Raphael Stevens

United Airlines and other airlines with big international networks benefited from a surge in trips abroad this summer.
Carriers make the bulk of their revenue in the second and third quarters.

A Boeing 787-10 Dreamliner, from United Airlines, taking off from Barcelona airport in Barcelona on March 28, 2023.
JanValls | Nurphoto | Getty Images

United Airlines said more expensive jet fuel and a halt to the carrier’s Tel Aviv flights during the Israel-Hamas war will eat into its profits in the last three months of the year.
For the current quarter, the Chicago-based carrier estimated adjusted earnings of between $1.50 and $1.80 a share, below analysts’ forecasts of $2.06.

United would then earn between $9.55 and $9.85 a share, on an adjusted basis, down from its forecast in July of between $11 and $12 a share, based on its projection for the fourth quarter. Jet fuel prices in major U.S. airports are up nearly 25% since the start of summer.
Its shares dropped around 4% in after-hours trading.
United and other U.S. and international carriers halted their flights to Israel earlier this month. United had more service to Israel than any of the U.S.-based airlines with service from Washington, D.C.; Newark, New Jersey; and San Francisco.
United said its fourth-quarter revenue will rise year over year between 9%, if Israel flights remain suspended through the end of the year, and 10.5% if the suspension lasts only through October. Its costs, excluding fuel, will likely rise between 3.5% and 5% in the fourth quarter from 2022, United said.
The service suspension comes after a robust summer for air travel with revenue growth for international destinations outpacing sales of domestic tickets. That has put big, global carriers such as United and Delta on better footing than some discount airlines such as Spirit, which focus more on U.S. cities and expect losses.

Here’s what United reported for the third quarter compared with what Wall Street expected, based on average estimates compiled by LSEG, formerly known as Refinitiv:

Adjusted earnings per share: $3.65 vs. an expected $3.35
Total revenue: $14.48 billion vs. an expected $14.44 billion

United posted third-quarter net income of $1.14 billion, or $3.42 a share, versus $942 million, or $2.86 a share, a year earlier. Adjusting for one-time items, United posted earnings per share of $3.65.
Revenue rose to $14.48 billion from $12.88 billion.
The carrier will hold a call with analysts and media on Wednesday at 10:30 a.m. ET, when it will face questions on fourth-quarter demand and how the carrier plans to tamp down rising costs. More

Activist investor Engaged Capital said it took a stake in VF Corporation.
Engaged is pushing for several aggressive changes, including $300 million in cost cuts.
VF Corporation owns the Vans and North Face brands.

A shopper passes in front of a North Face store at the Easton Town Center mall in Columbus, Ohio, on Jan. 7, 2021.
Luke Sharrett | Bloomberg | Getty Images

Activist investment firm Engaged Capital has taken a stake in VF Corporation, owner of Vans and The North Face brands, and is pushing for cost cuts and changes to the board.
Shares of VF Corp. closed 14% higher Tuesday, settling at $18.45. The stock is down more than 33% so far this year. Engaged said shares of VF Corp. could jump to a share price of $46 within three years if proposed changes are implemented.

It is unclear exactly how much of a stake Engaged has taken in VF Corp.
Engaged said former VF Corp. CEO Steve Rendle, who abruptly left the company late last year, made a series of strategic errors during his tenure. Those, according to Engaged, include reduced autonomy among individual brands, underinvestment in Vans and the Supreme brand acquisition, which hurt the balance sheet. Rendle was appointed CEO in early 2017 and became chairman later that year.
“We believe VFC’s value destruction is directly attributable to Mr. Rendle’s failed strategy and the Board’s seeming unwillingness to intervene,” the firm said.
Engaged is pushing for several sweeping changes, namely an upward of $300 million in cost cuts through “elimination of duplicative costs and corporate excess.” It also wants the company to commit to holding off on acquisitions.
The firm is, however, supportive of current CEO Bracken Darrell, who took the position in July. “Mr. Darrell appears to have the transformation experience VFC urgently requires,” Engaged said.

VF Corp. said it is aware of Engaged’s comments and investment.
“VF has globally recognized and iconic brands and best-in-class talent. VF’s Board and leadership team, including our recently appointed CEO Bracken Darrell, are taking immediate and decisive actions to strengthen the company’s position and return VF to strong, sustainable, and profitable growth in the interests of all our shareholders,” the company said.Don’t miss these CNBC PRO stories: More

Tupperware appointed Laurie Ann Goldman as its new CEO.
Shares of Tupperware surged following the announcement.
The iconic container maker is attempting to turn around its struggling business.

Tupperware products are offered for sale at a retail store in Chicago on April 10, 2023.
Scott Olson | Getty Images

Tupperware on Tuesday appointed Laurie Ann Goldman as its new CEO and shook up its board as the iconic brand tries to overcome its recent struggles.
Shares of Tupperware closed 8% higher at $2.18 Tuesday. However, the stock is down 47% so far this year, and its market cap is just over $100 million.

The company warned investors earlier this year about its ability to survive as a going concern. It has delayed its financial reporting several times this year amid ongoing financial struggles. In an August securities filing, the company said it identified “multiple prior period misstatements and material weaknesses in internal control over financial reporting.”
Goldman’s predecessor, Miguel Fernandez, worked just three years as the company’s CEO. The container maker also appointed three new members to its board, with Fernandez departing the board, the company said in a statement.
Goldman had previously served as CEO of Avon North America and Spanx.
“Now is the right time to bring in new leadership, and Laurie Ann is exceptionally well-suited to advance our long-term strategy and accelerate growth,” said Susan Cameron, Tupperware’s chair.Don’t miss these CNBC PRO stories: More

Lucid’s third-quarter EV deliveries fell short of Wall Street expectations.
The company has begun shipping partially-assembled EVs to Saudi Arabia for final assembly.
Lucid will report earnings after the U.S. markets close on Nov. 7.

A Lucid showroom in New York City on Aug. 19, 2023.
Adam Jeffery | CNBC

Luxury electric vehicle maker Lucid Group said Tuesday that it delivered 1,457 of its Air sedans to customers in the third quarter, a number that is unlikely to reassure investors worried about demand for the posh and pricey electric vehicle.
Shares of the company fell on the news and ended Tuesday’s session down about 5%.

Analysts polled by FactSet had expected Lucid to deliver about 2,000 vehicles in the third quarter.
Lucid’s third-quarter deliveries compare with 1,404 deliveries in the second quarter and 1,398 deliveries in the third quarter of 2022.
The company said it produced 1,550 Airs during the period, with “over 700” additional vehicles in transit to a new facility in Saudi Arabia for final assembly. That compares to 2,173 Airs built in the second quarter and 2,282 Airs a year earlier.  
Saudi Arabia’s government, a major investor in Lucid, agreed last year to buy at least 50,000 Lucid EVs over the following 10 years, with an option to buy up to 50,000 more. Deliveries are expected to begin before the end of 2023.
Lucid’s shares have fallen nearly 23% from the beginning of 2023 through Monday’s close as concerns about ongoing demand for the Air have lingered. While the Air has received strong reviews and can claim the longest range of any EV currently available in the U.S., it’s expensive. The Air starts at $77,400 in its least-expensive Pure trim, a new single-motor version with 410 miles of range. At the high end, the 1,234-horsepower Sapphire version costs $249,000.

Lucid didn’t provide an update to its production guidance for the full year. The company previously told investors that it expects to produce “over 10,000” vehicles in 2023, guidance it first provided in May and reiterated in August. Through the end of September, Lucid produced 6,037 EVs in 2023, not including the units in transit to Saudi Arabia at quarter-end.
Lucid had $6.25 billion in available liquidity as of the end of the second quarter, including $5.5 billion in cash and the remainder in available credit lines, which Chief Financial Officer Sherry House said at the time was sufficient to fund the company into 2025.
Lucid will report its third-quarter results after the U.S. markets close Nov. 7.Don’t miss these CNBC PRO stories: More

Activist investment firm Starboard Value has built a stake in News Corp.
The firm’s CEO Jeffrey Smith told CNBC’s David Faber on Tuesday that Starboard has been in discussion with News Corp.
Starboard is making the case that News Corp. should separate its real estate assets from its news business.

Activist investment firm Starboard Value is pushing for change at News Corporation, in particular to see its real estate business separated from the rest of the company.
Starboard CEO Jeffrey Smith told CNBC’s David Faber on Tuesday that the firm is building a position in News Corp. and has been in discussions with the company.

Smith said News Corp. should split out its real estate assets, including an interest in REA Group of Australia. News Corp. also owns the Dow Jones news business, which includes publications such as The Wall Street Journal and New York Post.
“Our belief is they’re going to want to … separate the digital real estate assets to be able to highlight this beautiful business for what it’s worth,” Smith said on CNBC on Tuesday.
A News Corp. spokesperson said Tuesday that the company has “always maintained an active and engaged dialogue with our investors and are committed to driving shareholder value.”
“We remain focused on executing our strategic plan, which has helped us set records in profitability over the past three years,” the spokesperson said. “We are proud of our rapid digital transformation and bright prospects for long-term growth and value creation.”
Reuters and The Wall Street Journal earlier reported on Starboard’s stake in News Corp. The size of the stake has yet to be learned. The Murdoch family trust controls about 40% of the voting rights of both News Corp. and Fox Corp., making change difficult at either company.

“It’s not great governance to have dual class,” Smith said Tuesday. “There have been votes to declassify, it’s something to consider as well. But there are easier paths to create a lot of value.”
On Tuesday, Smith called out the valuation discrepancies between the news and real estate businesses. He noted that News Corp.’s “crown jewel” news division trades at four-times earnings before interest, taxes, depreciation and amortization, compared with competitor The New York Times, which trades at 15 times.
Meanwhile, News Corp.’s real estate assets trade at eight times, he said.
“It’s a great business, a great asset, it’s just too cheap,” Smith said of News Corp.’s stock price. News Corp. shares were slightly down Tuesday at $21.85.
He added Tuesday that he believes the split of the businesses hasn’t occurred already because the company was “a little insecure” about leaving the news division alone for a period of time.

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Activist firm Starboard Value is building a stake in News Corp.

Starboard’s push for change at the company comes shortly after Rupert Murdoch said he would step down as chair of the board at both News Corp. and Fox News owner Fox Corp. Effective in November, Murdoch, 92, will become chair emeritus of each company while his son, Lachlan Murdoch, will become sole chair of News Corp. and continue as Fox Corp.’s executive chair and CEO.
Lachlan Murdoch made the initial investment in REA Group two decades ago, which Smith called an “amazing investment” on Tuesday.
More than a year ago, Rupert Murdoch had explored reuniting News Corp. and Fox Corp., a move that would have allowed leadership to be consolidated in the Murdoch media empire while also cutting costs. The businesses were split up in 2013.
The push to rejoin the businesses had come as the audience shrinks for both print media and cable TV — Fox Corp. owns cable TV networks including Fox News — as readers and viewers increasingly get their news and entertainment from online sources.
However, the proposed merger was called off in January. In a letter to the board, Murdoch said he was withdrawing the merger as he and his son “determined that a combination is not optimal for the shareholders” of either of the companies at the time.
Smith said Tuesday that there had not been discussions regarding another push for a proposed merger.Don’t miss these CNBC PRO stories: More

Builder sentiment dropped 4 points to 40 in October, and September’s read was revised down 1 point.
This marks the third straight monthly decline in builder confidence.
Sixty-two percent of builders reported offering sales incentives of all forms in October, up from 59% in September and tied with the previous high for this cycle set in December 2022

A contractor works on a new home under construction in Tucson, Arizona, on Tuesday, Feb. 22, 2022.
Rebecca Noble | Bloomberg | Getty Images

Builder confidence in the market for single-family homes dropped to the lowest level since January, as builders contend with a market dominated by high mortgage rates and costs for financing.
The monthly National Association of Home Builders/Wells Fargo Housing Market Index dropped 4 points to 40 in October, and September’s read was revised down 1 point. Anything below 50 is considered negative. This marks the third straight monthly decline in builder confidence.

Builders point squarely to mortgage rates, which are now at a 23-year high. The average rate on the popular 30-year fixed mortgage has remained over 7% for two months. Affordability has fallen to near record lows.
“Builders have reported lower levels of buyer traffic, as some buyers, particularly younger ones, are priced out of the market because of higher interest rates,” said Alicia Huey, NAHB’s chairman and a homebuilder and developer from Birmingham, Alabama. “Higher rates are also increasing the cost and availability of builder development and construction loans, which harms supply and contributes to lower housing affordability.”
Of the index’s three components, current sales conditions fell 4 points to 46, sales expectations in the next six months dropped 5 points to 44, and buyer traffic dropped 4 points to 26.
In order to get buyers in the door, builders are using more incentives again. This includes buying down mortgage interest rates. About 62% of builders reported offering sales incentives of all forms in October, up from 59% in September and tied with the previous high for this cycle set in December 2022.
In addition, 32% of builders said they cut home prices. That is unchanged from the previous month but still the highest rate since December (35%). The average price discount is steady at 6%.

“The housing affordability crisis can only be solved by adding additional attainable, affordable supply,” said Robert Dietz, NAHB’s chief economist. “Boosting housing production would help reduce the shelter inflation component that was responsible for more than half of the overall Consumer Price Index increase in September and aid the Fed’s mission to bring inflation back down to 2%.  However, uncertainty regarding monetary policy is contributing to affordability challenges in the market.”
Regionally, on a three-month moving average, builder sentiment in the Northeast fell 4 points to 50 and in the Midwest dropped 3 points to 39. In the South it fell 5 points to 49, and in the West it fell 6 points to 41.
Don’t miss these CNBC PRO stories: More

Johnson & Johnson topped quarterly earnings and revenue estimates.
The company also lifted its full-year guidance as sales in the company’s pharmaceutical and medical devices businesses surged.
It marks J&J’s first quarterly results since the company completed the separation from its consumer health spinoff Kenvue in August.  

Johnson & Johnson on Tuesday reported adjusted earnings and revenue that topped Wall Street’s expectations, and lifted its full-year guidance as sales in the company’s pharmaceutical and medical devices businesses surged.
It marks J&J’s first quarterly results since it completed the separation from its consumer health spinoff Kenvue in August, the company’s biggest shake-up in its 137-year history.

Upon that separation in August, J&J also lowered its full-year sales and profit guidance. 
The drugmaker raised that revised outlook on Tuesday: J&J expects 2023 sales of $83.6 billion to $84 billion, compared to a previous guidance of $83.2 billion to $84 billion in August. J&J also expects adjusted earnings per share of $10.07 to $10.13, up from a previous forecast of $10.00 to $10.10.
J&J also said it recorded a one-time, non-cash gain of $21 billion as part of the split of Kenvue.
Here’s what J&J reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

Earnings per share: $2.66 adjusted vs. $2.52 expected
Revenue: $21.35 billion vs. $21.04 billion expected

J&J’s stock rose more than 1% in premarket trading Tuesday. Shares of J&J have dropped nearly 11% for the year, putting the company’s market value at roughly $379 billion.

The company, whose financial results are considered a bellwether for the broader health sector, said its sales during the quarter grew 6.8% over the same period last year. 
The pharmaceutical giant reported net income of $4.31 billion, or $1.69 per share. That was flat compared with net income of $4.31 billion, or $1.62 per share, for the same period a year ago.
Excluding certain items, adjusted earnings per share were $2.66 for the period.

An entry sign to the Johnson & Johnson campus shows their logo in Irvine, California on August 28, 2019.
Mark Ralston | AFP | Getty Images

J&J reported $13.89 billion in pharmaceutical sales, which grew more than 5% year over year. Excluding sales of its unpopular Covid vaccine, the pharmaceutical division raked in $13.85 billion. 
Wall Street was expecting sales of $13.34 billion for the entire business segment, according to StreetAccount. The business, also known as “Innovative Medicine,” is focused on developing drugs across different disease areas.
The company said the growth was driven by sales of Darzalex, a biologic for the treatment of multiple myeloma, along with Erleada, a prostate cancer treatment, and other oncology treatments. 
J&J’s blockbuster drug Stelara, which is used to treat a number of immune-mediated inflammatory diseases, also contributed to that growth. J&J will lose patent protection on Stelara later this year. 
The company said growth was partially offset by a decline in sales of its prostate cancer drug Zytiga and blood cancer drug Imbruvica, which is co-marketed by AbbVie and will be subject to the first round of Medicare drug price negotiations. 
J&J’s Covid vaccine also weighed on pharmaceutical sales growth. This quarter was the second without any U.S. sales from J&J’s Covid vaccine, which brought in $41 million in international revenue.
“Our success was never dependent on the Covid vaccine,” J&J CFO Joseph Wolk said Tuesday on CNBC’s “Squawk Box.”
Meanwhile, sales for the company’s medical devices business rose to nearly $7.46 billion, up 10% from the third quarter of 2022. That came in under Wall Street’s expectations of $7.58 billion, according to Street Account.
J&J said its acquisition of Abiomed, a cardiovascular medical technology company, in December fueled the year over year rise.
J&J said growth came from electrophysiological products, which evaluate the heart’s electrical system and help doctors understand the cause of abnormal heart rhythms.
Wound closure products and devices for orthopedic trauma, or serious injuries of the skeletal or muscular system, contributed, along with contact lenses.
The third-quarter results come amid investor anxiety over the thousands of lawsuits claiming that J&J’s talc-based products were contaminated with the carcinogen asbestos, which caused ovarian cancer and several deaths.
Those products, including J&J’s namesake baby powder, now fall under Kenvue. But J&J will assume all talc-related liabilities that arise in the U.S. and Canada.
In 2021, J&J offloaded its talc liabilities into a new subsidiary, LTL Management, and immediately filed for Chapter 11 bankruptcy protections. But a federal bankruptcy judge in July rejected J&J’s second attempt to resolve those lawsuits in bankruptcy.
J&J previously said LTL Management intends to appeal the decision.
The quarterly results also come as J&J begins price talks with the federal Medicare program over its drug Xarelto, which is used to prevent blood clotting to reduce the risk of stroke.
President Joe Biden’s Inflation Reduction Act, which passed in 2022, empowered Medicare to negotiate drug prices for the first time in the program’s six-decade history. J&J signed an agreement to participate in the price talks last month, even after it sued the Biden administration to halt the process in July.
Wolk said during an earnings call on Tuesday that J&J submitted all requested information in compliance with the federal government’s negotiation process.
But Wolk also reiterated the company’s opposition to the negotiations: “We continue to believe the IRA’s price-setting provisions are damaging to innovation and will prevent the delivery of transformative therapies and cures to patients as we await adjudication of legal proceedings initiated by us and others.” More