Business

Ford on Monday announced significant price cuts for all versions of its electric F-150 Lightning pickup.
The cheapest version of the Lightning will now start at about $50,000, a roughly $10,000 cut.
All versions of the EV will get price cuts of at least $6,000 as Ford works to boost production this fall.

A Ford F-150 Lightning electric truck is on display at the 2022 North American International Auto Show NAIAS in Detroit, the United States, on Sept. 14, 2022. 
Michael Strong | Xinhua News Agency | Getty Images

Ford Motor on Monday cut prices for its electric F-150 Lightning pickup, saying its efforts to boost production and lower costs for battery minerals have paid off.
Ford said prices for some of the least expensive versions of the Lighting would fall by nearly $10,000. Prices for all versions, including the top-line Platinum trim, will drop by at least $6,000 from levels set in March.

The company had increased the Lightning’s prices several times since its 2021 debut, citing supply constraints and sharply higher prices for the minerals used in the electric truck’s batteries. Ford has worked to increase production of the truck in recent months, with factory upgrades that are expected to triple its output set to be in place by fall.
The Dearborn, Michigan factory that makes the Lightning will be closed for several weeks while the production upgrades are put in place, Ford said Monday.
Increasing production of the Lightning and other Ford EVs has been a key priority for CEO Jim Farley this year. But the effort to boost production hasn’t been a smooth one. Ford sold just 4,466 Lightnings in the second quarter after a fire in a just-completed truck in February led it to shut down production for five weeks.
At the time of its 2021 debut, the lowest-priced version of the Lightning – the work-truck Pro trim – was about $40,000. That price was increased several times, hitting about $60,000 in March; Monday’s cuts reduce the entry-level truck’s sticker price to about $50,000.
The most expensive version of the Lightning, the extended-range Platinum trim, will now start at about $92,000, down from just over $98,000.
Ford is scheduled to report its second-quarter earnings after the U.S. markets close on July 27. More

Media companies are struggling with two Hollywood strikes, slumping ad revenue and money-losing streaming businesses.
Disney CEO Bob Iger recently told CNBC that the company’s legacy TV operations may not be core to its business.
Netflix, which is performing much better than its rivals, kicks off media earnings season Wednesday.

Striking Writers Guild of America (WGA) members walk the picket line in front of Netflix offices as SAG-AFTRA union announced it had agreed to a ‘last-minute request’ by the Alliance of Motion Picture and Television Producers for federal mediation, but it refused to again extend its existing labor contract past the 11:59 p.m. Wednesday negotiating deadline, in Los Angeles, California, July 12, 2023.
Mike Blake | Reuters

Traditional TV is dying. Ad revenue is soft. Streaming isn’t profitable. And Hollywood is practically shut down as the actors and writers unions settle in for what is shaping up to be a long and bitter work stoppage.
All of this turmoil will be on investors’ minds as the media industry kicks off its earnings season this week, with Netflix up first on Wednesday.

Netflix, with a new advertising model and push to stop password sharing, looks the best positioned compared with legacy media giants. Last week, for instance, Disney CEO Bob Iger extended his contract through 2026, telling the market he needed more time at the Mouse House to address the challenges before him. At the top of the list is contending with Disney’s TV networks, as that part of the business appears to be in a worse state than Iger had imagined. “They may not be core to Disney,” he said.
“I think Bob Iger’s comments were a warning about the quarter. I think they are very worrying for the sector,” said analyst Michael Nathanson of SVB MoffettNathanson following Iger’s interview with CNBC’s David Faber on Thursday.
Although the soft advertising market has been weighing on the industry for some quarters now, the recent introduction of a cheaper, ad-supported option for services like Netflix and Disney+ will likely be one bright spot as one of the few areas of growth and concentration this quarter, Nathanson said.
Iger has talked at length in recent investor calls and Thursday’s interview about how advertising is part of the plan to bring Disney+ to profitability. Others, including Netflix, have echoed the same sentiment.
Netflix is scheduled to report earnings after the close Wednesday. Wall Street will be keen to hear more details about the rollout of its password sharing crackdown in the U.S. and state of its newly launched ad-supported option. The company’s stock is up nearly 50% this year, after a correction in 2022 that followed its first subscriber loss in a decade

Investor focus will also be on legacy media companies like Paramount Global, Comcast and Warner Bros. Discovery, which each have significant portfolios of pay-TV networks, following Iger’s comments that traditional TV “may not be core” to the company and all options, including a sale, were on the table. These companies and Disney will report earnings in the weeks ahead.

Strike woes

Scene from “Squid Game” by Netflix
Source: Netflix

Just a week ahead of the earnings kickoff, members of The Screen Actors Guild – American Federation of Television and Radio Artists joined the more than 11,000 already striking film and television writers on the picket line.
The strike – a result of the failed negotiations with the Alliance of Motion Picture and Television Producers – brings the industry to an immediate halt. It’s the first dual strike of this kind since 1960.
The labor fight blew up just as the industry has moved away from streaming growth at all costs. Media companies saw a boost in subscribers – and stock prices – earlier in the Covid pandemic, investing billions in new content. But growth has since stagnated, resulting in budget cuts and layoffs.
“The strike happening suggests this is a sector in tremendous turmoil,” said Mark Boidman, head of media and entertainment investment banking at Solomon Partners. He noted shareholders, particularly hedge funds and institutional investors, have been “very frustrated” with media companies.
Iger told CNBC last week the stoppage couldn’t occur at a worse time, noting “disruptive forces on this business and all the challenges that we’re facing,” on top of the industry still recovering from the pandemic.
These are the first strikes of their kind during the streaming era. The last writers strike occurred in 2007 and 2008, which went on for about 14 weeks and gave rise to unscripted, reality TV. Hollywood writers have already been on strike since early May of this year.
Depending on the longevity of the strike, fresh film and TV content could dry up and leave streaming platforms and TV networks – other than library content, live sports and news – bare.
For Netflix, the strikes may have a lesser effect, at least in the near term, Insider Intelligence analyst Ross Benes said. Content made outside the U.S. isn’t affected by the strike — an area where Netflix has heavily invested.
“Netflix is poised to do better than most because they produce shows so well in advance. And if push comes to shove, they can rely on international shows, of which they have so many,” said Benes. “Netflix is the antagonist in the eyes of strikes because of how it changed the economics of what writers get paid.”

Traditional TV doom

The decline of pay-TV subscribers, which has ramped up in recent quarters, should continue to accelerate as consumers increasingly shift toward streaming.
Yet, despite the rampant decline, many networks remain cash cows, and they also supply content to other parts of the business — particularly streaming.
For pay-TV distributors, hiking the price of cable bundles has been a method of staying profitable. But, according to a recent report from MoffettNathanson, “the quantity of subscribers is falling far too fast for pricing to continue to offset.”
Iger, who began his career in network TV, told CNBC last week that while he already had a “very pessimistic” view of traditional TV before his return in November, he has since found it’s even worse than he expected. The executive said Disney is assessing its network portfolio, which includes broadcaster ABC and cable channels like FX, indicating a sale could be on the table.
Paramount is currently considering a sale of a majority stake in its cable-TV network BET. In recent years Comcast’s NBCUniversal has shuttered networks like NBC Sports and combined sports programming on other channels like USA Network.
“The networks are a dwindling business, and Wall Street doesn’t like dwindling businesses,” said Nathanson. “But for some companies, there’s no way around it.”
Making matters worse, the weak advertising market has been a source of pain, particularly for traditional TV. It weighed on the earnings of Paramount and Warner Bros. Discovery in recent quarters, each of which have big portfolios of cable networks.
Advertising pricing growth, which has long offset audience declines, is a key source of concern, according to MoffettNathanson’s recent report. The firm noted that this could be the first nonrecessionary year that advertising upfronts don’t produce increases in TV pricing, especially as ad-supported streaming hits the market and zaps up inventory.
Streamers’ introduction of cheaper, ad-supported tiers will be a hot topic once again this quarter, especially after Netflix and Disney+ announced their platforms late last year.
“The soft advertising market affects everyone, but I don’t think Netflix is as affected as the TV companies or other established advertising streamers,” said Benes. He noted while Netflix is the most established streamer, its ad tier is new and has plenty of room for growth.
Advertising is now considered an important mechanism in platforms’ broader efforts to reach profitability.
“It’s not a coincidence that Netflix suddenly became judicious about freeloaders while pushing a cheaper tier that has advertising,” said Benes, referring to Netflix’s crackdown on password sharing. “That’s pretty common in the industry. Hulu’s ad plan gets more revenue per user than the plan without advertising.”

Are more mergers coming?

Last week’s ruling from a federal judge that Microsoft’s $68.7 billion acquisition of game publisher Activision Blizzard should move forward serves as a rare piece of good news for the media industry. It’s a signal that significant consolidation can proceed even if there’s temporary regulatory interference.
Although the Federal Trade Commission appealed the ruling, bankers took it as a win for deal-making during a slow period for megadeals.
“This was a nice win for bankers to go into board rooms and say we’re not in an environment where really attractive M&A is going to be shot down by regulators. It’s encouraging,” said Solomon Partners’ Boidman.
As media giants struggle and shareholders grow frustrated, the judge’s ruling could fuel more deals as “a lot of these CEOs are on the defensive,” Boidman added.
Regulatory roadblocks have been prevalent beyond the Microsoft deal. A federal judge shut down book publisher Penguin Random House’s proposed purchase of Paramount’s Simon & Schuster last year. Broadcast station owner Tegna scrapped its sale to Standard General this year due to regulatory pushback.
“The fact that we are so focused on the Activision-Microsoft deal is indicative of a reality that deal-making is going to be an enormous tool going forward to solidify market position and jump your company inorganically in ways you couldn’t do yourself,” said Jason Anderson, CEO of Quire, a boutique investment bank.

These CEOs won’t just do a deal to do a deal. From this point forward, it will take a higher bar to consolidate.

Peter Liguori
former Tribune Media CEO

Anderson noted bankers are always thinking about regulatory pushback, however, and it shouldn’t necessarily be the reason deals don’t come together.
Warner Bros. and Discovery merged in 2022, ballooning the combined company’s portfolio of cable networks and bringing together its streaming platforms. Recently, the company relaunched its flagship service as Max, merging content from Discovery+ and HBO Max. Amazon bought MGM the same year.
Other megadeals occurred before that, too. Comcast acquired U.K. broadcaster Sky in 2018. The next year, Disney paid $71 billion for Fox Corp.’s entertainment assets – which gave Disney “The Simpsons” and a controlling stake in Hulu, but makes up a small portion of its TV properties.

“The Simpsons”: Homer and Marge
Getty / FOX

“The Street and prognosticators forget that Comcast and Sky, Disney and Fox, Warner and Discovery —happened just a few years ago. But the industry talks as if these deals happened in BC not AD times,” said Peter Liguori, former CEO of Tribune Media who’s a board member at TV measurement firm VideoAmp.
Consolidation is likely to continue once companies are finished working through these past mergers and get past lingering effects of the pandemic, such as increased spending to gain subscribers, he said. “These CEOs won’t just do a deal to do a deal. From this point forward, it will take a higher bar to consolidate.”
Still, with the rise of streaming and its lack of profitability and bleeding of pay-TV customers, more consolidation could be on the way, no matter what.
Whether M&A helps push these companies forward, however, is another question.
“My kneejerk reaction to the Activision-Microsoft ruling was there’s going to be more M&A if the FTC is going to be defanged,” Nathanson said. “But truth be told, Netflix built its business with licensing content and not having to buy an asset. I’m not really sure the big transactions to buy studios have worked out.”
– CNBC’s Alex Sherman contributed to this article.
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC. NBCUniversal is a member of the Alliance of Motion Picture and Television Producers. Comcast is a co-owner of Hulu. More

The U.S. Food and Drug Administration approved a birth control pill for use without a prescription for the first time in U.S. history this week.
Opill will be available in major stores and online in early 2024, according to the manufacturer Perrigo.
Women could face barriers to obtain Opill because health insurance is not currently required to cover birth control without a prescription.

A package of the daily contraceptive Opill is seen in an undated illustration.
Perrigo | via Reuters

The first birth control pill sold without a prescription in the U.S. could remain out of reach for some women and girls because health insurance plans are not required to cover the medication in its over-the-counter form.
The U.S. Food and Drug Administration on Thursday approved the sale of the oral contraceptive Opill without a prescription, a historic decision that should make birth control pills easier to obtain by eliminating the need to visit a doctor’s office and refill prescriptions.

One-third of adult women who have ever tried to obtain prescription contraception have faced barriers to access, according to a survey published in the Journal of Women’s Health in 2016.
Opill’s manufacturer Perrigo expects the pill to be available in major stores and online in early 2024. Perrigo will announce the price of Opill in a couple months before the pill is in stores, said Frederique Welgryn, a Perrigo executive, during a call with journalists Thursday.
Welgryn said the company is committed to ensuring Opill is affordable. Perrigo is setting up a patient assistance program so the cost of the pill is not a barrier for women struggling to make ends meet.
But some women and girls could still face barriers to obtain Opill. The Affordable Care Act does not require private health insurance to cover the cost of the pill when used without a prescription. Most health insurers are required to offer birth control for free when prescribed by a doctor.
State Medicaid programs are also generally not required to cover drugs sold without prescription, according to the federal Centers for Medicare & Medicaid Services.

Perrigo working on insurance coverage

Welgryn said Perrigo is working to enlist private insurance and state Medicaid programs to offer over-the-counter Opill to women and girls for free. But she said the Affordable Care Act needs to be tweaked to guarantee that health insurance pays for birth control without a prescription.
Welgryn said it is unclear whether insurance coverage for Opill will be in place when the pill is available in stores early next year. “We have some work to do to make that happen. It’s going to take time,” she said.
Democrats in Congress and President Joe Biden are pushing to expand access to contraception.

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Sen. Patty Murray, D-WA, reintroduced legislation called Affordability is Access in the Senate in May that would require health insurers to offer oral contraceptives without a prescription for free.
Biden ordered the U.S. Department of Health and Human Services in June to ensure all contraceptives approved by the FDA are available without out-of-pocket costs.
CMS is encouraging health insurance to cover over-the-counter contraceptive products for free, an agency spokesperson said Friday. The agency is working on ways to ensure contraceptives approved by the FDA for use without a prescription are available without cost sharing, the spokesperson said.
Opill is 93% effective at preventing pregnancy. It is the most effective form of over-the-counter contraception in the U.S. Opill should be taken at the same every day to ensure its effectiveness.
Welgryn said 15 million women in the U.S. who are sexually active and don’t want to get pregnant are using a form of contraception that is less effective than Opill or no contraception at all.
Nearly half the six million pregnancies in the U.S. every year are unintended, according to the FDA. Unintended pregnancy is linked to preterm delivery, which can result in poor health outcomes for newborns, according to the agency. More

Disney is on pace to be the box office ruler this year.
But the studio will likely not have a 2023 release that eclipses $1 billion at the global box office.
It’s not just a Disney problem, however. Before the Covid-19 pandemic, studios produced multiple mega blockbusters each year.

Chris Pratt and Charlie Day voice Mario and Luigi in Universal and Illumination’s “The Super Mario Bros. Movie.”

LOS ANGELES — It’s the billion-dollar question: Why are mega blockbusters in short supply this year?
Universal’s “The Super Mario Bros. Movie” is the only movie released in 2023 to so far eclipse the $1 billion mark at the global box office. It doesn’t look like there could be another one, even with some big titles on the calendar.

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“If you would have given 10 people a release schedule at the beginning of the year and said, ‘We will have just one billion-dollar movie out of all of these and can you pick which one it will be?’ I don’t think anyone would have taken ‘The Super Mario Bros. Movie’ as the one,” said Mike Polydoros, CEO at cinema marketing firm PaperAirplane Media.
The lack of billion-dollar grossers marks a dramatic change in the industry. In years before the Covid-19 pandemic, and even last year, there were multiple megahits eclipsing $1 billion in global grosses.
The lack of these kinds of blockbusters in 2023 is especially apparent at Disney, which has Marvel, Star Wars, Pixar and legacy fairy tale franchises. While the studio is on track to be the box office ruler this year, it has had a string of misfires in recent months that have drummed up concerns that audience preferences are changing too quickly for Hollywood to adapt.
“Ant-Man and the Wasp: Quantumania” failed to lure in audiences beyond the staunchest Marvel fans in February, tallying just $214.5 million domestically and under $500 million worldwide. “Elemental,” released just last month, currently holds the second-lowest domestic haul of any Pixar film in the history of the studio, barely outpacing 2020’s “Onward,” which saw its box office run cut short due to the pandemic.
At Disney’s Lucasfilm, “Indiana Jones and the Dial of Destiny,” which hit theaters June 30, is expected to struggle to recoup its nearly $300 million production budget. So far, it has generated $122.1 million at the domestic box office and $221.4 million globally.

“On the whole, I see Disney in a position that’s been mostly expected coming out of the pandemic and having gone through another leadership change,” said Shawn Robbins, chief analyst at BoxOffice.com. “Those two massively influential factors have reshaped the studio’s position in a number of ways, especially at the box office when considering the last decade saw their top franchises and brand fire on all cylinders. That kind of momentum was never going to be sustainable without the occasional ebb and flow.”
Disney CEO Bob Iger told CNBC’s David Faber on Thursday that the company would cut back on its Marvel and Star Wars content as it seeks to cut costs and rejuvenate its brands.
A bright spot for Disney has come in the form of James Gunn’s final bow at Marvel Studios. “Guardians of the Galaxy Vol. 3” is the third-highest grossing domestic release so far this year, with $357.5 million. It trails just behind Sony’s “Spider-Man: Across the Spider-Verse.” Gunn now helps lead Warner Bros. Discovery’s DC Studios.
The third Guardians film has managed to secure $834.2 million globally since its May release, but likely won’t hit the coveted billion-dollar threshold.
Notably, Disney’s “Avatar: The Way of Water” has generated more than $1 billion in global ticket sales in 2023, but because it was released in 2022, it doesn’t count as a billion-dollar movie for this year.
“The billion-dollar club seems to have become even more exclusive in 2023,” said Paul Dergarabedian, senior media analyst at Comscore. “Despite numerous high-profile titles boasting some of the biggest movie brands and franchises in filmdom, thus far, this year’s crop has lacked either the global footprint or the utter dominance of the marketplace to cross the $1 billion threshold in what has been a very competitive global movie marketplace.”

Top-grossing 2023 films globally

“The Super Mario Bros. Movie” (Universal) — $1.34 billion
“Guardians of the Galaxy Vol. 3” (Disney) — $834.2 million
“Fast X” (Universal) — $702.8 million
“Full River Red” (EDKO Films) — $647.8 million
“Spider-Man: Across the Spider-Verse” (Sony) — $643.5 million
“The Wandering Earth 2” (China Film Group Corporation) — $585.5 million
“The Little Mermaid” (Disney) — $542.9 million
“Ant-Man and the Wasp: Quantumania” (Disney) — $471.3 million
“Lost In The Stars” (Alibaba Pictures) — $428.5 million
“John Wick: Chapter 4” (Lionsgate) — $432.5 million

*This list does not include films released in 2022 that have generated ticket sales in 2023.

The Chinese market, in particular, was a major driving force in previous billion-dollar box office hits, but the region has been more selective about what Hollywood films it allows to be shown in the country. China has also developed its own lucrative film market.
For example, most Marvel films released pre-pandemic saw 15% to 22% of ticket sale totals from China. In the wake of the pandemic, only a handful of these comic book films have played on screens in the country and those that have, have seen significantly less receipts.
The first two Ant-Man films, released in 2015 and 2018, generated about 20% of ticket sales from China. Meanwhile, “Ant-Man and the Wasp: Quantumania” saw just 8% of tickets sold in China.
“Globally speaking, China’s evolution into a market that can no longer be counted on to deliver massive blockbuster performances by some films and franchises that used to do so leaves a hole that may be too big to fill in the short term,” said Robbins.

A dry spell

Fewer Chinese tickets sales coupled with slower-than-expected return from domestic moviegoers has stunted big blockbusters in 2023, leading to fewer billion-dollar films.
In the last decade, the number of billion-dollar global earners has increased significantly, with Disney responsible for the majority of chart-topping titles. In fact, the studio has had at least one billion-dollar release every year since 2014 through 2019, when it had seven billion-dollar films.
It did not produce a billion-dollar film in 2020 or 2021 due to pandemic restrictions, but 2022’s “Avatar: The Way of Water” topped $2 billion.
“As 2019 was an anomaly on the high side, I think 2023 can be looked at as an anomaly the other way,” said PaperAirplane’s Polydoros. “As they say with testing, throw out the highest and lowest and go from there. And I think that same theory applies to overall box office as a whole.”
Polydoros’ sentiment was shared by numerous box office analysts who spoke with CNBC. They noted that while many Disney releases have fallen below expectations, the studio remains a strong competitor at the domestic and global box office.
“It’s unlikely Disney will have a $1 billion global performer this year,” Dergarabedian said. “But, to be fair, ‘Guardians of the Galaxy Vol. 3,’ ‘The Little Mermaid,’ ‘Ant-Man and the Wasp: Quantumania’ and ‘Elemental’ have collectively earned over $2 billion globally.”

Still on top

Despite tepid results from the typically stalwart Disney, the studio has generated more domestic ticket sales than any other studio so far this year.

Through June, Disney’s releases represent 30% of all domestic ticket sales, or $1.3 billion, according to data from Comscore.
The studio also has four of the top 10 highest-grossing domestic film hauls so far this year.

Highest-grossing domestic films so far in 2023

“The Super Mario Bros. Movie” (Universal) — $573.7 million
“Spider-Man: Across the Spider-Verse” (Sony) — $357.6 million
“Guardians of the Galaxy Vol. 3” (Disney) — $357.5 million
“The Little Mermaid” (Disney) — $289.2 million
“Avatar: The Way of Water” (Disney) — $283 million
“Ant-Man and the Wasp: Quantumania” (Disney) — $214.5 million
“John Wick: Chapter 4” (Lionsgate) — $187.1 million
“Creed III” (MGM) — $156.2 million
“Transformers: Rise of the Beasts” (Paramount) — $146.8 million
“Fast X” (Universal) — $145.9 million

“As always, it comes down to the content,” said Polydoros.
It has yet to be seen if upcoming Disney releases, such as “Haunted Mansion,” “The Marvels” or “Wish,” will be able to generate the benchmark billion-dollar sum, but a diverse slate bodes well for the company.
“2024 does look more promising on several fronts, and their original animated film, ‘Wish,’ could be a big hit later this year if it lives up to its potential with audiences that helped make the ‘Frozen’ series so successful,” said Robbins.

Upcoming Disney releases

“Haunted Mansion” — July 28
“Vacation Friends 2” — Aug. 25
“Poor Things” — Sept. 8
“A Haunting in Venice” — Sept. 15
“The Creator” — Sept. 29
“The Marvels” — Nov. 10
“Next Goal Wins” — Nov. 17
“Wish” — Nov. 22
“Magazine Dreams” — Dec. 8

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. More

The partnership between JetBlue and American in the Northeast began in early 2021.
A federal judge ruled in May that the airlines’ partnership is anti-competitive and ordered them to unwind it.
JetBlue last week said it wouldn’t appeal the ruling so it can focus on buying Spirit.

American and JetBlue will stop selling seats on each other’s flights next Friday, two months after a federal judge ruled that the airlines’ partnership in the Northeast violated antitrust laws.
The judge ordered the airlines to end their more than two-year partnership, which allowed them to share passengers and revenue, and to coordinate schedules in the northeastern U.S. The airlines argued they needed to team up to better compete with rivals Delta and United at congested airports serving New York City and Boston.

The Justice Department, six states and the District of Columbia sued to block that partnership, winning their case on May 20.

A JetBlue Airways plane passes behind an American Airlines jet waiting to taxi at Ronald Reagan National Airport in Washington, D.C.
Andrew Harrer | Bloomberg | Getty Images

“We are disappointed to be ending popular benefits like codesharing and reciprocal loyalty benefits,” Dave Fintzen, vice president of the Northeast Alliance at JetBlue, said in a statement. “With the court’s recent ruling and the termination of the NEA, we have to sunset them in short order.”
JetBlue last week said it wouldn’t appeal the ruling so it can focus instead on its $3.8 billion acquisition of Spirit Airlines, a deal which the Justice Department has also challenged, though JetBlue said it didn’t agree with the judge’s ruling on the Northeast Alliance. American, however, said it still plans to appeal the ruling on the Northeast Alliance.
Earlier this week, the carriers’ websites still showed flight options on each other’s airline through the year-end holidays but such sales will only continue through July 20.
Both airlines said they would work with customers with existing bookings so their plans aren’t disrupted.

“This is just the first step in the wind-down process that will take place over the coming months,” American said in a release. “We will continue to work with the JetBlue team to ensure customers who have existing codeshare bookings can travel seamlessly without disruption to their travel plans.”
Thursday is also the last day that customers can use American AAdvantage frequent flyer miles to book flights on JetBlue. More

UnitedHealth Group’s stock price jumped after the health-care conglomerate reported second-quarter revenue and adjusted earnings that topped Wall Street’s expectations.
The company also raised the low end of its full-year adjusted earnings outlook. 
The results eased investor concerns after UnitedHealth flagged a surge in demand for non-urgent surgeries and outpatient services last month.

Representatives speak with customers at a UnitedHealthcare store in Queens, New York.
Michael Nagle | Bloomberg | Getty Images

UnitedHealth Group’s stock price jumped Friday after the health-care conglomerate reported second-quarter revenue and adjusted earnings that topped Wall Street’s expectations despite rising medical costs.
The results eased investor concerns after the Minnesota-based company flagged a surge in demand for non-urgent surgeries and outpatient services last month and spooked the market.

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Shares of UnitedHealth closed up more than 7% Friday. The stock is down more than 9% so far this year, however.
UnitedHealth Group is the biggest health-care company in the U.S. by market cap and revenue, and is even bigger than the nation’s largest banks. Given its size, UnitedHealth Group is considered a bellwether for the broader health insurance sector. Its market value was around $447 billion as of Friday’s close.
Here’s what UnitedHealth Group reported compared with Wall Street’s expectations, based on a survey of analysts by Refinitiv:

Earnings per share: $6.14 adjusted vs. $5.99 expected 
Revenue: $92.9 billion vs. $91.01 billion expected

UnitedHealth Group reported a net income of $5.47 billion, or $5.82 per share, for the quarter. That compares with $5.07 billion, or $5.34 per share, for the same period a year ago. Excluding certain items, the company’s adjusted earnings per share were $6.14 for the period. 
The company reported total revenue of $92.9 billion for the quarter, up 16% from the same period a year ago. That excludes $33.6 billion in “eliminations,” which are payments from the company’s UnitedHealthcare business to its other division, Optum. UnitedHealth Group can’t record those transactions as revenue because it is paying itself.

UnitedHealthcare, which provides insurance coverage and benefits services to more than 50 million people, saw second-quarter revenue grow 13% from a year ago to $70.2 billion. 
The company’s other platform, Optum, saw revenue increase nearly 25% from a year ago to $56.3 billion. Optum offers health services and runs one of the largest pharmacy benefit managers, or middlemen who negotiate drug discounts with drug manufacturers on behalf of health insurers and large employers.
Optum’s growth was helped in part by UnitedHealth Group’s roughly $8 billion acquisition of the health care technology company Change Healthcare.
It was also driven by a more than 900,000 year-over-year increase in the number of patients served by Optum’s health services business under value-based care arrangements.
UnitedHealth Group raised the low end of its full-year adjusted earnings outlook to $24.70 to $25.00 per share, from a previous forecast of $24.50 to $25.00 per share. 
The company’s medical cost ratio – the percentage of payout on claims compared with premiums – came in at 83.2%. Analysts had estimated that ratio would be 83.3% for the quarter, according to FactSet. 
The medical cost ratio is up almost 2% from the same period a year ago. UnitedHealth Care said that was driven by the previously noted uptick in elective surgeries and outpatient care activity, primarily among seniors. 
“To illustrate, in the second quarter, outpatient care activity among seniors was a few hundred basis points above our expectations,” UnitedHealth Group CFO John Rex said during an earnings call.
Rex noted that much of that care has come from seniors who are getting heart procedures and hip and knee replacements at outpatient clinics, reiterating his previous remarks at the Goldman Sachs health-care conference last month.
UnitedHealth Group expects its medical cost ratio to “be a little bit lower” in the third quarter compared with the second quarter, Rex said during the call.
He added that the company also expects the medical cost ratio in the third quarter to be “higher marginally” than it will be in the fourth quarter, noting that it’s “just a seasonality factor.”
But overall, the company expects the “general pacing of care activity to remain consistent,” according to Rex.
Insurance companies have benefited in recent years from a delay in nonurgent procedures due to hospital staffing shortages and the pandemic, which saw hospitals inundated with Covid patients. Hospitals at that time were widely seen as too risky to enter for elective procedures.
But UnitedHealth Group executives indicated that the trend may be reversing. More

The U.S. Food and Drug Administration disagrees with the World Health Organization’s classification of the soda sweetener aspartame as possibly carcinogenic to humans.
The FDA said the studies WHO experts relied on to make this conclusion had “significant shortcomings.”
FDA scientists have no safety concerns about aspartame when the sugar substitute is consumed within the daily recommended limit.

Cans of PepsiCo’s Pepsi Zero Sugar soda are displayed for an arranged photograph taken in Tiskilwa, Illinois, on Wednesday, April 17, 2019.
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The U.S. Food and Drug Administration disagrees with a World Health Organization finding that the widely used soda sweetener aspartame possibly causes cancer in humans, saying the studies used to reach that conclusion had “significant shortcomings.”
“Aspartame is one of the most studied food additives in the human food supply. FDA scientists do not have safety concerns when aspartame is used under the approved conditions,” an agency spokesperson said late Thursday shortly after the WHO released its findings.

The International Agency for Research on Cancer, a WHO body, found a possible link between aspartame and a type of liver cancer called hepatocellular carcinoma after reviewing three large human studies in the U.S. and Europe.
Aspartame is used as a substitute for sugar in about 6,000 products worldwide, according to the Calorie Control Council, a trade group that represents the manufacturers of artificial sweeteners.
Artificially sweetened beverages have historically been the biggest source of exposure to aspartame. The sugar substitute is used in diet sodas such as Diet Coke and Pepsi Zero Sugar.
Aspartame is widely used because it is 200 times sweeter than sugar, which means beverages containing the substitute taste similar to products with sugar, but have a lower calorie count.
Dr. Mary Schubauer-Berigan, a senior official at IARC, emphasized that the WHO classification of aspartame as a possible carcinogen is based on limited evidence.

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Schubauer-Berigan acknowledged during a news conference with journalists Wednesday that the studies could contain flaws that skewed the results. She said the classification should be viewed as a call to conduct more research into whether aspartame can cause cancer in humans.
“This shouldn’t really be taken as a direct statement that indicates that there is a known cancer hazard from consuming aspartame,” Schubauer-Berigan said.
The FDA spokesperson said the classification of aspartame as “possibly carcinogenic to humans” does not mean the sugar substitute is actually linked to cancer. Health Canada and the European Food Safety Authority have also concluded that aspartame is safe at the current permitted levels, the spokesperson said.
A separate body of international scientists called the Joint Expert Committee on Food Additives said Thursday that the evidence of an association between aspartame and cancer in humans is not convincing. JECFA is an international group made up of scientists from the WHO and the U.N. Food and Agriculture Organization.
JECFA makes recommendations about how much of a product people can safely consume. The organization maintained its recommendation that it is safe for a person to consume 40 milligrams of aspartame per kilogram of body weight daily during their lifetime.
An adult who weighs 70 kilograms, or 154 pounds, would have to drink more than nine to 14 cans of aspartame-containing soda daily to exceed the limit and potentially face health risks.
The U.S. Health and Human Services Department told the WHO in an August 2022 letter that JECFA is better suited to provide public health recommendations about the safety of aspartame in food.
This is because JECFA reviews all available data, both public and private proprietary information, whereas the IARC only looks at public data.
“Thus, an IARC review of aspartame, by comparison, would be incomplete and its conclusion could be confusing to consumers,” Mara Burr, who heads the HHS office of multilateral relations, wrote in the letter.
The FDA has a slightly higher recommendation than JECFA and says it is safe for a person to consume 50 milligrams of aspartame per kilogram of body weight daily during their lifetime. A person who weighs 132 pounds would have to consume 75 packets of aspartame per day to reach this limit. More

Eli Lilly will acquire Versanis, a privately held obesity drug maker, for up to $1.93 billion to expand its weight loss treatment portfolio. 
The deal is Eli Lilly’s latest attempt to capitalize on the weight loss industry gold rush, which began last year after Novo Nordisk’s blockbuster injections Wegovy and Ozempic boomed in popularity. 
Oakland, California-based Versanis has once drug candidate called bimagreumab, which binds directly to certain cells in the body to reduce fat mass.

Eli Lilly and Company, Pharmaceutical company headquarters in Alcobendas, Madrid, Spain.
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Eli Lilly on Friday said it will acquire Versanis, a privately held obesity drug maker, for up to $1.93 billion to boost the pharmaceutical giant’s weight loss treatment portfolio. 
Eli Lilly agreed to pay Versanis shareholders in cash, which will consist of an upfront payment and potentially subsequent payments if Versanis achieves certain “development and sales milestones.”

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Oakland, California-based Versanis, which was founded in 2021 by biotech investment firm Aditum Bio, has one experimental drug for obesity and potentially other conditions.
Eli Lilly’s stock price rose 3% on Friday following the announcement.
The deal is Eli Lilly’s latest attempt to capitalize on the weight loss industry gold rush, which began last year after Novo Nordisk’s blockbuster injections Wegovy and Ozempic boomed in popularity. 
An estimated 40% of U.S. adults are obese. Analysts project that the global weight loss drug market could be worth $100 billion by around 2030. 
Versanis’ drug, bimagrumab, binds directly to certain cells in the body to reduce fat mass.

The company is studying bimagrumab in a phase two trial in adults who are overweight or obese, and in another trial that compares the treatment with Novo Nordisk’s Wegovy and Ozempic.
Bimagrumab works differently from Novo Nordisk’s drugs and similar treatments from Indianapolis-based Eli Lilly. Those drugs, known as GLP-1 agonists, mimic hormones produced in the gut called incretins to suppress a person’s appetite.
But Versanis said combining bimagrumab with those incretin-based therapies could potentially lead to better outcomes for people living with obesity and cardiometabolic conditions, which includes diabetes, kidney disease and disorders affecting the heart. 

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Eli Lilly is working on several obesity treatments. 
The company’s once-weekly experimental injection, retatrutide, helped overweight or obese patients lose up to 24% of their weight after 48 weeks.
That surpasses the weight reduction caused by other obesity drugs.
Eli Lilly’s experimental obesity pill, orforglipron, also helped overweight or obese patients lose up to 14.7% of their body weight after 36 weeks.
The company is also pushing to approve its Type 2 diabetes treatment, Mounjaro, for obesity. 
Correction: Versanis’ drug, bimagrumab, binds directly to certain cells in the body to reduce fat mass. An earlier version misspelled the name of the drug. More