Raphael Stevens

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    in Business

    Chewy shares surge after earnings beat on top and bottom lines

    Chewy posted earnings of 5 cents a share, a strong beat compared with analyst estimates of a loss of 4 cents per share.
    The pet retailer, known for its convenient autoship policies, saw $2.78 billion in sales, up 14.7% year over year.
    Net sales per active customer and sales from autoship customers reached record highs in the quarter, Chewy said in a press release.

    A dog sits in front of the New York Stock Exchange during Chewy Inc.’s initial public offering, June 14, 2019.
    Michael Nagle | Bloomberg | Getty Images

    Shares of Chewy surged more than 13% in extended trading Wednesday after the pet retailer posted earnings that beat Wall Street’s estimates.
    Here’s how the digital retailer did in its fiscal first quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

    Earnings per share: 5 cents, versus a loss of 4 cents a share expected
    Revenue: $2.78 billion, versus $2.73 billion expected

    The company’s reported net income for the three-month period that ended April 30 was $22.18 million, or 5 cents a share, compared with $18.47 million, or 4 cents a share, a year earlier.
    Sales rose to $2.78 billion, up 14.7% from $2.43 billion a year earlier.
    Net sales per active customer and sales from autoship customers reached record highs in the quarter, Chewy said in a press release.
    Gross margins were up about 1 percentage point.
    The earnings beat comes after the retailer posted its first annual profit at the close of fiscal 2022 earlier this year, but noted the pet industry was seeing softness in discretionary and hard goods categories, which carry higher margins than consumables such as pet food. More

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    Dollar General shareholders pass proposal to improve worker safety

    A proposal asking Dollar General’s board to commission an independent, third-party audit that would examine the company’s policies and practices and how it affects worker safety was passed by shareholders during the company’s annual meeting.
    Dollar General is facing mounting pressure from regulators, activists and employees to improve working conditions.
    The company is currently facing more than $21 million in fines from the federal Occupational Safety and Health Administration for safety hazards.

    The exterior of a Dollar General convenience store is seen in Austin, Texas, March 16, 2023.
    Brandon Bell | Getty Images

    Dollar General shareholders passed a resolution Wednesday to create an independent audit into worker safety, as the retailer faces mounting pressure to improve conditions. 
    The proposal, brought by Domini Impact Investments, asked Dollar General’s board to commission an independent, third-party audit that would examine the company’s policies and practices and how they affect the safety and well-being of workers. 

    It recommended the audit include an evaluation of practices that contribute to an unsafe or violent environment, such as staffing capacity. It also recommends the analysis include discussions with workers and customers to inform solutions, as well as recommendations for actions to take and regular reporting about progress made on those efforts. 
    It is not clear if the proposal is binding.
    Dollar General’s board recommended shareholders vote against the measure. The company didn’t answer when asked if it plans to conduct the audit.
    “We are awaiting the final report and will report the final results in a Form 8-K within the required period,” a company spokesperson said.
    “We strive to create a work environment where employees are able to grow their careers, serve their local communities and feel valued and heard, and we encourage employees to share their feedback through the many company-provided channels so that we can listen and work together to address concerns and challenges, as well as to celebrate successes,” the spokesperson added.

    The company is the fastest-growing retailer in the country by store count. It employs more than 170,000 full- and part-time employees across more than 19,000 stores in 47 states and Mexico as of March, according to a securities filing. It plans to open an additional 1,050 stores in fiscal 2023 and announced more store openings than any other retailer in 2022, according to Coresight Research, a retail-focused advisory firm.
    As Dollar General expanded its footprint across America, it has racked up more than $21 million in fines from the federal Occupational Safety and Health Administration for a slew of safety hazards, including blocked fire exits, blocked electrical outlets and dangerous levels of clutter. 
    During the shareholder meeting at Dollar General’s corporate headquarters in Goodlettsville, Tennessee, company stocker David Williams expressed the dire need for the audit as activists rallied outside the building. 
    “I’m one of the hundreds of thousands of Dollar General employees that come into work every day scared for our safety. We’re scared because we know that the leaders of Dollar General are not looking out for the safety of workers,” Williams said in his address to shareholders. “The company has expanded so fast and so recklessly, that on any given day, I might have to deal with a rat infestation, a door that won’t lock or someone pointing their gun at me with no security to protect me.” 
    Williams pointed to the financial implications of Dollar General’s safety issues. 
    “Violations include aisles, emergency exits, fire extinguishers and electrical panels blocked by boxes of merchandise stacked up to six feet high. This could lead to fires where workers and customers aren’t able to get out of the store or boxes falling on workers or customers when they navigate the aisles trying to squeeze around them,” said Williams, citing findings from OSHA and personal experience.
    “This is all made worse by the serious level of understaffing. It is not uncommon for a worker to be alone in a store at night in areas where robberies commonly occur,” he added.
    The repeated OSHA violations have led the agency to label Dollar General a “severe violator,” a title reserved for companies that continuously fail to rectify safety concerns. 
    ″[It’s] a program for the worst safety violators in the nation. It is totally rare for a large employer with many work sites to be in the severe violator program. Most companies in their program are small construction companies,” Debbie Berkowitz, a former chief of staff and senior policy advisor at OSHA, said previously. 
    Beyond fire hazards and dangerous levels of clutter, Dollar General has become a hot spot for gun violence. Since 2014, 49 people have been killed and 172 people have been injured at Dollar General stores by gun violence, according to data from Gun Violence Archive, a nonprofit. More

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    Stocks making the biggest moves midday: Intel, C3.ai, Advance Auto Parts, HP and more

    Signage outside Intel headquarters in Santa Clara, California, Jan. 30, 2023.
    David Paul Morris | Bloomberg | Getty Images

    Check out the companies making the biggest moves midday.
    Intel — Shares popped 4.83% after the chipmaker’s finance chief said the company could soon see a turnaround. Speaking at a conference, CFO David Zinsner said the company’s data center division is starting to “turn the corner,” while adding that China inventory should start to ease after the third quarter. He also said second-quarter revenue will come in at the high end of its guidance.

    Advance Auto Parts — Shares sank 35.04% after the car parts retailer reported an adjusted earnings per share of 72 cents, widely missing analysts’ estimates of $2.57, per Refinitiv. The company also missed on revenue and cut its quarterly dividend and full-year guidance.
    Avis Budget — The car rental company’s shares gained 2.77% Wednesday after Deutsche Bank upgraded shares to buy. The bank said a likely share-repurchase announcement later in 2023 could be a positive catalyst for shares.
    Nvidia — Shares retreated 5.68%, taking a breather from its recent run. Nvidia rallied Tuesday, which briefly pulled the tech stock’s market cap above $1 trillion. The stock has been a focus of excitement amid booming interest in artificial intelligence.
    C3.ai — Shares slipped 8.96% ahead of the AI software maker’s quarterly results after the bell. C3.ai has soared more than 250% so far this year.
    Ambarella — The chip stock fell 11.76%. On Tuesday, Ambarella said it expected second-quarter revenue to range between $60 million and $64 million, below the $67.2 million guidance expected by analysts, according to Refinitiv. KeyBanc downgraded the stock to sector weight from overweight after the report. The fall came despite Ambarella reporting a smaller-than-expected adjusted loss in the first quarter.

    Hewlett Packard Enterprise — Shares of the tech company slid 7.09% a day after the company posted a mixed quarterly report. Although earnings per share beat analysts’ estimates, revenue for the quarter came in below expectations, according to Refinitiv.
    HP — The stock fell 6.05%. The action came a day after the tech hardware company reported mixed quarterly results. HP’s revenue of $12.91 billion fell short of the $13.07 billion expected from analysts polled by Refinitiv. Its adjusted earnings per share of 80 cents topped the 76 cents per share expected.
    SoFi Technologies — Shares in the student loan refinancing firm gained 15.09%. The House is slated to vote on the debt ceiling bill Wednesday. The package includes a measure that would end the student loan payment pause.
    Micron Technology — The chip stock dropped 4.87% following the company’s presentation at the Goldman Sachs Global Semiconductor Conference. Micron said its third-quarter trends have been consistent with guidance and the company sees no need to raise it. However, Micron noted revenue growth guidance near the high end of its previously stated range.
    Carvana — Shares dropped 5.83%, erasing some of the big gains it has seen so far this year. Earlier this month, the stock surged after Carvana said it will achieve adjusted profit sooner than expected. Carvana is up nearly 160% year to date.
    Twilio — The tech stock rallied 11.09%. On Tuesday, a news report indicated activist investor Legion Partners has met several times with Twilio’s board of directors and management. Legion is looking to make changes to the board, and asking the company to consider divestitures, according to The Information, which cited people familiar with the matter.
    Regional banks — Regional banks fell Wednesday, adding to their steep losses for the month of May. KeyCorp lost 5.94% and Zions Bancorp shed 5.6%, while Citizens Financial Group fell 5.12% and Truist Financial slipped 1.99%.
    — CNBC’s Hakyung Kim, Jesse Pound, Brian Evans, Tanaya Macheel and Fred Imbert contributed reporting.
    Correction: An earlier version of this story incorrectly said C3.ai was behind ChatGPT. More

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    The world’s oil-price benchmark is being radically reformed

    The price of Brent crude has a decent claim to be the world’s most important number. Two-thirds of the 100m barrels a day of oil traded globally derive their price from it. So do millions of futures contracts that buyers and sellers employ to manage risk. Some governments use the oil price to set tax rates; customers, for their part, are exposed through heating-oil and petrol prices. Dated Brent, as the benchmark is formally known, also anchors markets beyond petroleum. It sets the price for liquefied natural gas in energy-guzzling Asia. And as an indicator for global economic health, it shapes the decisions of the world’s powerbrokers, from America’s Federal Reserve to China’s strategic planners. The four-decade-old index is named after a tiny cluster of wells some 190km north-east of the northernmost islands of Scotland. That it still wields such clout is a wonder—and, increasingly, a danger. The crude transactions that Platts, a price-reporting agency, observes to calculate the Brent price have become ever rarer, making it easier for traders to sway prices. So Platts is introducing a fix: for deliveries dated June 2023 onwards, it will add transactions of West Texas Intermediate (wti) Midland, an American crude, similar in quality to Brent, to the pool from which the benchmark is calculated, marking the first time oil from outside the North Sea will be included. How the experiment unfolds will determine whether trust in Brent endures, and whether the world’s biggest commodity market continues to function. Worries that Dated Brent might become insufficiently liquid have a pedigree. Output at the eponymous field peaked in 1984; now just two or three cargoes a month are loaded. Starting in 2002, four blends from other fields (one British, three Norwegian) were added to the pool. This buoyed volumes of Brent-graded cargoes, facilitating price discovery. It also made the price-reporting agencies’ job fiendishly complex. To discourage “squeezing” (attempts to drive up prices by hoarding cargoes) Dated Brent is based on the price of the cheapest blend in the pool as traded in London during a daily window. But each blend differs slightly from the original Brent—in density and sulphur content—requiring adjustments to ensure fair competition. These additions have bought time but failed to solve the fundamental problem: North Sea oil production has been steadily falling. Campaigns to corner the market have multiplied. They are especially likely in the summer, when maintenance at wells means even less oil is produced, says Adi Imsirovic, a former oil-trading chief at Gazprom, an energy giant. It was becoming plausible that doubts about the benchmark could one day cause market participants to declare millions of contracts invalid. Change was needed to avert chaos. Over a barrelIn theory, the market could have crowned an index from much bigger oil-production hubs than Europe, such as the Persian Gulf or Russia, to replace Brent. To gain credibility, benchmarks have to tick many boxes, notes Paul Horsnell of Standard Chartered, a bank. Having sufficient production of the underlying crude is one of them, and it is where Brent struggles. But aspiring substitutes have bigger flaws. Some are dominated by a single buyer or seller; many are impaired by distorting tax regimes, feeble rule of law and political interference. Despite trying for years, none of Brent’s rivals has managed to break out, says Colin Bryce, a former commodities boss at Morgan Stanley, another bank. The sole well-functioning alternative to Brent, which tracks prices of wti cargoes delivered in Cushing, Oklahoma, to satiate America’s home market, is too parochial.So the Brent show needed to go on. One way to prolong it might have been to add Johan Sverdrup, a prolific Norwegian field, into the Brent basket. The problem is that Sverdrup’s high density and sulphur content would have made it the odd one out. Such an addition may also have given too much power to Equinor, Norway’s state driller. Midland has issues, too. To make it comparable to North Sea grades, Platts will have to estimate and adjust for the cost of ferrying oil from America’s Gulf Coast to Rotterdam, making the index still more unwieldy. But the blend is similar to Brent, and the volumes of it delivered to Europe have surged of late, meaning it is a good mirror of oil demand in the bloc.Because Brent deliveries are priced up to 30 days in advance, the inclusion of Midland started coming into force in May. The market so far seems to be accepting the change. The price difference between Brent forwards (the purchase of cargoes in advance) and futures (financial bets on the future spot price), which is positive in a healthy market, has returned to near usual levels, notes Mr Imsirovic. It had contracted when the change was first discussed.Risks remain. One is that Midland swamps the benchmark. In April 1.1m barrels of the stuff landed in Europe, more than the other five Brent grades combined. Had it been part of the basket in 2021, Argus, a rival to Platts, estimates that Midland would have set the price of Brent 68% of the time. So far, though, Midland appears to be chosen less often, perhaps because its inclusion in the basket is creating a bigger market for it, boosting its value. Another worry is that the change could favour a coterie of marketmakers, such as Glencore and Trafigura, that account for a large share of Midland shippings, and which may now be the only ones able to keep track of how Dated Brent is formed. The cast of Brent barons has evolved over time, however, suggesting barriers to entry are surmountable. In the 1980s Europe’s once-dominant oil firms were supplanted by Japan’s mighty trading houses, which were themselves dethroned by Wall Street banks at the turn of the millennium. The new-look benchmark is already enticing new players. In May Koch Industries, an American conglomerate, sold its first forward Brent cargo in nearly a decade.The biggest risk may be of a different nature. Tweaks to Brent used to emerge from within the oil industry. This time the initiative has come from a price-reporting agency, Platts, which wants to pre-empt a crisis with its own solution. Now that a precedent has been set, insiders worry that the result could be endless tinkering, needlessly raising questions about Brent’s robustness—the very outcome price-reporting agencies want to avoid. In 1976 the nymex potato-futures market, based on a red variety from Maine, imploded after speculators holding 1,000 contracts involving 23,000 tonnes of the crop failed to deliver on time. At fault were reckless attempts to squeeze supply, such as coaxing buyers into rejecting cartloads of the stuff on the pretext that they did not meet standards. Investors got burnt. jr Simplot, America’s potato prince, was still compensating counterparties a decade later. No other potato price has since managed to gather such clout. Making a hash of a Brent revamp would leave many more people holding a sizzling-hot spud. ■ More

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    The ‘great resignation’ — a trend that defined the pandemic-era labor market — seems to be over

    Workers quit their jobs in record numbers in 2021 and 2022 as ample job opportunities and higher pay lured them elsewhere.
    That Covid pandemic-era trend came to be known as the “great resignation.”
    The “quits rate” has steadily declined since peaking last year. In April 2023, it fell to its pre-pandemic average in 2019, according to the U.S. Bureau of Labor Statistics’ JOLTS report.

    Djelics | E+ | Getty Images

    During the past year, the rate at which Americans quit their jobs has steadily declined from a record high back to pre-pandemic levels — seeming to spell the end of the labor market trend that came to be known as the “great resignation,” labor economists said.
    The “quits rate” fell to 2.4% in April, down from 2.5% the month prior and from a 3% peak in April 2022, the U.S. Bureau of Labor Statistics reported Wednesday in the Job Openings and Labor Turnover Survey.

    This rate is the share of monthly quits (i.e., voluntary departures by workers) relative to total employment. It’s now roughly on par with the monthly pre-pandemic average between 2.3% and 2.4% in 2019.
    More from Personal Finance:Popular home improvements aren’t the ones with best returnDebt deal would push student loan borrowers to repay this fallMany companies adding, expanding tuition assistance
    “I think the great resignation as we know it is over,” said Daniel Zhao, lead economist at career site Glassdoor.
    “We are much closer to the labor market we had in 2019, which was hot but not overheating,” he added.

    Workers enjoyed historic leverage amid Covid

    Most workers who quit their jobs do so for new employment elsewhere. Quits, therefore, serve as a proxy for workers’ willingness or confidence in their ability to leave a job.

    Quits started to surge in early 2021 as Covid-19 vaccines rolled out to the masses and the U.S. economy started to reopen.
    Business’ demand for workers outstripped the supply of people looking for a job, giving workers an unprecedented amount of power in the labor market. Employers raised wages at the fastest pace in decades to compete for scarce talent.

    Higher pay and ample employment opportunities drove Americans to leave their jobs in record numbers. This so-called great resignation was largely about finding a better gig rather than not wanting a job, economists said.
    About 50.5 million people quit in 2022, besting the prior record set in 2021.
    “The pandemic gave workers more leverage than they’d ever had,” said Julia Pollak, chief economist at ZipRecruiter.
    The dynamic has changed, however. The U.S. labor market has gradually cooled, staffing shortages have become less of an issue and workers appear more nervous about the job outlook, Pollak said.

    We are much closer to the labor market we had in 2019, which was hot but not overheating.

    Daniel Zhao
    lead economist at Glassdoor

    In short, the labor market is returning to normal, and the balance of power has shifted, she said.
    While workers are unlikely to be “handed jobs on a platter” anymore, conditions remain favorable for them, Pollak added.  
    “There’s good normal and bad normal,” she said. “We’re still very much in the ‘good normal’ world.”

    Conditions are still favorable for job seekers

    It’s unclear if the labor market will cool further from here. The Federal Reserve forecasts a mild recession later this year, for example. That outcome is not assured, of course.
    In fact, certain metrics in the BLS’ JOLTS report suggest the job market became somewhat more favorable for workers in April. Job openings — a proxy for employer demand for workers — increased to 10.1 million after three consecutive months of declines, for example.
    While quits and job openings told different labor market stories in April, quits are generally a less volatile and more reliable indicator, economists said.

    “Looking at the hard economic data, things are still fairly strong” for job seekers, Zhao said.
    Due to economic uncertainty, however, it’s “more important than ever” for workers to do their research before accepting a job, he added.
    That might mean researching the financial stability of the company to which they’re applying and whether the company has had recent layoffs, Zhao said. It may also mean reaching out to company employees in their job network to gauge sentiment and confidence, he added.
    The Federal Trade Commission last week issued an alert warning consumers to beware of fake job advertisements posted by scammers. They repurpose outdated ads from real employers and trick applicants into sending them money, the FTC said. More

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    ‘The Little Mermaid’s’ box office will say a lot about Disney’s live-action remake strategy

    Disney’s live-action remake of “The Little Mermaid” had a solid opening weekend, but the film’s longevity at the box office will depend on word of mouth.
    Disney has carved out a solid theatrical business for live-action remakes of its litany of classic animated features, generating nearly $9 billion in global ticket sales from these films since 2010.
    Box office experts will be looking at “The Little Mermaid’s” second weekend in domestic theaters for an indication of the film’s longevity at the box office.

    Halle Bailey stars as Ariel in Disney’s “The Little Mermaid.”

    Disney’s “The Little Mermaid” hooked nearly $96 million over its first three days in North American theaters. That opening is on par with the $91 million “Aladdin” secured in 2019 on its way to more than $1 billion at the global box office.
    However, it doesn’t guarantee the company’s latest live-action remake will see the same success. The film will sink or swim on word of mouth.

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    Audience buzz has become an increasingly important factor in box office success in the wake of the pandemic. With so many entertainment options, even franchise films can have trouble luring in moviegoers. Those that skip out on seeing a film during its opening weekend can be enticed to cinemas by positive chatter, helping to bolster the film’s overall box office.
    Disney has seen firsthand what happens when audiences don’t connect with titles. The studio, which is known for its animated content, saw two of its recent releases — “Lightyear” and “Strange World” — flounder at the box office. Neither film was too well-received by critics, and previous releases going straight to Disney+ confused consumers about where to see the films.
    Meanwhile, Disney has carved out a solid theatrical business for live-action remakes of its litany of classic animated features, generating nearly $9 billion in global ticket sales from these films since 2010.
    The company’s success has inspired other studios to recreate popular animated features as live-action flicks. Universal Pictures and DreamWorks Animation is currently developing a live-action version of its widely successful animated trilogy “How to Train Your Dragon.” The film is due in theaters March 14, 2025.
    Although there were two live-action films based on “101 Dalmatians” in 1996 and 2000, Disney didn’t start producing these remakes in earnest until 2010’s “Alice in Wonderland.” That film was the first of the batch to generate more than $1 billion at the global box office, sparking the production of nearly a dozen other titles including: “Maleficent,” “Cinderella,” “The Jungle Book” and “Dumbo.”

    And there are more on the way. Disney recently announced plans to bring “Moana” and “Lilo and Stitch” to the real world. With Disney already looking to tap into newer animated favorites, Shawn Robbins, chief analyst at BoxOffice.com thinks it’s only a matter of time before the company looks to tap into recent hits like “Frozen” or even “Encanto.”

    These adaptations have had variable success over the last decade in a half, with some like “The Lion King” and “Beauty and the Beast” generating more than $1 billion each at the global box office, and others like “Dumbo” and “Alice Through the Looking Glass” each reaping under $350 million in receipts worldwide.
    “The long game for Disney must include a plan beyond the formidable triumvirate of Lucasfilm, Marvel and Pixar,” said Paul Dergarabedian, senior media analyst at Comscore. “Disney, having gone all-in on live action remakes of some of their most iconic titles featuring beloved characters to varying degrees of box office success.”
    The initial box office showing for “The Little Mermaid” should give Disney a “boost of confidence,” he added, since it shows that its live-action strategy is a viable one.

    Is it in theaters?

    However, for many viewers, Disney’s release strategy has become muddled in the wake of the pandemic. While the live-action version of “Lady and the Tramp” was made available to subscribers when the Disney+ streaming service first launched in late 2019, most consumers had come to expect these new adaptations to arrive on the big screen.
    When the pandemic shuttered theaters, Disney was forced to move 2020’s “Mulan” to Disney+ for a $30 rental fee and later release 2021’s “Cruella” in theaters and on streaming at the same time.
    The company didn’t release another live-action remake until late 2022, when the Tom Hanks-starring “Pinocchio” arrived on Disney+. The film was widely panned by critics and audiences, according to Rotten Tomatoes.
    “Peter Pan and Wendy,” which hit Disney+ in late April, also had middling reviews from critics (62% Fresh) and was overwhelmingly disliked by audiences, who gave it 11%.

    With only a few exceptions, audiences have been receptive to Disney’s classic animation remakes, often scoring them higher than critics on Rotten Tomatoes.
    “The degrees of success for Disney’s remakes can be seen pretty clearly in that it’s been the 1990s animation renaissance resonating the most again,” Robbins said. “That’s a result of those original stories being so beloved and the timely, generational hand-me-down tradition playing a role.”

    On the horizon

    Box office experts will be looking at “The Little Mermaid’s” second weekend in domestic theaters for an indication of the film’s longevity at the box office.
    For most films, a 50% to 70% drop is the norm. Major tentpole features often see box-office ticket sales fall in this range after reaching sky-high opening weekend numbers. While those kinds of films can continue on toward billion-dollar theatrical runs, this metric can indicate whether word-of-mouth is bringing new audiences to theaters or whether interest is waning.
    The live-action “Aladdin,” which also opened over Memorial Day Weekend, saw a 53% drop in ticket sales from its first week to its second. It continued to see ticket sales drops of 40% or less until August of that year.

    Upcoming live-action Disney remakes

    “Snow White and the Seven Dwarfs” — March 22, 2024
    “Mufasa: The Lion King” — July 5, 2024
    “Lilo & Stitch” — in development
    “Moana” — in development
    “Hercules” — in development
    “The Hunchback of Notre Dame” — in development
    “Robin Hood” — in development
    “The Aristocats” — in development
    “The Sword In The Stone” — in development
    “Bambi” — in development
    “Cruella” sequel — in development
    “The Jungle Book” sequel — in development

    If “The Little Mermaid” can mimic those drops and remain in the cultural zeitgeist through the summer, box office analysts foresee a sold domestic, and ultimately global, box office haul for the feature.
    That could be difficult, as the film is about to have some steep competition from Sony’s “Spider-Man Across the Spider-Verse,” which hits theaters Friday, as well as a number of upcoming family-friendly features. Paramount’s “Transformers: Rise of the Beasts” arrives June 9, Disney and Pixar’s “Elemental” as well as Warner Bros.’ “The Flash” debut June 16, and Universal’s “Ruby Gillman: Teenage Kraken” opens June 30.
    “Despite some of the backlash and lesser box office returns certain films have had, the Disney vault has shown how it continues to transcend and appeal to all ages,” said Robbins. “Some argue it has come at the expense of original movies, though. Ultimately, I think audiences want both. Fresh content and nostalgia-driven material both have their place.”
    Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal owns Rotten Tomatoes. More

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    MLB will broadcast San Diego Padres games after Diamond Sports stops payments

    Bally Sports San Diego said it would air its final Padres game Tuesday after bankrupt owner Diamond Sports opted to no longer make its rights payments.
    MLB announced it would take over the broadcast of Padres local games beginning Wednesday, a move it said would increase the team’s reach by more than two million homes.
    Diamond Sports said it would not make the rights payments after it couldn’t reach a deal with MLB on direct-to-consumer streaming rights for the Padres.

    Daniel Camarena of the San Diego Padres hits a grand slam during the fourth inning of a baseball game against the Washington Nationals at Petco Park in San Diego, July 8, 2021.
    Denis Poroy | Getty Images Sport | Getty Images

    The San Diego Padres have a new home base on TV.
    Major League Baseball will broadcast and produce the team’s local games beginning Wednesday, after the owner of Bally Sports San Diego, its regional sports network for local in-market games, dropped the team.

    Diamond Sports, which filed for bankruptcy in March, said its Bally Sports San Diego would air its last Padres game Tuesday after it opted not to make further rights payments to the team. The move comes as Diamond pushes for the direct-to-consumer streaming rights for all MLB teams that air on its regional sports networks.
    “MLB has forced our hand by its continued refusal to negotiate direct-to-consumer (DTC) streaming rights for all teams in our portfolio despite our proposal to pay every team in full in exchange for those rights,” a Diamond spokesperson said in a statement. The company has noted it has significant liquidity and is still able to make rights payments and air other MLB teams in its portfolio.
    MLB announced it would take over beginning with the Padres game against the Miami Marlins on Wednesday. Fans in the Padres’ market will be able to watch games on cable TV or through the league’s MLB.TV streaming app for $19.99 a month or $74.99 for the rest of the season.
    “As Commissioner Manfred previously stated, Major League Baseball is ready to produce and distribute Padres games to fans throughout Padres territory,” said Noah Garden, MLB chief revenue officer, in a release. “While we’re disappointed that Diamond Sports Group failed to live up to their contractual agreement with the Club, we are taking this opportunity to reimagine the distribution model, remove blackouts on local games, improve the telecast, and expand the reach of Padres games by more than 2 million homes.”
    The MLB takeover means local Padres games will no longer be subject to a blackout on MLB.TV, as is the case for other local teams. MLB added it would make games free through June 4 with a MLB login at MLB.com, Padres.com or in MLB apps.

    On cable TV, Padres games will be available through four providers: Charter Communications’ Spectrum, Cox Communications, DirecTV and AT&T U-verse. MLB said it would increase the reach of local Padres games from about 1.13 million homes to roughly 3.3 million homes.
    Bally Sports San Diego is backed by a joint ownership between Diamond and the team. The Padres signed a 20-year, $1.2 billion contract with Fox Sports in 2012.
    When Disney acquired assets from Fox, it had to offload the Fox Sports networks. Disney sold the networks, later rebranded as Bally Sports, to Sinclair Broadcast Group in 2019 for $10.6 billion, which included roughly $8 billion in debt.
    The debt load has hobbled the networks since then. Diamond is now an unconsolidated and independently run subsidiary of Sinclair.
    Streaming rights for MLB teams have been a particular sticking point between Diamond and the league for some time now. While Diamond had obtained streaming rights for all NBA and NHL teams it airs on its regional sports networks, it had been working on a team-by-team basis in the MLB.
    In earlier months, Diamond had skipped payments for other MLB teams, including the Arizona Diamondbacks, in a push to obtain the streaming rights. Diamond owns 19 regional sports networks under the Bally Sports brand.
    Diamond was forced earlier in the bankruptcy case to make partial payments to the teams it had stopped paying. More

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    Stocks making the biggest moves premarket: Advance Auto Parts, SoFi, Twilio and more

    An exterior view of the Advance Auto Parts store at the Sunbury Plaza, Sunbury, Pennsylvania.
    Paul Weaver | SOPA Images | Lightrocket | Getty Images

    Check out the companies making headlines in premarket trading.
    SoFi — The financial services platform added nearly 7%. A deal to raise the U.S. debt ceiling on track for a vote on Wednesday would resume student loan payments.

    Carvana — Shares fell nearly 4% in premarket trading. Carvana stock has been on fire so far this year with a 189% gain from the start of 2023.
    Anheuser-Busch — The beer giant declined 1.7%. Lower sales volume across the company’s portfolio of products underpinned the decline, with Bud Light leading the charge with a 25.7% fall for the week ending May 20, according to Evercore.
    Hewlett Packard Enterprise — Hewlett Packard Enterprise fell nearly 8% on the back of mixed quarterly numbers. The company earned an adjusted 52 cents per share, beating a Refinitiv forecast of 48 cents per share. However, revenue of $6.97 billion was below a consensus estimate of $7.31 billion.
    Twilio — Shares gained 3.6% after a report that Legion Partners is looking to make changes to the automated communications company’s board, as well as divestitures.
    Ambarella — The chip stock shed 18% after Ambarella shared disappointing guidance for the second quarter. Ambarella expects second-quarter revenue between $60 million and $64 million. Analysts expected guidance around $66.9 million, according to StreetAccount.

    Advance Auto Parts — The car parts retailer plummeted more than 25% after a wide earnings miss. The company reported an adjusted 72 cents per share against a Refinitiv consensus forecast of $2.57 per share. Advance Auto Parts also slashed its quarterly dividend.
    C3.AI — The artificial intelligence stock declined 5.8% ahead of of quarterly results on Wednesday. Analysts polled by FactSet forecast an adjusted quarterly profit of 3 cents per share.
    American Airlines – Shares of the air carrier rose about 2% premarket after the company raised expectations for the second quarter. American increased its earnings per share expectation from between $1.20 and $1.40 to between $1.45 and $1.65. It also increased its margin expectations, to between 12.5% and 14.5% from between 11% and 13%.
    — CNBC’s Samantha Subin, Fred Imbert and Tanaya Macheel contributed reporting More