:

Adjusted results per share: a loss of 23 cents versus an expected loss of 27 cents.

Total revenue: $4.68 billion versus expected $4.58 billion.

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Incorporated in 2016, Sphere started out as a real-time question and answer app that involved micropayments before it pivoted to become more of a group chat app.
It raised around $30 million over three funding rounds from investors including Index Ventures, Airbnb co-founder Brian Chesky, Tinder co-founder Sean Rad and Sequoia venture capitalist Mike Moritz.
“The Sphere team’s expertise and leadership’s passion for finding ways to help people connect will help accelerate our Communities, DM, and Creators roadmaps,” said Twitter’s vice president of engineering, Nick Caldwell.

Jack Dorsey creator, co-founder, and Chairman of Twitter and co-founder & CEO of Square arrives on stage at the Bitcoin 2021 Convention, a crypto-currency conference held at the Mana Convention Center in Wynwood on June 04, 2021 in Miami, Florida.
Joe Raedle | Getty Images

LONDON — Twitter announced that it’s acquired a chat app called Sphere, which was co-founded by British serial entrepreneur Nick D’Aloisio.
Incorporated in 2016, Sphere started out as a real-time question and answer app that involved micropayments before it pivoted to become more of a group chat app.

Between 2017 and 2019, it raised around $30 million from investors including Index Ventures, Airbnb co-founder Brian Chesky, Tinder co-founder Sean Rad and Sequoia venture capitalist Mike Moritz.
“It’s really important and necessary in order to achieve impact to partner with the right companies at the right time that have similar visions and ideas,” D’Aloisio told CNBC on a call.
Roughly 500,000 people used the first version of the app, D’Aloisio said, but he declined to comment on the latest user numbers.

The terms of the deal, which was announced Wednesday and will see approximately 20 Sphere employees join Twitter, have not been disclosed. But D’Aloisio claimed “everyone is happy.”
Sphere said in a blogpost that it will be “winding down” its standalone product in November as a result of the acquisition. “Obviously Sphere was our own thing and that’s no longer relevant to what Twitter is trying to achieve,” D’Aloisio said.

The entrepreneur added that he and his team will work alongside Twitter employees to try to take the “vision” they had at Sphere and “integrate that into various parts” of Twitter.  

Nick Caldwell, vice president of engineering at Twitter, announced the acquisition of Sphere via his company’s social network.
“The Sphere team’s expertise and leadership’s passion for finding ways to help people connect will help accelerate our Communities, DM, and Creators roadmaps,” he said.
D’Aloisio sold his first start-up, a mobile news app called Summly, to Yahoo for $30 million in 2013 when he was 17 years old. He spent two and a half years as a product manager at Yahoo before becoming an “entrepreneur in residence” at Airbnb, where he worked with Chesky.
He started Sphere while studying computer science and philosophy at the University of Oxford, which is where he met his co-founder, Tomas Halgas.
Over the years, Twitter has acquired several other U.K. start-ups with the best-known one being TweetDeck. It has also bought artificial intelligence firms Magic Pony Technology, Fabula.ai and Aiden.ai.

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Former Tesla president Jon McNeill told CNBC on Thursday he wouldn’t bet against the company.
Currently not a Tesla investor, McNeill said the stock is “priced to perfection” right now,
McNeill, now a venture capitalist, predicts the EV industry is at the beginning of what will be a “multi-decade growth story.”

The former president of electric vehicle giant Tesla said Thursday he would not bet against the company, noting that it’s emerging as a “formidable competitor” to automakers around the world after the company beat third-quarter earnings expectations.
Currently not a Tesla investor, Jon McNeill told CNBC’s “Squawk Box” the stock is “priced to perfection” right now, but he said he still drives Teslas. McNeill, also a former Lyft COO, highlighted strong gross margins at the company.

“The gross margins are approaching 30%, just to put that in perspective, that is three times the gross margin level at GM, and about six times the gross margin level of Ford,” McNeill said.
Despite supply chain issues, Tesla saw sales rise to record breaking numbers at the company, even as other automakers struggle to keep up with their own demand.
“We’re up more than 70% year-over-year versus GM and Ford, which are seeing declines of around 30% year-over-year,” McNeill said, listing the multiple reasons he would not bet against Tesla. “They’re sitting now on $16 billion cash.”
Drivers who order vehicles from Tesla often have to wait months before receiving the product, speaking to the demand for the electric vehicles but also raising production concerns among investors.
With a new factory in Shanghai and two more expected to open in Texas and Berlin, the company has “proven they can open more than one factory now and produce at volume,” McNeill said, noting that Tesla’s Shanghai factory is producing so much that they’re exporting back to North America. “So I think the thing to keep an eye on here is their ability to increase production capacity to meet demand,” he added.

Other automakers introducing hybrid or electric vehicles of their own just “opens more eyes to EVs,” according to McNeill. “Tesla’s got a dominant share in the U.S., they’re at 65% market share in the U.S., 21% worldwide, but I think that’s in the context of Tesla only having 1% market share in the global car market and EVs only have 4%.”
McNeill, currently CEO of DVx Ventures, predicts the EV industry is at the beginning of what will be a “multi-decade growth story” for electric vehicles around the world.
Shares of Tesla — up more than 20% in 2021 and up 100% over the past 12 months — slipped nearly 1.5% in Thursday’s premarket.

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Crocs’ fiscal third-quarter earnings and sales trounced analysts’ expectations.
The shoe retailer also raised it outlook for the full year, saying it has worked to minimize any impact from the global supply chain disruption.
Crocs now sees fiscal 2021 revenue growing between 62% and 65% from 2020 levels, compared with a prior range of 60% to 65%.

Footwear is offered for sale at a Crocs retail store on July 22, 2021 in Chicago, Illinois.
Scott Olson | Getty Images

Shares of Crocs soared in extended trading Thursday after the retailer reported fiscal third-quarter earnings and revenue that exceeded analysts’ expectations, as demand for its shoes remained strong.
Crocs also raised it outlook for the full year, saying it has worked to minimize any impact from the global supply chain disruption. Despite manufacturing facilities in Vietnam being temporarily shut down in recent months, the retailer said it’s shifted production and leveraged air freight to transport goods.

Its stock was recently up more than 11%, having rallied more than 115% year to date. Shares had closed Wednesday down nearly 5%.
Here’s how Crocs did in the three-month period ended Sept. 30 compared with what analysts were anticipating, using a survey of analysts by Refinitiv:

Earnings per share: $2.47 adjusted vs. $1.88 expected
Revenue: $626 million vs. $610 million expected

Third-quarter net income jumped to $153.5 million, or $2.42 per share, from $61.9 million, or 91 cents per share, a year earlier. Excluding one-time items, the company earned $2.47 per share, well ahead of the $1.88 that analysts had predicted.
Revenue soared 73% to $626 million from $362 million a year earlier. That topped expectations for $610 million.
Crocs said its direct-to-consumer sales were up 60.4% in the quarter, while wholesale revenue rose 88.2%. Digital sales climbed 68.9%, accounting for 36.8% of total sales, compared with 37.7% a year earlier.

For the full year, Crocs now sees revenue growing between 62% and 65% from 2020 levels, compared with a prior range of 60% to 65%.
In fiscal 2022, it said sales should be up more than 20% year over year.
“Globally, our teams are managing through the supply chain disruptions to mitigate the impact on our business,” CEO Andrew Rees said in prepared remarks. “Despite the temporary disruptions, we expect 2022 revenues to grow … fueled by the strength of our brand and consumer demand globally.”
Find the full earnings press release from Crocs here.

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American said it expects its fourth-quarter revenue will fall about 20% from 2019.
Revenue improved sharply from last year.
The carrier said it expects its capacity to be down 11% to 13% in the fourth quarter of 2021.

American Airlines on Thursday reported a $169 million profit for the third quarter thanks to more than $990 million in federal payroll support.
Revenue for the quarter totaled $8.97 billion down about 25% from the same period of 2019 but up from the $3.17 billion American brought in a year ago. That was ahead of analysts’ expectations of sales of $8.94 billion. Without one-time items, like government payroll support, American lost 99 cents per share, less than $1.04 per-share loss analysts expected.

“While we don’t like reporting losses, this was our smallest quarterly loss since the pandemic began,” American’s CEO Doug Parker and the carrier’s president, Robert Isom, wrote in a note to employees.
American’s shares were up 1.2% in premarket trading.
For the fourth-quarter, American expects its revenue to fall by about 20% from 2019, when it generated $11.3 billion. It also said its capacity will be down 11% to 13% compared with two years ago.
The Fort Worth, Texas-based airline forecast pretax margins, excluding special items, in the fourth quarter to be between negative 16% and negative 18%.

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Boston Celtics player Enes Kanter tweeted a video in support of independence for Tibet.
Not long after, highlights from the Celtics’ game against the Knicks were made unavailable on the Tencent Sports app.
In a video posted on Twitter, Kanter called Chinese president Xi Jinping a “brutal dictator” and said he supports Tibetan people’s “cause for freedom.”

Enes Kanter #11 of the Boston Celtics handles the ball against the Portland Trail Blazers at The Arena at ESPN Wide World Of Sports Complex on August 02, 2020 in Lake Buena Vista, Florida.
Mike Ehrmann | Getty Images Sport | Getty Images

GUANGZHOU, China — The National Basketball Association could once again face a backlash in China after Boston Celtics player Enes Kanter tweeted a video in support of independence for Tibet.
Not long after the tweet on Wednesday, highlights from the Celtics’ game against the Knicks were made unavailable on the Tencent Sports app. Upcoming Celtics games also appear to be unavailable for live stream.

China-based Tencent declined to comment when contacted by CNBC.
In a video posted on Twitter, Kanter called Chinese President Xi Jinping a “brutal dictator” and said he supports Tibetan people’s “cause for freedom.” The NBA star, who has commented on political issues before, repeated the phrase “free Tibet” three times while wearing a t-shirt with the Dalai Lama on it.
“Under the Chinese government’s brutal rule, Tibetan peoples’ basic rights and freedoms are non-existent,” Kanter said. China’s Ministry of Foreign Affairs was not immediately available for comment.
Chinese communist troops took control over Tibet in 1950. China has held that Tibet has long been part of its territory and that the military action was part of a peaceful liberation of the region. China has denounced the current Dalai Lama, who Buddhists see as their spiritual leader and who is currently in exile in India, as a separatist. The Dalai Lama has denied he is a separatist.
In June last year, independent United Nations experts “raised their concerns regarding a range of issues of grave concern” including the “collective repression of the population, especially religious and ethnic minorities, in Xinjiang and Tibet.”

China has repeatedly said that issues related to Tibet, the northwest region of Xinjiang, and Hong Kong are not human rights issues. China maintains that these are “internal affairs” and other countries should not interfere.
The Boston Celtics and NBA China were not immediately available for comment when contacted by CNBC.
On Chinese Twitter-like service Weibo, one Boston Celtics fan account with 615,000 followers said they would no longer post about the team.
The NBA, the most popular U.S. sports league in China, has faced backlash before over sensitive issues.
In 2019, the then-Houston Rockets General Manager Daryl Morey sent a tweet in support of anti-government protests in Hong Kong. He later apologized. But the incident caused a major fallout including broadcasters suspending the showing of Rockets games and commercial partners cutting ties with the team.
Kanter has previously been critical of Turkish President Recep Tayyip Erdogan, and the government reportedly revoked his Turkish passport in 2017.

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