Business

LAST NOVEMBER something strange happened in Mountain View. A thick fog enveloped the headquarters of Alphabet, the parent company of Google. Not the meteorological sort—this stretch of Silicon Valley is reliably sunny. It was a fog of confusion. Its cause was ChatGPT, an artificially intelligent conversationalist created by OpenAI, a startup backed by Microsoft. The effect was, by all accounts, panic. ChatGPT was giving uncannily humanlike answers to questions put to it by users. And answering questions is the bread and butter of Google’s lucrative search business. Were OpenAI and Microsoft, which in February launched an enhanced version of its Bing search engine, about to eat Google’s lunch?Eight months on the mist has mostly cleared. On July 25th the company reported another set of solid quarterly results. Revenues rose by 7% year on year, to $75bn. It continues to create piles of cash: in the 12 months to June it raked in $75bn of operating profit. Bing has taken no discernible bite out of Google’s share of global monthly search queries, which remains above 90%. Most important, Google has put to rest any notion that it has fallen behind technologically. In May Sundar Pichai, chief executive of both Google and its corporate parent, unveiled more than a dozen AI-powered products at I/O, an annual event for software developers. These included AI tools for Gmail, Google Maps and Google Cloud. Investors found it reassuring—not least after a rushed launch in February of Bard, Google’s chatbot, during which the AI helper made a factual error. Since then the firm has launched AI products and features left and right. On July 12th it brought out NotebookLM, an AI-assisted note-taking tool trained on a user’s documents. On the same day Nature, a scientific journal, published a paper by Google researchers describing an AI model that matched human doctors’ responses to questions about the right treatment for patients. A day later it expanded a now less error-prone Bard, proficient in more than 40 human languages and over 20 computer ones, to the EU. Work on an AI model to eclipse ChatGPT, codenamed Gemini, is proceeding apace. Having nearly fallen below $1trn in November, Alphabet’s market value is back up to $1.7trn. Crisis over? In the short run, probably. Like all heart-in-mouth moments, though, the chatbot panic invites broader questions: about the current state of one of the world’s biggest firms, its future and—as Google turns 25 in September—about the demands of different stages of corporate life. The view from the top Alphabet is, without a doubt, one of the greatest business successes of all time. Six of its products—Google search, the Android mobile operating system, the Chrome browser, Google Play Store for apps, Workspace productivity tools and YouTube—boast more than 2bn monthly users each. Add those with hundreds of millions of users, such as Google Maps or Google Translate, and, by one reckoning, humans collectively spend 22bn hours a day on Alphabet’s platforms.The ability to command so much attention is worth a lot of money to the people who want a slice of it, namely advertisers. Since going public in 2004 Google’s revenue, 80% of which comes from online ads, has grown at an average annual rate of 28%. In that period it has generated a total of $460bn in cash after operating expenses, virtually all of it from advertising. Its share price has risen 50-fold, making it the world’s fourth-most-valuable company. Given these eye-popping numbers, it may seem churlish to ask why Alphabet isn’t doing better. In fact, the question is warranted, and is being asked by Mr Pichai, his underlings and investors alike. The company finds itself at a delicate juncture—not only, or even primarily, because of AI. The core digital-ads business is maturing, with sales growth no longer consistently in double digits and increasingly tied to economic cycles. At the same time, finding new sources of material growth is difficult for a company that brings in $300bn in annual revenues. This quest is further complicated by investors calling for greater cost efficiency and capital discipline, which in turn requires a shake-up of its free-wheeling corporate culture. Consider the cash cow. Throughout the 2010s digital advertising seemed invulnerable to the business cycle. In good times advertisers spent like there was no tomorrow. In worse ones they diverted some of their non-digital marketing budgets online, where Google and other giants like Facebook (now Meta) offered to target adverts more precisely than a TV commercial or a page in a glossy magazine could. Now, as the online share of total ad spending touches two-thirds, businesses have smaller non-digital ad budgets to eat into. Insider Intelligence, a data firm, expects global sales of digital ads to increase by 10% or less annually in the next few years, down from a rate of 20% or so in the past decade (see chart 1). A slowdown last year offered a glimpse of the future, spooking investors. Nor can Google easily capture a bigger slice of the slower-growing pie. Trustbusters already believe its share is too high and have sued Google in America for abusing its search monopoly. Google’s arrangement with Apple, whereby it pays a reported $15bn a year to be the default search engine on the 2bn or so iDevices, has also come under scrutiny. Although search remains immensely lucrative, with operating margins of nearly 50%, according to Bernstein, a broker, how people look for things on the internet is changing. Most product searches these days start not on Google but on Amazon, the e-commerce giant. According to Google’s own executives, 40% of teenagers and young adults seek recommendations for things like restaurants or hotels on TikTok, a short-video app, or Instagram, a similar app from Meta. Google may entice some of these “search-nevers”, as Mark Shmulik of Bernstein calls them, to its platform, as YouTube is doing already with a TikTok lookalike called Shorts. Yet videos are unlikely to monetise as nicely as the search box. Then there are the chatbots and other “generative” AIs that, having been trained on a web’s worth of texts, images and sounds, can serve up simulacra of human-generated content. Mr Pichai’s insistence that Alphabet is an “AI-native” company rings true. Most observers believe that deep pockets and ample talent will allow Google to solve the technology’s teething problems, such as the bots’ tendency to “hallucinate” (make stuff up) or the high cost of serving up responses (which egg-headed Googlers are busy tackling). That still leaves open the question of how much money bot-assisted products, for all their expected ingenuity, will actually make. Set aside search, and Google’s knack for creating extraordinary products is matched by its inability to monetise them. There is no reason to think that its AIs More

New Covid vaccines are coming to the U.S. this fall — but many Americans may not take them.
Pfizer, Moderna and Novavax are slated to deliver new single-strain coronavirus shots targeting the omicron subvariant XBB.1.5 in September.
Experts told CNBC that public health officials and providers could potentially increase uptake of the shots by communicating that they will likely become a routine part of health care moving forward.

A pharmacist delivers a COVID-19 booster dose at a Chicago CVS store.
Antonio Perez | Tribune News Service | Getty Images

A new round of Covid vaccines is coming to the U.S. this fall — but many Americans may not roll up their sleeves and take one.
That’s largely because pandemic fatigue, the belief that Covid is “over” and confusion over personal risk levels could deter some people from getting an additional shot, experts in public health and health policy told CNBC.

But they said public health officials and health-care providers could potentially increase uptake of the new vaccines by communicating a new and simple message this fall: Covid vaccines are likely going to become a routine part of protecting your health moving forward. 
In September, vaccine manufacturers Pfizer, Moderna and Novavax are slated to deliver new single-strain Covid shots targeting the omicron subvariant XBB.1.5, the most immune-evasive strain of the virus to date. 
It will be a “very uphill battle” to get people to take those jabs, especially given the sluggish uptake of the most recent shots that rolled out, said Jen Kates, senior vice president of the health policy research organization KFF. 
Only about 17% of the U.S. population — around 56 million people — have received Pfizer and Moderna’s bivalent Covid vaccines since they were approved last September, according to the Centers for Disease Control and Prevention. Bivalent means they target two strains of the virus. 
Less than half of adults 65 and older have received a bivalent shot, while rates for all other age groups sit at around 20%. 

Pfizer, Moderna and Novavax have not provided exact estimates for what they expect uptake of their new shots to look like.
But a Pfizer spokesperson said overall the company expects 24% of the population, or 79 million people, to receive vaccine doses in 2023, which includes both primary doses and boosters. A Novavax spokesperson said the company has started “manufacturing at risk” and is “stockpiling enough material to support the upcoming launch for the season.”
All companies have noted that they are preparing for the federal government to shift vaccine distribution to the private market, meaning manufacturers will sell their updated shots directly to health-care providers at higher prices. Previously, the government purchased vaccines directly from manufacturers at a discount to distribute to the public for free. 
Regardless of that shift, experts say vaccine uptake may not look much different from that of the bivalent boosters. Here’s why.

Pandemic fatigue, confusion

Fatigue over the pandemic and the general belief that Covid is “over” could potentially hinder the uptake of new shots this fall, experts said.
A June poll conducted by Gallup found that 64% of Americans think the pandemic is over in the U.S. and only 18% are worried about contracting the virus.
Ipsos and Axios released a survey with similar findings in May, the same month the U.S. ended the national Covid public health emergency amid a downward trend in cases, hospitalizations and deaths.
But Covid is still killing people every day and isn’t going away anytime soon. Meanwhile, many Americans are becoming weary of recommendations for protection. That includes masking, testing for the virus and getting vaccinated.
“People have essentially moved on, especially given how long the pandemic has been,” Dr. Kartik Cherabuddi, a professor of medicine at the University of Florida, told CNBC.
He said that’s why it’s important to stress how people will personally benefit from receiving an additional vaccine this fall.
But there’s even a bigger problem: Personal Covid risks and benefits from getting another shot have been a major area of confusion for Americans, which could also hamper the uptake.
The confusion stems from the fact that “risk levels aren’t the same for everybody in the population right now,” and almost everyone has a different circumstance, according to Dr. Brad Pollock, chair of UC Davis Health’s department of public health sciences.
“It’s this perception of the individual. ‘Why should I get another booster? What is my risk? Why should I do it? Is it really worth doing now, or later?'” Pollock told CNBC. “I think everybody’s confused. And when they’re confused, they probably will do nothing until there’s more clarity.”

Safeway pharmacist Ashley McGee fills a syringe with the Pfizer COVID-19 booster vaccination at a vaccination booster shot clinic on October 01, 2021 in San Rafael, California.
Justin Sullivan | Getty Images

The CDC hasn’t recommended the updated shots to specific groups yet because they haven’t been approved by the Food and Drug Administration. But even after eligibility guidelines are formalized, confusion could remain.
Those at high risk of severe Covid, such as older adults and immunocompromised people, could potentially benefit more than the general population.
But even those patients have different circumstances: Some high-risk people may have recently received a fifth vaccine dose, which could push back when they can get the updated vaccine. Health officials usually recommend spacing out vaccinations over a specific number of months.
Meanwhile, some healthy adults may have four doses but may be unsure about getting another because the benefit of a fifth dose for those less vulnerable to severe Covid still isn’t clear, Pollock said. 
People who recently had Covid may also have to wait longer to get a new shot so they can maximize the protection they get from vaccination — a recommendation made when the bivalent boosters rolled out. 
But that could get even more complicated this fall, according to Cherabuddi. He said testing for Covid has dropped to new lows over the past year, “so we don’t even know who has been infected in the last few months.” 
Those individualized circumstances will likely make it more challenging for both health officials and health-care providers to convey clear messages about the updated vaccines this fall, Cherabuddi and other experts said.
The Health and Human Services Department did not immediately respond to CNBC’s request for comment.
Vaccine manufacturers have noted that they will continue to engage in a variety of outreach efforts to encourage the public to get vaccinated.

A new message may increase rates 

But KFF’s Kates said health officials and providers could potentially increase uptake if they communicate that Covid shots are “likely going to be more of a routine part of our health care going forward.” 
The FDA and CDC are hoping to transition toward a flu shot-like model for Covid vaccines, meaning people will get a single jab every year that is updated annually to target the latest variant expected to circulate in the fall and winter. 

A man walks past an urgent care facility offering flu shots in New York, the United States, on Dec. 7, 2022.
Michael Nagle | Xinhua News Agency | Getty Images

Kates said that schedule aims to simplify the process of getting vaccinated. For example, it will likely make it easier for Americans to remember to get a new vaccine every year and allow them to receive one with their flu shot during the same doctor’s visit.
“People might be more open to making this a normal part of what they do,” Kates said. “That contrasts with what we’ve seen in the past where there are different vaccines, different timing, different age groups and something new to consider every few months.”
There’s still uncertainty about whether the U.S. will update and distribute new shots on an annual basis, according to Kates.
Advisors to the FDA have raised concerns about shifting to yearly Covid vaccines, noting that it’s unclear if the virus is seasonal like the flu. 
A KFF poll released in April suggests that an annual schedule may boost uptake: More than half of the public said they would likely get an annual Covid shot if it was offered like an annual flu shot. That includes about a third who would be “very likely” to do so. 
Pfizer similarly told CNBC in May that an annual Covid schedule could encourage more people to vaccinate each year. The company is preparing to shift to that schedule by developing “next-generation” versions of its shot, which aim to extend the protection people get from the virus to a full year.

Commercial market may not change much 

It’s unclear whether the U.S.’s shift to the commercial market will affect the uptake of the new vaccines. 
It may not change much for insured Americans. Private insurers and the government-run Medicare and Medicaid programs are required to cover all shots recommended by the CDC, meaning most of the insured will continue to get Covid shots for free. 
Federal and corporate programs are aiming to fill the gap for the 25 million to 30 million uninsured adults in the U.S. That includes the Biden administration’s Bridge Access Program, which plans to provide free Covid vaccines to uninsured people through 2024. 
Kates said it’s “still hard to gauge” how many uninsured people will benefit from those efforts. 
She also noted that a shift in access could potentially lower uptake among the group. “Somebody might be worried that they won’t get their vaccine covered or they’ll be asked to pay for it when they can’t afford it. That could be a big deterrent,” Kates said. 
But Dr. Helen Chu, an epidemiology professor at the University of Washington, said the uninsured have continued to lag behind their insured counterparts in terms of vaccine uptake even “when shots were freely available to them.”
A KFF survey conducted in March found that only 22% of uninsured Americans under 65 were both vaccinated and boosted against Covid, compared with 44% of insured people in that age group. Another KFF survey from mid-2021 showed similar findings.
“I’m not sure that a person’s insurance status was necessarily the driver of the low uptake we’ve seen, or whether it will be the driver of potentially low uptake in the fall as well,” Chu told CNBC.  More

A federal bankruptcy judge rejected Johnson & Johnson’s second attempt to resolve tens of thousands of lawsuits alleging the company’s talc products caused cancer. 
J&J in 2021 offloaded those talc liabilities into a new subsidiary, LTL Management, and immediately filed for Chapter 11 bankruptcy protection. 
Judge Michael Kaplan said in an opinion that LTL Management’s second bankruptcy must be dismissed because its subsidiary was not in “imminent” or “immediate financial distress.” 

In this photo illustration, a container of Johnson and Johnson baby powder is displayed on April 05, 2023 in San Anselmo, California. 
Justin Sullivan | Getty Images

A federal bankruptcy judge on Friday rejected Johnson & Johnson’s second attempt to resolve tens of thousands of lawsuits alleging the company’s talc baby powder and other talc-based products caused cancer. 
J&J in 2021 offloaded those talc liabilities into a new subsidiary, LTL Management, and immediately filed for Chapter 11 bankruptcy protections. 

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2 days ago

Judge Michael Kaplan in Trenton, New Jersey, said in an opinion that LTL Management’s second bankruptcy must be dismissed because the subsidiary was not in “imminent” or “immediate financial distress.” A U.S. appeals court in April dismissed the first bankruptcy attempt over the same reason. 
The decision jeopardizes J&J’s proposed $8.9 billion settlement that would stop new lawsuits from being filed. The company previously said more than 60,000 claimants have already committed to voting in favor of the plan.
“LTL commenced its bankruptcy case in good faith and in strict compliance with the Bankruptcy Code,” J&J said in a statement. 
“The Bankruptcy Code does not require a business to be engulfed in ‘flames’ to seek a reorganization supported by the vast majority of claimants,” said Erik Haas, J&J’s worldwide vice president of litigation in the statement.
J&J contends that research and clinical evidence demonstrates that its talc products remain safe. More

Ford executives said the automaker is working on a slate of new hybrid models.
The comments run slightly counter to recent messaging from the Detroit automakers.
“What the customer really likes is when we take a hybrid system that’s more efficient for certain duty cycles and then we add new capabilities because of the batteries,” CEO Jim Farley said after the company’s second-quarter earnings report.

Ford Motor Co. displays a new 2021 Ford F-150 pickup truck at the Rouge Complex in Dearborn, Michigan, Sept. 17, 2020.
Rebecca Cook | Reuters

Heads up, hybrid fans: Ford Motor is working on a whole bunch of new hybrid models.
“You’re going to see a lot more hybrid systems from us,” CEO Jim Farley said Thursday after the company reported second-quarter earnings that revealed widening losses on its electric vehicles unit.

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The comments run slightly counter to recent messaging from the Detroit automakers, which have touted the performance and popularity of all-electric favorites as the industry moves to meet EV targets. The hybrid hype, however, falls more closely in line with global hybrid leader Toyota, which has faced criticism for what some saw as resistance to the EV transition.
To be clear, Ford isn’t turning away from its much-touted EV push, though it said Thursday that its EV ramp-up may take longer than it had previously anticipated.
But even as it spends billions to ramp up EV production, it’s planning to bring more hybrid options to market, driven by the success of its current gasoline-electric options.
“We have been surprised, frankly, at the popularity of hybrid systems for F-150,” Farley said during Ford’s second-quarter earnings call. More than 10% of F-150 pickup customers are opting for the hybrid model, Farley said, and that percentage has been increasing.
Ford also offers a hybrid version of its small Maverick pickup. That has been an even greater success, Farley said, with more than half of Maverick buyers — 56% — choosing the $1,500 optional hybrid powertrain over the standard four-cylinder engine.

But why double down on hybrids just as the industry is making a big push toward pure EVs?
“What the customer really likes is when we take a hybrid system that’s more efficient for certain duty cycles and then we add new capabilities because of the batteries,” Farley said.
Among those new capabilities: Ford’s “Pro Power Onboard” system, which gives customers the ability to tap the truck’s electricity via outlets in the pickup bed to power tools at a job site — or a refrigerator at a tailgate party — eliminating the need to carry a separate generator.

An available 7.2 kilowatt onboard generator that Ford is calling the “Pro Power Onboard” features four 120V 20A outlets and one NEMA L14-30R 240V 30A on the 2021 Ford F-150.

“We’re seeing a lot of customers like that combination of using the batteries for something beyond just moving the vehicle,” Farley said. “And so we’re just listening to the market.”
Ford has heavily promoted the capabilities of its battery-electric F-150 Lightning pickup, which offers the ability to power an entire house for several days.
It may be that in hearing from customers, Ford has determined the popularity of that capability is outrunning the willingness to go all electric. As executives noted Thursday, EV adoption is moving more slowly than expected.
So, in the meantime, Ford can offer power-hungry but EV-wary drivers an in-between option, with hybrid options across its internal-combustion lineup.
“But don’t think of them in the traditional sense of an Escape hybrid or a [Toyota] Prius,” Farley said. “They’re probably going to come to light differently than most people think.”
“And customers like that.” More

United Launch Alliance still plans to fly its heavy-lift Vulcan rocket by late 2023 — despite suffering a mishap earlier this year after an engine exploded during testing.
As military space launches foresee a capacity crunch, the U.S. Space Force plans to expand its list of rocket launch providers beyond ULA and SpaceX, possibly opening opportunities in the competitive landscape.
ULA CEO Tory Bruno hints at talks with smaller players to obscure military payloads to counter adversaries’ anti-satellite capabilities.

The Vulcan rocket for the Cert-1 mission stands at SLC-41 during testing in Cape Canaveral, Florida, May 12, 2023.
United Launch Alliance

United Launch Alliance still plans to fly its heavy-lift Vulcan rocket by late 2023 — despite suffering a mishap earlier this year after an engine exploded during testing.
CNBC previously reported that one of Blue Origin’s BE-4 engines, ordered for ULA’s second Vulcan rocket launch, detonated last month. ULA CEO Tory Bruno said in an interview for CNBC’s “Manifest Space” podcast that the engine faced setbacks during its acceptance phase, but that such occurrences are not uncommon.

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“[It] happens in a production run on a rocket — somewhere on the rocket — pretty much every month, and it won’t be news once the other things we’re doing are less interesting,” Bruno explained. “The ones at the launch site have already been through this successfully and even been hot fired in the flight readiness firing.”
Vulcan’s first flight has been delayed several times due to necessary modifications. The debut flight will launch two demo satellites for Amazon’s Project Kuiper. The tech giant is planning on spending $120 million on building a facility at NASA’s Kennedy Space Center for developing satellites for its internet service network.
United Launch Alliance, the joint venture of Lockheed Martin and Boeing, is one of two key launch partners for the satellite project, in addition to Jeff Bezos-backed Blue Origin.

Follow and listen to CNBC’s “Manifest Space” podcast, hosted by Morgan Brennan, wherever you get your podcasts.

Once United Launch Alliance successfully conducts its first two Vulcan missions, the U.S. Space Force will consider clearing the heavy rocket for national security launches. The military division equally divided contracts between ULA and SpaceX for the 12 military missions it’s designated for launch in 2025, with Vulcan selected to fly two missions for the National Reconnaissance Organization.
While only two companies are currently cleared for national security space launches, the Space Force is expanding its list of future rocket launches — and opening the program up to more launch providers.

When asked about the expanded program, Bruno told CNBC that ULA is seeking clarity from the Space Force.
“There is certainly an effort for capacity,” Bruno said. “But in terms of a competitive landscape, it’s not competition if everybody wins.”
The growing demand for military space, however, speaks to a key focus for Bruno: that space is not simply a force multiplier, but “absolutely required for basic military effectiveness” against other nations, particularly China.
As the country has rapidly developed anti-satellite weaponry, the ULA CEO hinted that the company is looking to accelerate its in-space services. According to Bruno, United Launch Alliance is in talks with smaller players to obscure the location of military payloads once they’re in orbit, thereby making it more difficult for opponents to target them.
“It’s a little bit of a fever pitch,” Bruno said. “We have to deal with this problem urgently.”

“Manifest Space,” hosted by CNBC’s Morgan Brennan, focuses on the billionaires and brains behind the ever-expanding opportunities beyond our atmosphere. Brennan holds conversations with the mega moguls, industry leaders and startups in today’s satellite, space and defense industries. In “Manifest Space,” sit back, relax and prepare for liftoff. More

Procter & Gamble beat Wall Street’s expectations for its quarterly earnings and revenue.
But the company issued a fiscal 2024 outlook that fell short of Wall Street’s expectations.
For the fifth consecutive quarter, P&G’s volume fell.

Tide laundry detergent is shown on display in Compton, California, U.S., January 10, 2017. 
Mike Blake | Reuters

Procter & Gamble on Friday reported quarterly earnings and revenue that beat analysts’ expectations, thanks to price hikes for products like Crest toothpaste and Pampers diapers.
But the company released a gloomy outlook for its fiscal 2024 sales that fell short of Wall Street’s estimates.

Still, shares of P&G rose 1.5% in premarket trading.
Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $1.37 vs. $1.32 expected
Revenue: $20.55 billion vs. $19.98 billion expected

The Tide detergent owner reported fiscal fourth-quarter net income of $3.38 billion, or $1.37 per share, up from $3.05 billion, or $1.21 per share, a year earlier.
Net sales rose 5% to $20.55 billion. Its organic revenue, which strips out the impact of foreign currency, acquisitions and divestitures, increased 8% in the quarter.
For fiscal 2024, P&G is forecasting that its revenue will grow 3% to 4%, lower than Wall Street’s expectations of 4.5% sales growth. The company is also projecting earnings per share growth of 6% to 9%, which is on the lower end of analysts’ forecast of 8.8%.

But one bright spot is a $400 million after-tax benefit from favorable commodity costs, even including currency tail winds.
For roughly two years, P&G has been raising prices on its products to mitigate higher commodity costs. Yet customers haven’t been as willing to stick with P&G’s brands, leading to five consecutive quarters of volume declines. Volume excludes the impact of currency and pricing changes to reflect demand.
P&G’s volume fell 1% during the quarter.
The company’s health-care segment reported the largest drop in volume at 3%. The division, which includes Oral-B and Pepto-Bismol, scared off North American customers with its higher prices, according to P&G. Europe and Asia-Pacific also saw market contractions.
P&G’s fabric and home-care business, which includes Tide and Febreze, saw its volume fall 2%. The company said customers in China were buying fewer fabric-care products, like Bounce dryer sheets and Downy detergent.
The company’s grooming segment, which includes Gillette and Venus razors, reported its volume shrank 1% in the quarter.
P&G’s baby, feminine and family care and beauty segments reported flat volume for the quarter. More

The historic box office combination of Warner Bros. Discovery’s “Barbie” and Universal’s “Oppenheimer” arrived at a time when even the most dependable franchise movies have failed to lure in audiences.
“Barbenheimer’s” historic weekend was fueled by a sense of urgency, which the box office has been lacking in recent months.
The two movies will face some competition from Disney’s “Haunted Mansion” this coming weekend, but box-office analysts expect word of mouth to fuel ticket sales for both “Barbie” and “Oppenheimer” in the weeks to come.

An employee adds letters for upcoming film releases “Oppenheimer” and “Barbie” to a marquee at the Colonial Theater in Phoenixville, Pennsylvania, July 16, 2023.
Hannah Beier | The Washington Post | Getty Images

Hollywood’s biggest weekend at the box office in years wasn’t fueled by superheroes, Jedi or the promise of a sequel.
Sure, there were big names: Barbie, the iconic fashion doll; Oppenheimer, the father of the atomic bomb; and, of course, directors Greta Gerwig and Christopher Nolan.

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But what set “Barbenheimer” weekend apart was fresh storytelling, a fear of missing out on a cultural moment and a desire to experience movies on the biggest screen possible.
“They did a great job of positioning it as a movie that not only needed to be seen in theaters, but needed to be seen with your friends in a theater,” said Mike Polydoros, CEO at cinema marketing firm PaperAirplane Media.

‘At a crossroads’

The historic box office combination of Warner Bros. Discovery’s “Barbie” and Universal’s “Oppenheimer” arrived at a time when even the most dependable franchise movies have failed to lure in audiences.
Marvel and DC movies aren’t pulling in the same ticket sales as they did before the Covid-19 pandemic, nor are new installments in film series such as Mission Impossible, Fast and Furious, Indiana Jones and Transformers.
Movie nostalgia is no longer enough to inspire consumers to leave their couches for cinemas.

“The industry is at a crossroads,” said Shawn Robbins, chief analyst at BoxOffice.com. “The success of ‘Oppenheimer’ and ‘Barbie’ shows why studios need to start thinking more outside the box while allowing creative talent the room to do what they do best. Gone are the days when a brand can simply be slapped onto a product and people be expected to show up in droves just because they have before or because an algorithm suggests they will.”Together, “Barbie” and “Oppenheimer” generated $244.5 million during their first three days in theaters — $162 million for “Barbie” and $82.5 million for “Oppenheimer.”
Adding ticket sales from Paramount’s newest “Mission: Impossible” film, Sony’s “Spider-Man: Across the Spider-Verse” and Angel Studios’ “The Sound of Freedom,” the weekend box office topped $311 million, the fourth-highest weekend haul in history.

The FOMO effect

“Barbenheimer’s” historic weekend was also fueled by a sense of urgency, which the box office has been lacking in recent months.
“A fear of missing out on such a special moment motivated people to see one or both, perhaps sooner than they ordinarily would have,” Robbins said.
Audiences were drawn to see “Oppenheimer” on the biggest screen possible, or in specialty theaters that showed the exclusive 70mm footage of Nolan’s biopic. Nolan’s films have come to be event cinema, as the director shies away from computer-generated images in favor of practical effects and is known for creating powerful visuals.
As for “Barbie,” a huge draw for audiences was the communal experience of donning bubblegum pink and going out in large groups, and, of course, Gerwig, who is known for her sharp, witty dialogue and focus on female-driven stories.

Meme-worthy

Another piece of the appeal was the fact that the two films were so drastically different.
“They compounded one another’s success via the Barbenheimer meme, as it organically took over the pop culture consciousness and crossed over into mainstream channels that don’t normally include movies in their casual daily discourse,” Robbins said.
He noted that both films would have been box-office hits regardless, but “the mystique of them opening on the same day elevated their profiles to an entirely new level.”
The meme-worthy trend of seeing both in the same day drove hundreds of thousands of people to cinemas over the weekend. Typically, two films arriving on the same weekend from rival studios would lead to cannibalization of ticket sales.

“The fact that it was serendipitous was a salient element,” said Robert Thompson, a professor at Syracuse University and a pop culture expert. “That this was not part of a top-down marketing scheme gave it extra voltage.”
The momentum of “Barbenheimer” isn’t over.
IMAX screens that have the 70mm showings of “Oppenheimer” are sold out for weeks to come and “Barbie” continues to draw in moviegoers even on weekdays.
On Monday, “Barbie” added $26 million to its haul, the biggest Monday in the history of Warner Bros. and the best ever for a female director. It added another $26 million Tuesday, extending its domestic box office to $214 million through its first five days in theaters.
“Lest anyone think this was a mere flash in the pan, the upcoming weekend should see tremendous sophomore sessions for both films,” said Paul Dergarabedian, senior media analyst at Comscore, noting that curiosity and repeat viewings will continue to drive ticket sales.
“Barbenheimer” will face some competition from Disney’s “Haunted Mansion” this coming weekend, but box-office analysts expect word of mouth to fuel ticket sales for both “Barbie” and “Oppenheimer” in the weeks to come.
“These films aren’t going to face significant competition for the rest of summer either, which means their stellar opening weekends should be followed by robust staying power going into the final weeks of summer and early fall,” Robbins said. “It’s truly a duo that will go down in the annals of movie history.”
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal distributed “Oppenheimer.” More

Ford Motor on Thursday raised its 2023 guidance after second-quarter earnings significantly beat Wall Street expectations, boosted by strong pricing and demand for the automaker’s traditional vehicles.
Ford increased its full-year adjusted earnings forecast to a range of between $11 billion and $12 billion, up from a prior forecast $9 billion and $11 billion.
EV adoption, however, is taking place more slowly than the company expected, in part because of higher costs.

Ford Mustang on display at the NY Auto Show, April 6, 2023.
Scott Mlyn | CNBC

DETROIT — Ford Motor on Thursday raised its 2023 guidance after second-quarter earnings significantly beat Wall Street expectations, boosted by strong pricing and demand for the automaker’s traditional vehicles even as adoption of EVs took hold slower than the company expected.
Ford increased its full-year adjusted earnings forecast to a range of between $11 billion and $12 billion, up from a prior forecast $9 billion and $11 billion. It also upped its expected adjusted free cash flow to a range of $6.5 billion to $7 billion from earlier guidance of $6 billion.

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There was pressure on Ford to raise its guidance after crosstown rival General Motors raised its yearly guidance Tuesday for the second time this year.
Ford finance chief John Lawler said vehicle demand and pricing were “holding up” better than the company anticipated at the beginning of the year for its traditional businesses. However, he said, electric vehicle adoption is taking place more slowly than the company expected, in part because of higher costs.
Ford’s traditional business operations, known as Ford Blue, earned $2.31 billion during the quarter, while it’s Ford Pro commercial business earned $2.39 billion. Its “Model e” electric vehicle unit lost $1.08 billion from April through June.
The company said it now expects to lose $4.5 billion on the EV business this year, widening losses from roughly $3 billion a year earlier.
Here’s how Ford did during the second quarter, compared with what Wall Street expected based on average estimates compiled by Refinitiv:

Adjusted earnings per share: 72 cents vs. 55 cents expected
Automotive revenue: $42.43 billion vs. $40.38 billion expected

The automaker reported net income of $1.92 billion, or 47 cents per share, substantially up from a year earlier when it earned $667 million, or 16 cents per share.
Ford said its adjusted earnings before interest and tax, or adjusted EBIT, jumped to $3.79 billion, up from $3.72 billion a year ago. Its adjusted margin dropped to 8.4%, from from 9.3% in the year-ago period, amid increased production and sales.
Total revenue for the quarter was $45 billion, up 12% from $40.2 billion a year earlier.
It’s the second quarterly report in which the automaker broke down its financial results by business unit instead of by region.
— CNBC’s Michael Bloom contributed to this report. More