Raphael Stevens

Yum Brands on Wednesday reported quarterly earnings and revenue that missed analysts’ expectations as KFC, Taco Bell and Pizza Hut all reported weaker-than-expected sales.
Yum is the third global restaurant giant to report disappointing revenue for the last three months of 2023 after Starbucks and McDonald’s both missed Wall Street’s expectations.

KFC and Taco Bell restaurants along 118th Avenue in Edmonton, on January 21, 2024, in Edmonton, Alberta, Canada.
Artur Widak | Nurphoto | Getty Images

Yum Brands on Wednesday reported quarterly earnings and revenue that missed analysts’ expectations as KFC, Taco Bell and Pizza Hut all reported weaker-than-expected sales.
Yum is the third global restaurant giant to report disappointing revenue for the last three months of 2023. Starbucks and McDonald’s both missed Wall Street’s expectations, citing the Israel-Hamas war among their headwinds.

Yum’s stock fell more than 1% in premarket trading.
Here’s what Yum Brands reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Earnings per share: $1.26 adjusted vs. $1.40 expected
Revenue: $2.04 billion vs. $2.11 billion expected

Yum reported fourth-quarter net income of $463 million, or $1.62 per share, up from $371 million, or $1.29 per share, a year earlier.
Excluding items, the restaurant giant earned $1.26  cents per share. The company said its quarterly tax rate fluctuated, dragging its earnings down by 23 cents per share.
Net sales rose 1% to $2.04 billion. The company’s global same-store sales increased 1% as well.

Pizza Hut reported same-store sales declines of 2%, missing expectations of 0.6% growth. The pizza chain’s U.S. same-store sales shrank 4%, while its international same-store sales were flat.
KFC’s same-store sales rose 2%, coming in below StreetAccount estimates of 4.7%.
Even Taco Bell, usually the gem of Yum’s portfolio, underperformed Wall Street’s expectations. The Mexican-inspired chain reported same-store sales growth of 3%, missing StreetAccount estimates of 3.8%. A year earlier, the chain reported same-store sales growth of 11%, fueled by the permanent return of its cult-favorite Mexican Pizza.
In 2024, Yum plans to pass several major milestones for its global footprint. Yum’s footprint will surpass 60,000 locations, CEO David Gibbs said in a statement, including a KFC footprint of more than 30,000 restaurants and a Pizza Hut tally of beyond 20,000. More

ESPN, Fox and Warner Bros. Discovery plan to launch a joint sports streaming service later this year.
The platform, which will be owned by a newly formed company with its own leadership team, does not yet have a name or price.
The product will be a skinnier bundle of linear networks than a standard cable offering, specifically tailored for sports fans.

A FOX Sports TV camera operator during the week 5 NFL game between the Atlanta Falcons and the Carolina Panthers at Mercedes-Benz Stadium on October 11, 2020 in Atlanta, Georgia.
David J. Griffin | Icon Sportswire | Getty Images

Walt Disney’s ESPN, Fox and Warner Bros. Discovery plan to launch a joint sports streaming service this fall, giving consumers a new way to access marquee live sports for the first time, the companies said Tuesday.
The platform, which will be owned by a newly formed company with its own leadership team, does not yet have a name or a price. Disney, Fox and Warner Bros. Discovery will each own a one-third stake.

Consumers would be able to subscribe directly via a new app. Subscribers would also have the ability to bundle the product with the companies’ streaming platforms Disney+, Hulu and Max.
The product will be a skinnier bundle of linear networks than a standard cable offering, specifically tailored for sports fans. It will consist of all the broadcast and cable networks owned by Disney, Fox and Warner Bros. Discovery that carry sports, along with ESPN+. While no price has been determined, a logical starting point could be $45 or $50 per month, according to a person familiar with the matter, who asked not to be named because the discussions around the service have been private.
From Disney, that includes ESPN and its sister networks, such as ESPN2, ESPNU, SECN, ACCN, ESPNEWS, as well as the ABC broadcast network. Warner Bros. Discovery’s networks that showcase sports are TNT, TBS and TruTV. Fox will include the Fox broadcast station along with FS1, FS2 and BTN.
“The launch of this new streaming sports service is a significant moment for Disney and ESPN, a major win for sports fans, and an important step forward for the media business,” Disney CEO Bob Iger said in a statement. “This means the full suite of ESPN channels will be available to consumers alongside the sports programming of other industry leaders as part of a differentiated sports-centric service.”
The launch of the product will not stop ESPN from offering a full direct-to-consumer streaming product, which Disney is still researching and remains on schedule to debut by 2025, according to a person familiar with the matter. ESPN has previously said it plans on releasing that product this year or next year.

The competitors expect to form the joint service at a time when the value of sports media rights is spiking, but viewers have moved away from watching on traditional cable.
Comcast’s NBCUniversal and Paramount Global weren’t approached to be a part of the joint venture, according to people familiar with the matter. NBCUniversal likely would have balked at the idea of unbundling its sports networks from its other entertainment cable channels, one of the people said.
Still, the new skinny bundle may chip away at the number of cable subscribers for both NBCUniversal and Paramount Global. Both companies offer streaming services — Peacock and Paramount+ — that offer additional sports, including live National Football League games. That may mitigate potential revenue losses for NBCUniversal and Paramount Global.
Disney, in particular, has sought new ways to reinvent the sports business and ESPN, including searching for strategic partners such as the National Football League and the National Basketball League.Don’t miss these stories from CNBC PRO: More

Ford is rethinking its electric vehicle strategies, CEO Jim Farley said Tuesday.
The Detroit automaker previously confirmed plans to delay or cut $12 billion in spending on all-electric vehicles.
Farley reiterated the company still believes EVs will grow, but noted widespread adoption for mass-market consumers won’t happen until the costs are more in line with traditional vehicles.

A Ford Mustang Mach-E GT compact sports utility vehicle during the 2022 New York International Auto Show in New York on April 14, 2022.
Michael Nagle | Bloomberg | Getty Images

DETROIT — Ford Motor is rethinking its electric vehicle strategies, including “reassessing” the need for vertical integration of batteries, CEO Jim Farley said Tuesday.
The Detroit automaker previously confirmed plans to delay or cut $12 billion in spending on all-electric vehicles, but the comments made Tuesday are the most detailed about Ford’s changing plans for EVs, sales of which are growing at a slower-than-expected rate.

“One of the things we’re taking advantage of in taking some timing delays is rationalizing the level and timing of our battery capacity to match demand and actually reassessing the vertical integration that we’re relying on, and betting on new chemistries and capacities,” Farley said during the automaker’s fourth-quarter earnings call.
Farley reiterated the company still believes EVs will grow, but noted widespread adoption for mass-market consumers won’t happen until the costs are more in line with traditional vehicles. EVs are typically thousands of dollars more expensive than their gas-powered counterparts.
Ford Chief Financial Officer John Lawler said in addition to reassessing the vertical integration in new battery chemistries, the company is further looking into adjusting installed production capacity to match demand and potentially delaying next-generation EVs to “to ensure they meet our criteria for profitability, given the new market reality.”
The company’s EV business, known as Model e, lost $4.7 billion last year, including $1.57 billion during the fourth quarter of 2023, offset by profits in the company’s fleet and traditional internal combustion engine units. Both businesses earned more than $7 billion each last year.
Lawler said Tuesday that the unit will have to stand on its own “sooner rather than later.”

He also said the company is pulling a target for its EV unit that called for 8% margin by 2026. The company had already set a target of two million vehicles sold annually by that time.
As Ford pulls back and reevaluates the EV business, it intends to lean in on sales of hybrid vehicles, specifically trucks. The company expects its hybrid sales to increase 40% this year. It sold 133,743 hybrid vehicles in the U.S. in 2023.Don’t miss these stories from CNBC PRO: More

Chipotle easily beat earnings expectations and topped revenue estimates.
The chain’s same-store sales beat expectations.
Chipotle said foot traffic rose in the quarter, bucking an industry-wide trend of declining visits.

People visit a Chipotle restaurant in Miami on Feb. 9, 2022.
Joe Raedle | Getty Images

Chipotle Mexican Grill on Tuesday posted quarterly earnings and revenue that beat analysts’ expectations as more customers visited its restaurants.
Shares of the company rose more than 2% in extended trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Earnings per share: $10.36 adjusted vs. $9.75 expected
Revenue: $2.52 billion vs. $2.49 billion expected

Chipotle reported fourth-quarter net income of $282.1 million, or $10.21 per share, up from $223.7 million, or $8.02 per share, a year earlier. The company said higher beef, produce and queso costs weighed on margins.
Excluding certain items, the burrito chain earned $10.36 per share.
Net sales rose 15.4% to $2.52 billion.
The company’s same-store sales rose 8.4%, beating StreetAccount estimates of 7.1%. Executives said sales grew across every consumer income level.

Chipotle said foot traffic rose 7.4% in the quarter, bucking an industry-wide trend of declining visits. Restaurant giants McDonald’s and Starbucks both reported traffic declines for the last three months of the year.
Chief Financial Officer Jack Hartung said the return of carne asada contributed to the quarter’s strong same-store sales growth. The chain has also been making strides to improve productivity inside its restaurants by increasing training and adding more employees to its make lines.
“Throughput is one of those activities in an organization our size, it’s like taking a boulder and starting to push it downhill. It starts really, really slow, but once it starts to pick up speed, it just continues to build momentum,” Chipotle Chief Operating Officer Scott Boatwright told CNBC.
Additionally, Chipotle’s sales received a boost from a 3% menu price increase it implemented in October.
The company opened 121 new locations during the quarter.
Looking to 2024, Chipotle is forecasting full-year same-store sales growth in the mid-single-digit range and plans to open between 285 and 315 new locations. Hartung noted “unusually cold weather” hurt sales in January, but said the underlying demand for the company’s burritos and bowls remains strong.
The chain is planning to release one to two limited-time menu items this year. Additionally, its marketing will highlight its core menu.
Also in 2024, Chipotle is planning an in-restaurant test of a robot that scoops avocados, called the Autocado, and an automated make line for its burrito bowls and salads. Both robots have already been tested in the company’s innovation center. More

Ford beat Wall Street’s top- and bottom-line expectations for the fourth quarter while forecasting better-than-expected results for 2024.
The company’s forecast for 2024 includes adjusted earnings before interest and taxes of between $10 billion and $12 billion.
The automaker also announced a special dividend of 18 cents per share in addition to a first-quarter regular dividend of 15 cents per share.

Ford CEO Jim Farley poses for a photo before announcing at a press conference that Ford Motor Company will be partnering with the world’s largest battery company, China-based Contemporary Amperex Technology, to create an electric vehicle battery plant in Marshall, Michigan, on Feb. 13, 2023, in Romulus, Michigan.
Bill Pugliano | Getty Images

DETROIT — Ford Motor beat Wall Street’s top- and bottom-line expectations for the fourth quarter while forecasting better-than-expected results for 2024.
The company’s full-year forecast calls for adjusted earnings before interest and taxes, or EBIT, of between $10 billion and $12 billion, adjusted free cash flow of $6 billion to $7 billion and capital spending of $8 billion to $9.5 billion.

Analysts had expected Ford’s adjusted earnings guidance to be roughly $9 billion to $11 billion, according to investor notes from several analysts.
The automaker also announced a special dividend of 18 cents per share in addition to a first-quarter regular dividend of 15 cents per share. The dividends are payable March 1 to shareholders of record at the close of business Feb. 16.
Shares of Ford were up roughly 6% during after-hours trading, adding to a 4.1% increase during trading Tuesday to close at $12.07.
Here’s how Ford did during the fourth quarter compared with what Wall Street expected, based on average estimates compiled by LSEG, formerly known as Refinitiv:

Earnings: 29 cents per share adjusted vs. 14 cents per share adjusted, expected
Automotive revenue: $43.2 billion vs. $40.12 billion expected

Ford CEO Jim Farley described last year as a “foundational year” for the automaker, specifically calling out several cost improvements, high gross margin on its hands-free BlueCruise highway system as well as hybrid vehicles, which the company expects to increase sales of by 40% this year.

“It was a solid year, but I want to be really clear we are nowhere near our earnings potential for Ford Motor Co.,” Farley told investors Tuesday. “We are really positioned well this year for growth and profitability, for revenues as well.”
For the fourth quarter, Ford reported a net loss of $526 million, or 13 cents per share, compared to a profit of $1.29 billion, or 32 cents per share, during the same period a year earlier. Adjusting for one-time items, the company reported earnings per share of 29 cents.
Overall revenue during the period increased about 4% to $46 billion, up from about $44 billion a year earlier. Adjusted EBIT declined 59% to $1.05 billion from the year-ago period.
Adjusted earnings of Ford’s traditional business, known as Ford Blue, were down about 48% during the fourth quarter compared to a year earlier to $813 million. Its Ford Pro commercial business earned $1.81 billion, up 25% from a year earlier. Ford’s Model e electric vehicle unit posted a $1.57 billion loss from October through December, more than doubling a loss of $631 million during the fourth quarter of 2022.

Stock chart icon

Ford’s stock during the past year.

For the full year 2023, Ford reported $10.42 billion in adjusted EBIT, in line with 2022; revenue of $176.2 billion, up 11% compared to the prior year; and adjusted free cash flow of $6.8 billion, down $2.3 billion from the year earlier. Net income was $4.33 billion, up from a $2.15 billion loss in 2022.
The company’s traditional and fleet businesses assisted in offsetting $4.7 billion in losses for its EV business.
Ford in November lowered its full-year forecast in light of contract negotiations with the United Auto Workers union.
Ford Chief Financial Officer John Lawler said Tuesday that the company continues to look for ways to offset increasing labor costs due to the new UAW contract, which the company said is expected to cost $8.8 billion over the life of the deal, ending in April 2028. Ford has already announced plans to delay or cut spending on several EV products.
“All of our EV teams are ruthlessly focused on cost and efficiency in our EV products because the ultimate competition is going to be the affordable Tesla and the Chinese [automakers]” Farley said.
Ford is expected to face headwinds this year, including lower vehicle prices, warranty costs and continued losses for all-electric vehicles. Bright spots are expected to be its Ford Pro fleet unit and traditional Ford Blue internal combustion engine business.
— CNBC’s Michael Bloom contributed to this report. More

The NTSB’s preliminary report comes about a month after a door plug blew out of an Alaska Airlines’ 737 Max 9.
Boeing’s CEO said on Jan. 31 that his company “caused” the issue.
The FAA has halted Boeing’s planned production expansion of the 737 Max.

In this photo released by the National Transportation Safety Board, investigator-in-charge John Lovell examines the fuselage plug area of Alaska Airlines Flight 1282 in Portland, Oregon, on Jan. 7, 2024.
National Transportation Safety Board via AP

Bolts appeared to have been missing from a door plug that blew out midair on a Boeing 737 Max 9 operated by Alaska Airlines last month, according to a new report from the National Transportation Safety Board.
The Jan. 5 accident left a gaping hole in the side of the fuselage as the plane full of passengers climbed out of Portland, Oregon, and was flying at about 16,000 feet. The panel that blew out is used to plug an unused emergency exit.

“Overall, the observed damage patterns and absence of contact damage or deformation around holes associated with the vertical movement arrestor bolts and upper guide track bolts in the upper guide fittings, hinge fittings, and recovered aft lower hinge guide fitting indicate that four bolts that prevent upward movement of the MED plug were missing before the MED plug moved upward off the stop pads,” the NTSB said in its preliminary report, released Tuesday.

Arrows pointing outwards

Source: NTSB

The preliminary report into Flight 1282 provides the most detail yet about what went wrong before the aircraft was handed over to Alaska Airlines late last year.
The fuselage, including the door plug, both produced by Spirit AeroSystems, arrived at Boeing’s Renton, Washington, plant on Aug. 31. A day later a repair was logged for five damaged rivets, a job that required the bolts to be removed, the NTSB said.
“The investigation continues to determine what manufacturing documents were used to authorize the opening and closing of the left [door] plug during the rivet rework,” the NTSB said.
“Boeing appreciates the U.S. National Transportation Safety Board’s work and will review their findings expeditiously. And we will continue to cooperate fully and transparently with the NTSB and the FAA investigations,” the company said in a statement.

The accident prompted a grounding of the Max 9 by the Federal Aviation Administration for much of last month. Most of the Max 9 planes in the U.S. have returned to service.
Boeing’s CEO, Dave Calhoun, under pressure to address manufacturing defects that have delayed aircraft deliveries, has said the company is responsible for what went wrong.
“We caused the problem,” Calhoun said on a Jan. 31 earnings call. “Over these last few weeks, I’ve had tough conversations with our customers, with our regulators, congressional leaders and more. We understand why they are angry, and we will work to earn their confidence.”
The FAA is also auditing Boeing’s production lines and last month said it would stop the company from increasing output of the bestselling Max jet beyond the current 38 a month it is producing until regulators are satisfied with its manufacturing processes.
The Jan. 5 accident occurred just as Boeing was trying to ramp up output.
“As we review the NTSB’s preliminary report, we remain focused on working closely with Boeing and our regulators on continuous improvement in our processes and meeting the highest standards of safety, quality and reliability,” Spirit said in a statement.
Don’t miss these stories from CNBC PRO: More