Raphael Stevens

Boeing’s new CEO Kelly Ortberg said the company must focus on its core business ahead of his first earnings call since taking the top job in August.
Boeing’s more than 32,000 striking machinists will also vote on a new contract proposal on Wednesday that could end a more than five-week work stoppage.
The manufacturer is bleeding cash and is preparing to raise billions in equity or debt after lost more than $6 billion in the last quarter.

Workers picket outside the Boeing Co. manufacturing facility during a strike in Renton, Washington, US, on Thursday, Oct. 3, 2024. 
David Ryder | Bloomberg | Getty Images

Boeing’s new CEO Kelly Ortberg said the company needs to become leaner and improve quality, a vision he laid out for the troubled plane manufacturer ahead of his first quarterly call with analysts on Wednesday. At the same time, thousands of striking Boeing machinists will vote on a new labor contract, and Ortberg said he was hopeful for a deal.
Boeing reported a more than $6 billion loss for the third quarter, its largest since 2020 when the pandemic halted most aircraft demand and its best-selling airplane was grounded after two crashes.

Boeing had released preliminary third-quarter results earlier this month, showing revenue of $17.8 billion, down less than 2% from a year earlier, as well as a loss of $9.97 a share and an operating cash outflow of $1.3 billion. It disclosed charges of more than $5 billion across its commercial and defense units and said it ended the third quarter with $10.5 billion in cash and marketable securities.
Its commercial airplane unit’s losses swelled to more than $4 billion from a $678 million loss a year before. The charges were related to the additional delay of the debut of its 777X wide-body aircraft to 2026 and another delay tied to the 767. Boeing plans to end production of the 767 when orders are fulfilled in 2027.
Its defense unit lost $2.4 billion in the third quarter from $924 million in the same period of 2023, with charges tied to several programs, including the KC-46 tanker and the troubled Starliner. The Starliner capsule returned empty from the International Space Station this summer, without the two NASA astronauts it originally carried to space.
Here’s what the company reported versus what Wall Street analysts surveyed by LSEG, formerly known as Refinitiv, expected:

Loss per share: $10.44 adjusted. That may not compare with an adjusted loss of $10.52 expected by LSEG.
Revenue: $17.84 billion vs $17.82 billion expected

Ortberg, a former CEO of Rockwell Collins, took the helm of Boeing in August, tasked with restoring the company’s reputation and stamping out quality problems on aircraft and in other programs. In January, a door plug blew out minutes into an Alaska Airlines flight on a 737 Max 9 after key bolts weren’t reinstalled before the plane left Boeing’s factory. The near-catastrophe reignited safety concerns from regulators and customers.

“We need to know what’s going on, not only with our products, but with our people,” Ortberg said Wednesday. “And most importantly, we need to prevent the festering of issues and work better together to identify, fix, and understand root cause.”
Ortberg acknowledged that it will take some time to turn the ship.
“We have employees who are thirsty to get back to the iconic company they know, setting the standards for the products that we deliver,” he said.
Ortberg earlier this month said Boeing will slash 10% of its global workforce of about 170,000 people, hinting at a slimmer manufacturer. He is expected to face questions on the call about which units or projects the company will consider shedding.
“We need to reset priorities and create a leaner, more focused organization,” he said in his prepared remarks.

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The most pressing issue for Boeing this week is ending a costly labor strike that has hobbled its factories in the Seattle area, where most of its aircraft are produced. More than 32,000 machinists walked off the job early Sept. 13, about two weeks before the quarter ended, after overwhelmingly voting down a contract that included 25% raises, among other changes. A new proposal, unveiled Saturday, included 35% raises over four years, a higher signing bonus and 401(k) contributions, and other improvements.
The strike costs Boeing $1 billion a month, according to S&P Global Ratings, and getting to a speedy conclusion is crucial for the fragile aerospace supply chain, where furloughs are already beginning.
“We have been feverishly working to find a solution that works for the company and meets our employees’ needs,” Ortberg said.
The deal includes a commitment from Boeing to build its next aircraft in the Pacific Northwest. That has been a sore spot for unionized machinists after Boeing moved its 787 Dreamliner production to a non-union facility in South Carolina.
“Boeing is an airplane company and at the right time in the future we need to develop a new airplane. But we have a lot of work to do before then,” Ortberg said Wednesday.
Analysts are optimistic that the deal will pass. Results of the labor vote are expected late Wednesday night. More

The fifth game of this year’s WNBA Finals was the most viewed WNBA Finals game in 25 years.
Viewership peaked at 3.3 million during Game 5.
The impressive viewership caps off a WNBA season that saw ratings, engagement and attendance up across the board.

The New York Liberty celebrate after wining the 2024 WNBA Championship against the Minnesota Lynx during Game 5 of the 2024 WNBA Finals on October 20, 2024 at Barclays Center in Brooklyn, New York. 
David Sherman | National Basketball Association | Getty Images

It was a big finish for the 2024 WNBA season.
The fifth game of this year’s WNBA Finals between the Minnesota Lynx and the New York Liberty was the most-viewed WNBA finals game in 25 years across all networks, according to ESPN, citing Nielsen data. The game aired on ESPN and topped out at 3.3 million viewers.

The viewership for Game 5 is especially impressive considering the competition for attention Sunday night. Both the National Football League’s “Sunday Night Football” and Major League Baseball’s National League Championship Series aired at the same time.
Viewership across the entire WNBA Finals series more than doubled in comparison to last year, a continuation of the growing popularity for the WNBA and women’s sports more broadly.
This year’s finals were helped even more by a close battle between a perennial WNBA powerhouse in the Lynx and a previously championship-less contender in the Liberty. Four of the five games were decided by 5 or fewer points, and two games, including the final, went into overtime. The Liberty eventually prevailed, winning 67-62 in front of their home crowd.
The impressive viewership caps off a WNBA season that saw viewership, engagement and attendance up across the board.
The league is also fresh off a new media rights deal, which is negotiated as part of the National Basketball Association’s agreement with broadcast partners. The leagues’ new deal is worth $2.2 billion over 11 seasons, with an agreement to reevaluate the terms after the 2028 season, CNBC previously reported.

And there’s room to run for the WNBA: Several new teams will debut over the next couple of seasons, with the Golden State Valkyries beginning play in the 2025 season. Next year will also have 44 regular season games instead of 40, as well as a seven-game finals instead of five.
The Women’s National Basketball Players Association said Monday it would opt out of the collective bargaining agreement it had earlier reached with the league. The current CBA will still be in place for the 2025 season, according to the Associated Press. More

McDonald’s shares fell in extended trading after the CDC said an E. coli outbreak was linked to the chain’s Quarter Pounder burgers.
The outbreak has led to 10 hospitalizations and one death, the CDC said.
The restaurant chain said initial findings from the investigation show some of the illnesses may be linked to onions that are used in the Quarter Pounder.

A McDonald’s located on Route 66 in Azusa, California, on April 1, 2024.
Robert Gauthier | Los Angeles Times | Getty Images

McDonald’s shares dropped in extended trading Tuesday after the Centers for Disease Control and Prevention said an E. coli outbreak linked to McDonald’s Quarter Pounder burgers has led to 10 hospitalizations and one death.
The agency said 49 cases have been reported in 10 states between Sept. 27 and Oct. 11, with most of the illnesses in Colorado and Nebraska. “Most” sick people reported eating a McDonald’s Quarter Pounder, the CDC added.

One of the patients developed hemolytic uremic syndrome, which is a serious condition that can cause kidney failure. An older adult in Colorado died. 
McDonald’s shares dropped about 7% in after-hours trading Tuesday.
In a statement Tuesday, McDonald’s said it is taking “swift and decisive action” following the E. Coli outbreak in certain states.
The company said initial findings from the ongoing investigation show that some of the illnesses may be linked to slivered onions — or fresh onions sliced into thin shapes — that are used in the Quarter Pounder and sourced by a single supplier that serves three distribution centers. McDonald’s has instructed all local restaurants to remove slivered onions from their supply and has paused the distribution of that ingredient in the affected area.

Arrows pointing outwards

This map shows where the 49 people in this E. coli outbreak live.
Source: CDC

Quarter Pounder hamburgers will be temporarily unavailable in several Western states, including Colorado, Kansas, Utah and Wyoming, and portions of other states, McDonald’s said. It added that it was working with suppliers to replenish ingredients.

The majority of states and menu items are not affected by the outbreak, McDonald’s USA President Joe Erlinger said in a video. The company’s other beef products, including the cheeseburger, hamburger, Big Mac, McDouble and the double cheeseburger, are not affected, he added. Those sandwiches use a different type of onion product.
“We are working quickly to return our full menu in these states as soon as possible,” Erlinger said. “I hope these steps demonstrate McDonald’s commitment to food safety.”
Quarter Pounder hamburgers are a core menu item for McDonald’s, raking in billions of dollars each year. In 2018, McDonald’s launched fresh beef for its Quarter Pounders across most of its U.S. stores.
The CDC said the number of people affected by the outbreak is “likely much higher” than what has been reported so far. The agency said that is because many people recover from an E. coli infection without testing for it or receiving medical care. It also typically takes three to four weeks to determine if a sick patient is part of an outbreak, the CDC added. 
E. coli refers to a group of bacteria found in the gut of nearly all people and animals. But some strains of the bacteria can cause mild to severe illness if a person eats contaminated food or drinks polluted water.
Symptoms, including stomach cramps, diarrhea and vomiting, usually start three to four days after swallowing the bacteria, according to the CDC. Most people recover without treatment after five to seven days.
There have been several past reported cases of E. coli at McDonald’s restaurants.
In 2022, at least six children developed symptoms consistent with E. coli poisoning after eating McDonald’s’ Chicken McNuggets Happy Meals in Ashland, Alabama. Four of the six children were admitted to a hospital after experiencing severe adverse effects.

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Starbucks released preliminary results for its fiscal fourth quarter and suspended its outlook for fiscal 2025.
The company’s same-store sales slid for the third consecutive quarter, fueled by a 10% tumble in traffic to its North American stores.
Starbucks also raised its quarterly dividend to “provide some certainty” to investors as it tries to turn around the business.

Starbucks cups are pictured on a counter in Manhattan, New York, on Feb. 16, 2022.
Carlo Allegri | Reuters

Starbucks on Tuesday posted preliminary quarterly results that showed its sales fell again as the coffee chain tries to execute a turnaround.
“Our fourth quarter performance makes it clear that we need to fundamentally change our strategy so we can get back to growth and that’s exactly what we are doing with our ‘Back to Starbucks’ plan,” CEO Brian Niccol said in a statement.

Niccol said he plans to share more details on the steps Starbucks is taking to turn around the business on the company’s earnings call, scheduled for Oct. 30. The coffee chain’s new CEO aims to reverse slowing demand for Starbucks’ drinks, starting with its largest market: the U.S.
Already, the CEO said the company is “fundamentally changing” its marketing by refocusing on all of its customers, not just members of its loyalty program. He added that Starbucks plans to simplify its “overly complex menu,” fix its pricing and make sure all of its drinks are handed directly to customers. All three of those goals have been top complaints from customers and baristas in recent years.
“We believe that our problems are very fixable and that we have significant strengths to build on,” Niccol said in prepared remarks released on the company’s website on Tuesday.
The company’s preliminary net sales fell 3% to $9.1 billion. It reported preliminary adjusted earnings per share of 80 cents.
Analysts surveyed by LSEG were expecting the company to report fiscal fourth-quarter earnings per share of $1.03 and revenue of $9.38 billion.

Shares of the company fell more than 3% in extended trading on the announcement.

Slumping sales

For the third consecutive quarter, Starbucks’ same-store sales fell. This quarter’s 7% decline in same-store sales was the company’s steepest drop since the Covid-19 pandemic.
The company blamed its soft sales on weaker demand in North America. In its home market, its same-store sales decreased 6%. Traffic tumbled 10%, despite increased investments in the business, such as more frequent promotions in its mobile app and an expanded range of product offerings.
In China, its second-largest market, same-store sales plummeted 14%. The company attributed the decline to competition in the country, which it said is altering consumer behavior and changing the company’s strategy for the market.
The company also suspended its fiscal 2025 outlook, citing the recent CEO transition and the “current state of the business.”
Despite the dismal quarter, the company increased its dividend from 57 cents to 61 cents per share.
“We want to amplify our confidence in the business, and provide some certainty as we drive our turnaround,” Chief Financial Officer Rachel Ruggeri said in a statement.
Ruggeri added that the company is developing a plan to turn around the business, but creating a strategy will take time.

A challenge for Niccol

The surprise announcement of the company’s preliminary results comes nearly two months ago after Niccol took the helm of the coffee giant. The CEO transition followed two quarters of falling sales for Starbucks and several activist investors building stakes in the company.
In the U.S., the chain has been losing its occasional customers, who have opted to save money instead of spending on its macchiatos and Refreshers. Starbucks’ business in China has also been struggling to recover since the pandemic, and the rise of cheaper local rivals such as Luckin Coffee and a more cautious consumer have dented sales in recent months.
Niccol joined Starbucks after six years as CEO of Chipotle. During his tenure at the fast-casual chain, he led the company through a turnaround after its foodborne illness crises, invested in its digital business and turned it into a top industry performer, even during the pandemic.
To curb Starbucks’ sales slump, Niccol plans to turn first to the company’s struggling U.S. business. In an open letter released during his first week on the job, he said he plans to focus on four areas of improvement: the barista experience, morning service, its cafes and the company’s branding.
Niccol has also been reshuffling the company’s executive ranks. On Friday, the company announced a former Chipotle executive, Tressie Lieberman, will be joining Starbucks as its global chief brand officer, a newly created position. Last month, Starbucks said its North American CEO Michael Conway would retire after just five months in the role. Niccol’s predecessor Laxman Narasimhan had appointed Conway before his ouster in August.
Shares of Starbucks are up 1% this year, as of Tuesday’s close. The company has a market cap of more than $109 billion.

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Peloton is partnering with Costco to sell its Bike+ in stores and online between Nov. 1 and Feb. 15.
Costco will offer Peloton’s Bike+ in 300 of its U.S. stores for $1,999, and on Costco.com for $2,199, compared to the typical price of $2,495.
The partnership comes as Peloton looks for fresh and profitable ways to reach new customers.

Peloton and Costco.
Shannon Stapleton | Reuters Justin Sullivan | Getty Images

Peloton’s stationary bikes will soon sell at Costco’s stores and on its website as the beleaguered fitness company looks for new ways to reach younger and affluent customers, Peloton is set to announce Tuesday.
Under the terms of the deal, Costco will offer Peloton’s Bike+ in 300 of its U.S. stores for $1,999, and on Costco.com for $2,199 between Nov. 1 and Feb. 15. It is a steep discount from the typical price of the Bike+, which is selling on Peloton’s website for $2,495. It is unclear how the price will compare to any holiday promotions Peloton plans to offer. 

The new partnership comes during a state of transition for Peloton, which is being led by two board members after its former CEO Barry McCarthy stepped down earlier this year.
Long focused on growth at all costs, Peloton has turned its sights to profitability and has had to become more creative as it tries to reach new users.
As sales fall and losses mount, Peloton is looking for cheaper ways to attract new customers. Costco is one way to get there, Dion Camp Sanders, Peloton’s chief emerging business officer, told CNBC in an interview. 
“We’ve been able to architect a deal with Costco that meets our needs with regard to profitable, sustainable unit economics, while at the same time delivering robust and clear value to Costco members,” said Camp Sanders. “We’ve structured this deal with Costco to both meet our needs for profitable, sustainable growth and getting us access to Costco’s very large net incremental audience.” 
Camp Sanders said Peloton’s partnership with Costco is only for a limited time because fitness is a seasonal category for the company, but Peloton hopes to keep building on the relationship and perhaps expand it to future locations both in the U.S. and abroad.

The deal with Costco gets Peloton onto the shelves of a retailer with a strong fan following and wealthier customers. The membership-based club has gained popularity as shoppers across all incomes prioritize value and try to get more for their money with bulk packs and private-label items.
As of Sept. 1, store traffic at Costco had increased 31% compared with the same period in pre-pandemic 2019, according to Placer.ai, an analytics company that estimates visits to locations based on smartphone data. 
Costco’s members are also getting younger. Those consumers prioritize health and wellness — and are willing to invest in it — in ways that older generations do not. 
About half of Costco’s new membership sign-ups last fiscal year came from people who were under 40 years old, and the average age of its 76 million members has fallen since the Covid-19 pandemic, Chief Financial Officer Gary Millerchip said on an earnings call in late September. 
According to Numerator, 36% of Costco’s customers have a household income of more than $125,000. Numerator has a panel of 150,000 U.S. consumers that is balanced to be representative of the country’s population.
Camp Sanders said Costco’s members “have the disposable income to be able to afford our premium products,” and their lifestyles align with what Peloton offers. 
“Many of Peloton’s members are affluent, they often have larger homes in the suburbs and they also have life situations where Peloton fits a clear need,” said Camp Sanders. “Many Costco members are juggling families, they maybe have a busy career … and they’ve got the space in their home” to build their own gyms, he continued. 
Costco’s Executive Vice President of Merchandising Claudine Adamo declined to comment to CNBC.
Peloton already sells its workout equipment through Amazon and Dick’s Sporting Goods, but has also been working to develop relationships with other companies that cater to similar customer bases. 
For example, hundreds of Hyatt Hotel properties have Peloton equipment on site. As of this month, hotel members can earn points for completing workouts on the Peloton Bike and Row during their stay. 
It also announced a deal with Truemed — the PayPal of the health savings account and flexible spending account world — that allows Peloton members to use pretax earnings to buy certain hardware products, including the Bike, Bike+ and Tread.

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GM easily outperformed Wall Street’s third-quarter earnings expectations, leading the Detroit automaker in raising key guidance targets for 2024.
GM now expects full-year adjusted EBIT of between $14 billion and $15 billion, or $10 and $10.50 a share, up from between $13 billion and $15 billion, or $9.50 and $10.50.
GM executives will host an earnings conference call at 8:30 a.m. ET.

DETROIT — General Motors easily outperformed Wall Street’s third-quarter earnings expectations, leading the Detroit automaker in raising key guidance targets for 2024.
Here’s how the company performed in the third quarter, compared with average estimates compiled by LSEG:

Earnings per share: $2.96 adjusted vs. $2.43 expected
Revenue: $48.76 billion vs. $44.59 billion expected

This marks the third time this year that GM has updated its guidance after beating Wall Street’s top- and bottom-line expectations, led by the automaker’s North American operations.
GM is now forecasting full-year adjusted earnings before interest and taxes of between $14 billion and $15 billion, or $10 and $10.50 a share, up from between $13 billion and $15 billion, or $9.50 and $10.50. It also raised its adjusted automotive free cash flow forecast to between $12.5 billion and $13.5 billion, up from $9.5 billion and $11.5 billion.
The automaker tightened its net income attributable to common stockholders, which excludes some dividend payouts, to between $10.4 billion and $11.1 billion, or $9.14 and $9.63 per share. That compared to its previous guidance of $10 billion to $11.4 billion, or $8.93 and $9.93.
GM CFO Paul Jacobson warned earnings will be lower during the fourth quarter, citing timing of truck production, seasonality, lower wholesale volumes and vehicle mix, including selling more electric vehicles.
Shares of GM were up roughly 2% during premarket trading Tuesday.

The automaker has topped Wall Street’s EPS estimates for nine consecutive quarters and revenue for eight straight quarters.
GM’s third-quarter results were assisted by continued strong pricing, offsetting losses in China and year-over-year cost increases of $200 million in labor and $700 million in warranty costs.
Jacobson said the company’s average transaction price per vehicle, which Wall Street has been monitoring for signs of weakening,  remained over $49,000 from July through September.
“The consumer has held up remarkably well for us,” he said during a media briefing. “Nothing we see has changed from where we’ve been for the last several quarters.”

Stock chart icon

GM, Ford and Stellantis stocks in 2024.

GM said revenue during the third quarter was up 10.5% from roughly $44 billion a year earlier. Its net income during the quarter rose slightly to $3 billion.
Jacobson noted some of the company’s third-quarter outperformance was assisted by the automaker pulling ahead some truck production from the fourth quarter, which represented a $400 million boost in adjusted earnings.
The company’s North American operations represented a disproportional amount of its earnings. They included adjusted earnings before interest and taxes of nearly $4 billion, up 12.9% from a year earlier. The results represented a 9.7% adjusted profit margin.
The North American results compared to a $137 million loss in China, where GM is attempting to restructure operations, and an 88.2% drop in adjusted earnings in its other international markets compared to a year earlier to $42 million.
GM’s financing arm reported a 7.3% decline in adjusted earnings to $687 million during the third quarter. The automaker’s embattled Cruise autonomous vehicle unit has lost roughly $1.3 billion through September, including a loss of $383 million during the third quarter.
The quarterly report comes just two weeks after a GM investor day in which the company indicated its earnings strength is expected to continue into next year. GM expects to share its full 2025 guidance in January.
Topics of interest for investors that were not addressed earlier this month include GM’s funding plans for its embattled Cruise autonomous vehicle unit, details on its China restructuring and any updates regarding its near-term electric vehicle sales and plans.
“We think we can turn it around,” Jacobson told CNBC’s Phil LeBeau on Tuesday regarding China. He said the automaker has several meetings scheduled with its Chinese partners regarding the restructuring, including cost cuts.
Shares of GM are up about 36% this year as of Monday’s close of $48.93. The stock has been boosted by billions of dollars in buybacks by GM, which have led to a 19% year-over-year reduction in outstanding shares.
This is developing news. Please check back for additional updates.

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