Raphael Stevens

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    in Business

    Space company Momentus, once valued at more than $1 billion, is running dangerously low on money

    Momentus, once valued at more than $1 billion before going public via a SPAC in 2021, abandoned plans for its next mission, which was to fly satellite customers in March.
    The company cited its “inability to support continuing operations for the expected launch date as a result of the Company’s limited liquidity and cash balance.”
    Momentus pitched itself as a “last mile delivery” service for spacecraft, targeting the market for small satellites with its orbital transfer vehicle.

    An artist’s rendering of a Momentus Vigoride transfer vehicle deploying a satellite in orbit.

    Space company Momentus warned shareholders in a securities filing on Friday that the company is running out of money and does not have a financial lifeline.
    Momentus, once valued at more than $1 billion before going public via a special purpose acquisition company in 2021, abandoned plans for its next mission, which was to fly satellite customers in March. The company cited its “inability to support continuing operations for the expected launch date as a result of the Company’s limited liquidity and cash balance.”

    Momentus already laid off about 20% of its workforce at the end of December to reduce costs.
    Despite the cuts, Momentus said its “ability to continue to fund operations for the next few weeks and months will be dependent on its ability to raise equity capital or engage in a strategic transaction.”
    It noted it “does not have definitive commitments at this time.”
    Shares of Momentus fell more than 30% during trading on Friday, with its market value sliding to nearly $5 million. The company received another delisting warning from the Nasdaq earlier this month, having avoided a delisting last year by performing a reverse stock split.

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    Momentus was among a dozen or so space companies that debuted during the SPAC frenzy. The company was already on rocky footing before it went public, with delayed missions after the departure of its founder and former CEO, its valuation cut in half to less than $600 million and an SEC settlement due to allegations of falsifying results from a prototype spacecraft test.

    The company has flown four missions to date, deploying 17 satellites for customers. It pitched itself as a “last mile delivery” service for spacecraft, targeting the market for small satellites, with its central product the Vigoride orbital transfer vehicle, or “space tug,” designed to deliver satellites from a rocket to a specific orbit.Don’t miss these stories from CNBC PRO: More

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    in Business

    Delta more than doubles fourth-quarter profit, but trims 2024 earnings forecast

    Delta capped a year of strong travel demand, especially for international travel.
    Fourth-quarter profit doubled, and CEO Ed Bastian said demand is high.
    The airline and other carriers, however, have faced higher costs throughout 2023.

    Delta Air Lines closed out the year by doubling its quarterly profit as travel demand, particularly for international trips, helped drive record revenue in 2023. CEO Ed Bastian said continued strong travel demand could boost earnings this year.
    Still, the company’s full-year profit outlook was below a previous forecast, and the stock fell 5% in premarket trading.

    The airline on Friday forecast adjusted earnings per share of between $6 and $7 for 2024, below the more than $7 a share the carrier predicted last year. Delta posted adjusted earnings of $6.25 a share in 2023.
    “Business is going great. Just go to any airport,” Bastian told CNBC in an interview.
    Delta said it expects revenue in the first quarter of 2024 to increase 3% to 6% over the prior year period. The carrier forecast earnings per share of between 25 cents and 50 cents, within the range analysts are projecting, according to LSEG, formerly known as Refinitiv.
    The winter is typically one of the slowest periods for air travel. Airlines have also been navigating cooling fares and higher expenses like fuel and labor.
    Delta is the first of the major U.S. carriers to report fourth-quarter results.

    Here’s how the company performed in the three months ended Dec. 31 compared with Wall Street expectations based on consensus estimates from LSEG:

    Adjusted earnings per share: $1.28 vs. $1.17 expected.
    Adjusted revenue: $13.66 billion vs. $13.52 billion expected.

    Delta reported $2.04 billion in net income for the last three months of 2023, up from $828 million a year ago. Revenue rose 6% to $14.22 billion from a year earlier.
    Stripping out one-time items, Delta posted adjusted revenue of of $13.66 billion, slightly ahead of LSEG estimates. Adjusted per-share earnings of $1.28 topped analysts’ estimates for $1.17 a share in the fourth quarter.
    Delta’s president, Glen Hauenstein, said in a news release that the carrier has seen strong demand for international travel that has outpaced U.S. flight revenue, but there has been “a positive inflection” for domestic travel of late. Some carriers have struggled with oversupply of domestic flights in recent months, forcing them to discount off-peak fares more than usual.
    Delta and other large U.S. carriers have benefitted from offering sprawling international networks, where many high-priced tickets were sold last year.
    Overall, record numbers of people paid to sit in Delta’s higher-priced cabins like first class or premium economy in the last quarter, driving revenue from premium cabins up 15% during the period, outpacing 10% revenue growth from standard coach seats.
    But the carrier still faces challenges with the aerospace supply chain for parts and repairs, Bastian said.
    “It’s taking longer to fix planes and taking longer to put them back into service,” he said. Aircraft repairs and the parts supply chain is “the biggest area of the business that’s not returned to a pre-pandemic level of performance.”
    The airline industry was rocked in recent days when a door plug blew out of a Boeing 737 Max 9, an Alaska Airlines flight, when the plane was at about 16,000 feet. The Federal Aviation Administration grounded those Boeing planes a day later.
    Delta doesn’t have any Max 9s in its fleet, though it does have dozens of 737 Max 10 aircraft, which the FAA hasn’t yet certified, on order. It isn’t yet clear whether the Alaska incident will mean further delays to the certification of the Max 10s.
    Delta also announced Friday an expected order for 20 wide-body Airbus A350-1000 aircraft, with deliveries starting in 2026. More

  • 125 Shares119 Views

    in Finance

    Citigroup posts $1.8 billion fourth-quarter loss after litany of charges

    Jane Fraser, CEO of Citigroup, attends a hearing on Annual Oversight of Wall Street Firms before the Senate Committee on Banking, Housing, and Urban Affairs in Washington, D.C., the United States, on Dec. 6, 2023. 
    Tom Williams | Cq-roll Call, Inc. | Getty Images

    Citigroup reported fourth-quarter earnings before the opening bell Friday.
    Here’s what the company reported compared with what Wall Street analysts surveyed by LSEG, formerly known as Refinitiv, were expecting:

    Earnings: adjusted 84 cents a share, may not compare with expected 81 cents
    Revenue: $17.44 billion, vs. expected $18.74 billion

    Citigroup CEO Jane Fraser announced plans for a sweeping corporate reorganization in September after previous efforts failed to boost the bank’s results and share price.
    The bank has said it will disclose how much the overhaul will impact headcount and reduce expenses with fourth-quarter results. Wednesday evening, the company said it booked bigger charges in the quarter than previously disclosed.
    Citigroup has already said it would exit municipal bond and distressed debt trading operations as part of the streamlining exercise.
    The third biggest U.S. bank by assets had 240,000 employees as of September, second only to the far more profitable JPMorgan Chase.
    JPMorgan and Bank of America posted results earlier Friday, while Goldman Sachs and Morgan Stanley report Tuesday.
    This story is developing. Please check back for updates. More

  • 175 Shares189 Views

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    Wells Fargo posts higher fourth-quarter profit, helped by higher interest rates and cost cutting

    Wells Fargo shares fell Friday even after fourth-quarter profit rose from a year ago, as the bank warned that net interest income for 2024 could come in significantly lower year over year.
    Here’s what the bank reported versus what Wall Street was expecting based on a survey of analysts by LSEG, formerly known as Refinitiv:

    ·       Revenue: $20.48 billion vs. $20.30 billion expected
    Wells Fargo’s stock fell 1% before the bell.
    Total revenue came in at $20.48 billion for the period. That’s a 2% increase from the fourth quarter of 2022 when Wells Fargo posted $20.3 billion in revenue. The bank also posted net income of $3.45 billion, or 86 cents per share, up slightly from $3.16 billion, or 75 cents a share a year ago.
    Earnings were lowered by a $1.9 billion charge from a FDIC special assessment and a $969 million charge from severance expenses. Wells Fargo also recorded a $621 million, or 17 cents per share, tax benefit.
    “As we look forward, our business performance remains sensitive to interest rates and the health of the U.S. economy, but we are confident that the actions we are taking will drive stronger returns over the cycle,” said Chief Executive Officer Charlie Scharf in a release. “We are closely monitoring credit and while we see modest deterioration, it remains consistent with our expectations.”

    Wells Fargo said net interest income fell 5% from a year ago to $12.78 billion, and warned that the figure could come in 7% to 9% lower for the year from $52.4 billion in 2023. The decline in net interest income was due to lower deposit and loan balances, but offset slightly by higher interest rates, the bank said.
    Provisions for credit losses rose 34% to $1.28 billion from $957 million a year ago, as allowances for credit losses rose for credit card and commercial real estate loans. Wells Fargo said that was partially offset by lower allowances for auto loans.
    Wells Fargo shares are virtually flat this year after rallying more than 19% in 2023. During the period the 10-year Treasury yield topped the 5% threshold in October, before finishing the year below 3.9%.
    This story is developing. Please check back for updates. More

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    JPMorgan Chase profit falls after $2.9 billion fee from regional bank rescues

    The bank said quarterly earnings slipped 15% to $9.31 billion, or $3.04 per share, from a year earlier.
    Excluding the fee tied to the regional banking crisis and $743 million in investment losses, earnings would have been $3.97 per share, according to JPMorgan.

    Jamie Dimon, Chairman of the Board and Chief Executive Officer of JPMorgan Chase & Co., gestures as he speaks during an interview with Reuters in Miami, Florida, U.S., February 8, 2023. 
    Marco Bello | Reuters

    JPMorgan Chase said Friday that fourth quarter profit declined after paying a $2.9 billion fee tied to the government seizures of failed regional banks last year.
    Here’s what the company reported vs. what analysts surveyed by LSEG, formerly known as Refinitiv, expected:

    Earnings per share: $3.04, may not compare with expected $3.32
    Revenue: $39.94 billion, vs. expected $39.78 billion

    The bank said quarterly earnings slipped 15% to $9.31 billion, or $3.04 per share, from a year earlier. Excluding the fee tied to the regional banking crisis and $743 million in investment losses, earnings would have been $3.97 per share, according to JPMorgan.
    Revenue climbed 12% to $39.94 billion, edging out analysts’ expectations.
    JPMorgan CEO Jamie Dimon said full-year results hit a record because the largest U.S. bank by assets performed better than expected on net interest income and credit quality. The bank said it generated nearly $50 billion of profit in 2023, $4.1 billion of which came from First Republic.
    Just as it did in the 2008 financial crisis, JPMorgan emerged larger and more profitable from last year’s regional banking chaos after acquiring First Republic, a midsized lender to wealthy coastal families. The Federal Deposit Insurance Corporation hit large U.S. banks with a special assessment to replenish losses from a fund that helped uninsured depositors of seized regional banks.
    Despite his bank’s performance, Dimon struck a cautious note on the American economy.

    “The U.S. economy continues to be resilient, with consumers still spending, and markets currently expect a soft landing,” Dimon said in the release.
    But deficit spending and supply chain adjustments “may lead inflation to be stickier and rates to be higher than markets expect,” he said. Risks to markets and economies include central banks’ steps to rein in support programs and wars in Ukraine and the Middle East, he added.
    “These significant and somewhat unprecedented forces cause us to remain cautious,” he said.
    While the biggest U.S. bank by assets has navigated the rate environment capably since the Federal Reserve began raising rates in early 2022, smaller peers have seen their profits squeezed.
    The industry has been forced to pay up for deposits as customers shift cash into higher-yielding instruments, squeezing margins. At the same time, rising yields mean the bonds owned by banks fell in value, creating unrealized losses that pressure capital levels.
    Concern is also mounting over rising losses from commercial loans, especially office building debt, and higher defaults on credit cards.
    Beyond guidance on net interest income and loan losses for this year, analysts will want to hear what Dimon has to say about banks’ efforts to tone down coming increases in capital requirements.
    Beaten-down shares of banks recovered in November on expectations that the Fed had successfully managed inflation and could cut rates this year.
    Shares of JPMorgan jumped 27% last year, the best showing among big bank peers and outperforming the 5% decline of the KBW Bank Index.
    This story is developing. Please check back for updates. More

  • 188 Shares159 Views

    in Finance

    Bank of America shares fall after company reports lower fourth-quarter profit, hit by regulatory charge

    Bank of America shares fell about 2% in premarketing trading on Friday after the firm reported declining fourth-quarter earnings amid hefty one-time charges.
    Here’s what the company reported compared with Wall Street expectations:

    Earnings per share: 70 cents adjusted vs. 68 cents per share expected, according to LSEG, formerly known as Refinitiv
    Revenue: $22 billion, adjusted, unclear if the figure is comparable to analyst estimates

    Bank of America said its net income fell to $3.1 billion, or 35 cents per share, in the fourth quarter, down more than 50% from $7.1 billion, or 85 cents per share, a year ago.
    The bank, based in Charlotte, North Carolina, said it was hit by a pretax charge of $1.6 billion in the quarter related to the transition away from the London Interbank Offered Rate. The results also included a special $2.1 billion fee charged by Federal Deposit Insurance Corp. The fee is tied to the failures of Silicon Valley Bank and Signature Bank. Excluding items, the company said it earned 70 cents per share.
    “We reported solid fourth quarter and full-year results as all our businesses achieved strong organic growth, with record client activity and digital engagement,” CEO Brian Moynihan said in a statement. “Our expense discipline allowed us to continue investing in growth initiatives. Strong capital and liquidity levels position us well to continue to deliver responsible growth in 2024.”
    The nation’s second-largest bank posted a $1.1 billion provision for credit losses, up by $12 million from the same quarter last year.
    Bank of America said its net interest income decreased 5% to $13.9 billion due to higher deposit costs and lower deposit balances, which more than offset higher asset yields.

    The bank was supposed to be one of the biggest beneficiaries of higher interest rates last year, but it has underperformed its peers because the lender had piled into low-yielding, long-dated securities during the Covid pandemic. Those securities lost value as interest rates climbed.
    Revenue from consumer banking dipped 4% to $10.3 billion, while sales and trading revenue went up by 3% to $3.6 billion.
    Bank of America stock is down more than 1% this year after a mere 1.7% gain in 2023. The S&P 500 financial sector gained 10% last year. More

  • 125 Shares169 Views

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    BlackRock buys infrastructure investor Global Infrastructure Partners for $12 billion

    BlackRock, the world’s biggest asset manager, announced Friday it is buying Global Infrastructure Partners for about $12 billion in cash and stock.
    The acquisition is part of the firm’s increased focus on infrastructure, which CEO Larry Fink said is “one of the most exciting long-term investment opportunities.” As part of the deal, GIP’s management team will lead a combined infrastructure private markets investment platform at BlackRock.

    The deal is expected to close in the third quarter of this year.
    BlackRock also announcing it will embed its ETF and Index businesses across the entire firm with the creation of a new strategic Global Product Solutions business.
    “This platform is set to be the preeminent, one-stop infrastructure solutions provider for global corporates and the public sector, mobilizing long-term private capital through long-standing firm relationships,” said Bayo Ogunlesi, GIP CEO.
    The firm also creating a new International Business structure that will unify its leadership across Europe, Middle East, India and Asia Pacific. More

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    Chinese rival to Apple’s Vision Pro raises $70 million, doubles down on new strategy to win consumers

    Augmented reality (AR) technology allows digital images to be imposed over the real world.
    Chinese augmented reality glasses and software company Rokid this week announced it raised 500 million yuan ($70 million) in a funding round led by the government of Hefei city.
    Rokid sells AR glasses for consumers. But its deal with Hefei will focus on using AR for factories, Rokid founder and CEO Misa Zhu told CNBC in a phone interview Wednesday.

    Chinese AR glasses and software company Rokid announced it raised $70 million in a funding round led by the government of Hefei city. Seen here, a demonstration for the company’s augmented reality helmet.
    Philip Fong | Afp | Getty Images

    BEIJING — Chinese augmented reality glasses and software company Rokid this week announced it raised 500 million yuan ($70 million) in a funding round led by the government of Hefei city.
    Hefei, which has also backed electric car startup Nio, is a hub for autos and semiconductor manufacturing near Shanghai.

    Augmented reality (AR) technology allows digital images to be imposed over the real world. Apple’s Vision Pro virtual reality headset, set for release on Feb. 2, also allows users to see the real world using what the company calls “spatial computing” technology.
    Rokid sells AR glasses for consumers. But its deal with Hefei will focus on using AR for factories, Rokid founder and CEO Misa Zhu told CNBC in a phone interview Wednesday.
    AR glasses can help with equipment safety checks, while reducing the time workers need to spend on training, he said, claiming Rokid already has more than 60% market share in industries such as energy in China.

    Zhu said that since businesses care more about the product’s capabilities than the price, it allows Rokid to test new AR technology with industrial customers before finding ways to lower its cost and roll it out to consumers.
    Rokid’s cooperation agreement with Hefei city will establish an “industrial metaverse headquarters, an ecosystem center and a research and development center,” local state media said in Chinese, translated by CNBC.

    While companies have diversified their supply chains away from China due to geopolitics and labor costs, Beijing has said it wants to build up domestic capabilities in advanced manufacturing.

    Read more about China from CNBC Pro

    Rokid said it plans to make more tech announcements in the coming weeks. The company also expects significant potential from the incorporation of artificial intelligence.
    “AI plus AR is going to changes people’s lives in the next five to 10 years,” Zhu told CNBC in Mandarin. “AI will help you to better gather and organize data, and [AR] can be used to display it more naturally.” More