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PepsiCo beat second-quarter earnings and revenue estimates.
The beverage giant also raised its full-year outlook.
Higher prices hurt the company’s volume.
Shares climbed in premarket trading.

Pepsi products at a convenience store in Crockett, California, US, on Friday, June 16, 2023.
David Paul Morris | Bloomberg | Getty Images

PepsiCo on Thursday reported quarterly earnings and revenue that topped analysts’ expectations, despite falling demand for its drinks and food.
The beverage giant also raised its full-year outlook for the second consecutive quarter.

Shares of the company rose more than 2% 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: $2.09 adjusted vs. $1.96 expected
Revenue: $22.32 billion vs. $21.73 billion expected

For 2023, Pepsi now expects 10% organic revenue growth, up from its prior forecast of 8%. The company also hiked its core constant currency earnings outlook to 12% growth from its previous expectation of 9%.
Pepsi reported second-quarter net income attributable to the company of $2.75 billion, or $1.99 per share, up from $1.43 billion, or $1.03 per share, a year earlier.
Excluding items, the beverage giant earned $2.09 per share.

Net sales rose 10.4% to $22.32 billion. The company’s organic revenue, which strips out the impact of acquisitions and divestitures, rose 13% in the quarter.
But the company’s volume fell as higher prices for its snacks and drinks hurt demand. Volume, which excludes pricing and currency fluctuations, dropped 3% for Pepsi’s food divisions and 1% for its beverages.
PepsiCo CEO Ramon Laguarta said that consumers are looking for better deals and shopping more from dollar stores and club retailers.
“Every segment of the consumer is making adjustments,” he told analysts on the company’s conference call.
But executives also said that the company’s volume hasn’t fallen as much as expected, likely thanks to low global unemployment. Pepsi is planning to return to its usual pricing strategy the rest of the year.
Quaker Foods North America’s volume shrank 5% in the second quarter, and Pepsi’s North American beverage unit reported volume fell 4.5% during the period.
However, Frito-Lay North America was one bright spot, reporting 1% volume growth.
The company said brands like Doritos and Ruffles saw double-digit revenue growth. Pepsi has been introducing new packaging sizing, adding its “Flamin’ Hot” flavor to brands across the division and launching Frito-Lay Minis to keep its snacking sales high.
Pepsi’s spending on advertising and marketing across its portfolio rose by double digits during the quarter. More

Fanatics will launch Fanatics Events, a business that will look to recreate the Comic-Con experience for sports collectibles.
The new venture aims to start holding events next year.
Fanatics, which will own a majority stake in the business, is partnering with IMG.

Pavlo Gonchar | Lightrocket | Getty Images

Fanatics will launch a new live events business that will look to recreate the Comic-Con experience for sports collectibles, the company said Thursday.
The new venture, called Fanatics Events, will be a partnership with events and talent management giant IMG, which is part of Endeavor. Fanatics will be the majority owner.

Fanatics, which had been known primarily as an e-commerce platform, has sought to diversify its business as it moves toward an initial public offering. Last month, it held a second investor day in nearly a year with major firms such as Goldman Sachs and Barclays.
The company has agreed to buy PointsBet’s U.S. operations as it expands into sports betting. Initially, Fanatics offered $150 million, but it later raised its bid to $225 million, surpassing an offer of $195 million made by competitor DraftKings.
Fanatics Events plans to organize global events through partnerships and acquisitions. Fanatics said it will first prioritize the collectibles sector and explore opportunities to expand and innovate beyond that.
Fanatics said Fanatics Events aims to start holding events next year.
“The launch of our new Fanatics Events business provides an opportunity to celebrate all aspects of fandom — including sports, collectibles, memorabilia, fashion, music and entertainment — under one physical roof in a way that has never been done before,” said Lance Fensterman, CEO of Fanatics Events.

“These new touchpoints will reinforce our commitment to enhancing the overall experience for fans and collectors globally,” he added.
Fensterman recently left ReedPop, where he oversaw pop culture conventions over the years, including the massive annual New York Comic Con.
“Fanatics Events will be super-charged by the full power of Endeavor’s flywheel, global network, and events expertise to deliver once-in-a-lifetime moments that fans will remember forever,” said Paul Caine, president of On Location and IMG Events.
–CNBC’s Jessica Golden contributed to this report. More

Delta had record revenue and earnings for the second quarter.
Strong international travel demand and cheaper fuel boosted Delta’s bottom line.
Airlines make the bulk of their money in the second and third quarters.

Nurphoto | Nurphoto | Getty Images

Delta Air Lines posted its highest quarterly revenue and earnings ever thanks to scorching travel demand that has defied fears of an economic slowdown for months.
International travel and demand for premium seats like first class were standouts during the second quarter, while a 22% drop in Delta’s fuel costs boosted the carrier’s bottom line.

The Atlanta-based airline on Thursday hiked its 2023 earnings forecast to an adjusted $6 to $7 a share, up from its estimate last month at the high end of a $5 to $6 per share range. Delta’s stock was up more than 4% in premarket trading after the results.
CEO Ed Bastian said he expects consumers’ desire for travel will fuel bookings for years, calling the current period the “mid-innings” of travel growth.
“I think the trends that we’ve seen this year are going to continue,” he said in an interview.
Bastian said international demand remains robust into the fall and he expects a slow but steady increase in corporate travel bookings.
Delta is the first of the U.S. airlines to post second-quarter results, and its report sets an upbeat tone for the rest of the year. United Airlines and American Airlines are scheduled to report next week.

In the third quarter, Delta expects to earn $2.20 to $2.50 a share, above analysts’ expectations, on a 16% increase in capacity. The carrier forecast a jump in revenue of as much as 14% from a year earlier.
Here’s how Delta performed in the quarter ended June 30 compared with Wall Street expectations based on Refinitiv consensus estimates:

Adjusted earnings per share: $2.68 cents vs. $2.40 expected.
Adjusted Revenue: $14.61 billion vs. $14.49 billion expected.

Trans-Atlantic travel was particularly strong in the spring and early summer, with revenue from those trips up more than 60% from a year ago, compared with an 8% increase in domestic revenue and 21% rise in passenger revenue overall. Delta and its rivals have ramped up capacity to Europe this year in anticipation of the resurgence. (Bastian told CNBC he recently traveled to the south of France.)
Premium ticket revenue growth also outpaced that of main cabin economy.
Unit revenues, a measure of how much airlines are generating for every seat they fly a mile, rose 1% year over year, and a 17% rise in capacity.
“If you were to ask any quarter in which we grew capacity by high double digits and we held our overall pricing, that would be pretty amazing,” Bastian said.
Delta’s net income for the quarter was $1.83 billion, or $2.84 a share, up from $735 million, or $1.15 a share, a year ago. Adjusting for certain items, per-share earnings were $2.68, up from $1.44 in the same period last year.
The airline’s net income was the highest since the fourth quarter of 2013, when the airline put more than $8 billion in tax-loss credits back on its balance sheet.
Delta brought in $14.61 billion in revenue, adjusted to strip out sales from its refinery, in the three months ended June 30, up 19% from a year ago, and above analysts estimates. Total revenue of $15.58 billion was up 13% from a year earlier. More

Airfare dropped more than 8% last month from May, the biggest drop in nearly a year.
A plunge in fuel prices is helping boost airlines’ bottom lines.
Delta reported record quarterly earnings on Thursday.

Passengers at Reagan National Airport in Arlington, Virginia on May 26, 2023.
Andrew Caballero-Reynolds | AFP | Getty Images

Flights are getting cheaper as airlines ramp up service during what’s shaping up to be a busy summer.
U.S. inflation data this week showed airfares dropped 8.1% in June from a month earlier, the biggest decline in nearly a year and the second biggest since April 2020, when the pandemic suddenly sapped demand for air travel.

Airlines are enjoying cheaper fuel and a lasting boom in travel. Daily airport screenings by the Transportation Security Administration have recently surpassed 2019 levels, before the pandemic.
Delta Air Lines on Thursday reported record earnings for the second quarter, estimated more record revenue through the start of fall and hiked its full-year forecast.
Delta’s revenue per available seat mile, which measures how much airlines are generating for every seat they fly one mile, rose 1% in the last quarter from a year ago with capacity up 17%. It’s a sign that fares and revenue are holding up despite added service.
International fares appear to be doing better as customers opt for trips abroad, a shift from previous years when travelers favored domestic destinations during pandemic travel restrictions.
Delta’s domestic revenue unit revenues fell 1% in the quarter from the same period of 2019, but trans-Atlantic unit revenues rose 22% and the smaller trans-Pacific segment rose 29% and Latin American service unit revenues were up 16%.

Airlines have been especially aggressive in adding record amounts of service to Europe this summer and higher unit revenues are showing that fares there continue to hold up.
United Airlines and American Airlines will provide their outlooks on demand next week when they’re scheduled to report results. More

Disney is extending CEO Bob Iger’s contract through 2026.
Since he replaced Bob Chapek in November, Iger has undertaken a broad restructuring of the company, including thousands of layoffs.
CNBC’s David Faber will interview Iger on CNBC’s “Squawk Box” at 8 a.m. ET on Thursday.

Disney CEO Bob Iger arrives for the 92nd Oscars at the Dolby Theatre in Hollywood, California, Feb. 9, 2020.
Robyn Beck | AFP | Getty Images

The Walt Disney Company will extend CEO Bob Iger’s deal by two years, extending his tenure through 2026.
Shares of the company were effectively flat after the news.

Iger told CNBC in February that he had no intention to stay longer than two years in his post, which would have taken him through 2024. Iger returned to Disney in November, retaking the job from Bob Chapek, who was appointed CEO in early 2020. Iger planned to prepare his next successor during his new stint as CEO.
The succession process remains a key issue for Iger, who noted in a statement Wednesday that the board of directors of the company continues to evaluate candidates for the post. “I want to ensure Disney is strongly positioned when my successor takes the helm,” Iger said of extending his contract. “The importance of the succession process cannot be overstated.”
Iger has delayed succession decisions before, however. On four different occasions between 2013 and 2017, he extended his tenure as CEO after saying he planned to retire.
Iger’s second tenure at Disney has coincided with upheaval in the legacy media space. Big players such as Disney have had to contend with a rapidly shifting landscape, as ad dollars dry up and consumers increasingly cut off their cable subscriptions in favor of streaming.

Tune in: CNBC’s David Faber will interview Disney CEO Bob Iger on CNBC’s “Squawk Box” at 8 a.m. ET on Thursday.

Yet, the streaming space has been difficult to navigate in recent quarters, as expenses have swelled and consumers become more conscious about their media spending. The slowdown in streaming subscribers cut valuations for Netflix, Disney, Warner Bros. Discovery and Paramount Global roughly in half in 2022, before several of the stocks rebounded in the first half of this year along with the broader market.

Since he returned, Iger has undertaken a broad restructuring of the company, including 7,000 layoffs.
“We’ve made important and sometimes difficult decisions to address some existing structural and efficiency issues, and I’m proud of what we’ve been able to achieve together,” Iger wrote in a memo to employees that was obtained by CNBC on Wednesday. “But there is more to accomplish before this transformative work is complete, and I am committed to seeing this through.”
Disney has been pulling programming from its streaming services to save money. The company is also trying to pull its animation business out of a major rut, as its latest Pixar movie, “Elemental,” recorded the lowest opening weekend gross for the studio since the original “Toy Story” premiered in 1995.
When Disney recently finished laying off 7,000 employees, it saw the departure of veteran Chief Financial Officer Christine McCarthy.
“Bob has once again set Disney on the right strategic path for ongoing value creation, and to ensure the successful completion of this transformation while also allowing ample time to position a new CEO for long-term success, the board determined it is in the best interest of shareholders to extend his tenure, and he has agreed to our request to remain Chief Executive Officer through the end of 2026,” said Mark Parker, Disney’s chairman.
CNBC’s David Faber will interview Iger on CNBC’s “Squawk Box” at 8 a.m. ET on Thursday.
Read Iger’s full memo to Disney employees:
Dear Fellow Employees,
I want to thank you for your tremendous dedication, patience, and optimism as we’ve taken important steps to reposition the company for enduring creative and financial success. Since my return to Disney just seven months ago, I’ve examined virtually every facet of our businesses to fully understand the tremendous opportunities before us, as well as the challenges we face on numerous fronts.
We’ve made important and sometimes difficult decisions to address some existing structural and efficiency issues, and I’m proud of what we’ve been able to achieve together. But there is more to accomplish before this transformative work is complete, and I am committed to seeing this through.
To that end, I’m writing to share that I have agreed to the Disney Board’s request to remain CEO for an additional two years – through the end of 2026.
As I’ve said many times since we began this important transformation of the company, our progress will not be linear as we continue navigating a difficult economic environment and the tectonic shifts occurring in our industry. This is a moment that requires us to remain steadfast, strategic, and clear-eyed about the road ahead.
It is also important to me that Disney is strongly positioned when my successor takes the helm. As the Board continues to evaluate a highly qualified slate of internal and external candidates, I remain intensely focused on a successful CEO transition.
Through it all, I am unwaveringly optimistic about Disney’s future. I believe in this company. I believe in the leadership team I have around me. And I believe in you – our spectacular employees and Cast Members. It’s an honor to work alongside you as we chart Disney’s path forward together, and I look forward to all that we will continue to achieve over the coming years.
Thank you for all you do,Bob
— CNBC’s Alex Sherman, Kerry Caufield and David Faber contributed to this report. More

Viasat disclosed its recently launched Viasat-3 Americas satellite communications satellite suffered a malfunction while deploying its reflector.
“We’re disappointed by the recent developments,” Viasat CEO Mark Dankberg said in a statement, adding that the company is attempting to resolve the problem.
Viasat did not disclose the identity of the reflector’s manufacturer, but its design appears to match products offered by Northrop Grumman.

A long-exposure photo shows a trail left by SpaceX’s Falcon Heavy rocket while launching the ViaSat-3 Americas satellite from Florida on April 30, 2023.

Viasat’s stock dropped in after-hours trading on Wednesday after the company disclosed its most recently launched communications satellite suffered a malfunction.
The Carlsbad, California-based company said an “unexpected event occurred” while deploying the reflector of its Viasat-3 Americas satellite “that may materially impact” performance. The satellite launched successfully in April on SpaceX’s Falcon Heavy rocket.

“We’re disappointed by the recent developments,” Viasat CEO Mark Dankberg said in a statement.
Shares of Viasat fell as much as 21% in extended trading from its previous close at $42.98 a share.

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Viasat did not disclose the identity of the reflector’s manufacturer in its release. Dankberg said his company is “working closely” with the manufacturer to resolve the problem. A Viasat spokesperson confirmed to CNBC that the manufacturer is a top aerospace and defense company – but noted that it is not Boeing, which built the 702MP+ bus that is the spacecraft’s structure and power.
The design of the reflector on the Viasat-3 Americas satellite appear to match the “AstroMesh” line of reflectors that Northrop Grumman advertises. Additionally, Viasat has said the “long boom arm” that supports the reflector is a “direct derivative” of the telescoping booms that Northrop Grumman built for NASA’s James Webb Space Telescope.
Viasat has previously thanked both Boeing and Northrop Grumman as part of its combined team behind the Viasat-3 Americas satellite.

Northrop Grumman did not immediately respond to CNBC’s request for comment.

An artist’s rendering of the ViaSat-3 Americas satellite in orbit above Earth.

Viasat emphasized that “there is no disruption” for existing customers due to the incident, with the company having 12 other satellites in service.
The Viasat-3 Americas satellite is the first of a trio of satellites the company has long expected to bolster its broadband business. In a press release Wednesday, Viasat noted it may potentially reallocate one of its upcoming two ViaSat-3 satellites, which are set to serve EMEA (Europe, the Middle East, and Africa) and APAC (Asia-Pacific), to replace the malfunctioning satellite that was launched to serve North and South America.
Industry publication SpaceIntelReport noted that, if the satellite is lost, Viasat may trigger a $420 million claim. A space insurance underwriter described the situation to CNBC as a “market changing event” for the sector. More

China is requiring foreign companies to host groups that monitor their compliance with Chinese Communist Party views, FBI Director Christopher Wray said.
The Chinese government has “exploited” joint business ventures in search of companies’ secrets and information, Wray told the House Judiciary Committee.
Wray previously expressed concerns about the CCP cells in an interview with CNBC’s Eamon Javers.

FBI Director Christopher Wray testifies before the House Judiciary Committee during a hearing on “Oversight of the Federal Bureau of Investigation,” on Capitol Hill in Washington, DC, on July 12, 2023. (Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images)
Saul Loeb | Afp | Getty Images

China is requiring U.S. and other foreign-owned companies to host groups that monitor their compliance with Chinese Communist Party orthodoxy, FBI Director Christopher Wray said in congressional testimony Wednesday.
It’s one way in which the Chinese government has “exploited” joint business ventures in order to obtain companies’ secrets and information, Wray told the House Judiciary Committee.

“There is no country, none, that presents a broader, more comprehensive threat to our ideas our innovation our economic security than the Chinese government and the Chinese Communist Party,” Wray testified.
“In many ways, it represents, I think, the defining threat of our era,” he said.
Wray’s blunt criticism against China’s alleged government intrusion into foreign business, in a venue where his language has otherwise been highly guarded, underscores the high tension between Beijing and Washington. His remarks also come on the heels of high-stakes visits to China by Secretary of State Antony Blinken and Treasury Secretary Janet Yellen.
Wray on Wednesday had been asked by Rep. Lance Gooden, R-Texas, about whether China is “in essence nationalizing American enterprises” by forcing companies doing business in the country to allow the CCP to operate internal “political cells.”
“The CEOs I’ve talked to are afraid to say something, they say they’ve come to the FBI,” Gooden said.

Wray called it “a very important issue” that deserves more attention.
“While there’s no law against joint ventures, The problem that we have is that the Chinese government all too often has exploited those joint ventures to then use them as ways to get improper access to companies secrets, and information,” the FBI director said.
Wray said that Americans “would be shocked to hear” that virtually all companies doing business in China are required to allow those cells.
“If we try to install something like that in American companies, or if the British tried to do it in British companies or any number of other places, people would go out of their minds, and rightly so,” he said.
Wray did not name specific companies who have been required to house CCP cells in China. He also did not directly respond to Gooden’s concern that Beijing had ramped up its use of those cells.
The U.S. Chamber of Commerce and the CEO advocacy group Business Roundtable, whose members include the leaders of major companies such as Apple and Nike, did not immediately respond to CNBC’s requests for comment on Wray’s remarks.
Commercial risk intelligence platform Sayari warned in a 2021 report that private companies in China face growing pressure to give the so-called CCP cells more influence.
Those companies have been required since 2018 to establish CCP cells in order to be listed on domestic stock exchanges, according to Sayari. The cells, in turn, have pushed to strengthen their role in corporate governance, the company said.
The Wall Street Journal reported last year that Chinese regulators had changed their rules for securities investments funds, including requiring foreign-owned firms such as BlackRock and Fidelity to create communist cells within their Chinese business operations.
The Financial Times previously reported that HSBC had installed a CCP committee in its banking business in China, making it the first foreign lender to do so. 
It’s not the first time Wray has raised concerns about Beijing’s alleged efforts to enforce communist political views within foreign companies operating in China.
“It’s even to the point where, under Chinese law, Chinese companies of any size are required to host inside the company,” Wray said in an interview with CNBC. “They call it a committee, but it’s essentially a cell whose sole responsibility is to ensure that company’s adherence to the Chinese Communist Party’s orthodoxy.”
“And it doesn’t just apply to Chinese companies; it applies to foreign companies if they get to a certain size in China, as well,” Wray told CNBC.
Those companies “have to comply,” he added. “They have to cooperate.”
The exchange with Gooden came as a respite to the mostly hostile questions Wray received from committee’s Republican majority. The Biden administration official fielded heated questions and frequent interruptions from Republicans largely centered on the agency’s perceived political bias against conservatives.
— CNBC’s Christina Wilkie contributed to this report. More

Chipmaker Nvidia will invest $50 million in Recursion Pharmaceuticals to speed up the development of the biotech firm’s artificial intelligence models for drug discovery.
Salt Lake City, Utah-based Recursion will use its biological and chemical datasets exceeding 23,000 terabytes to train its AI models on Nvidia’s cloud platform. 
The investment in Recursion only deepens Nvidia’s bet in AI.

A man wearing a mask walks past a Nvidia logo in Taipei, Taiwan.
Sopa Images | Lightrocket | Getty Images

Chipmaker Nvidia will invest $50 million in Recursion Pharmaceuticals to speed up the development of the biotech firm’s artificial intelligence models for drug discovery, the companies said Wednesday. 
Recursion’s stock soared 80% following the announcement. Shares of Nvidia, which have helped fuel stock market gains this year amid hopes about its AI computing chips, rose more than 2%. 

Recursion uses AI-powered models to identify and design new therapies, and offers those models to other drugmakers, including Roche and Bayer.
Salt Lake City, Utah-based Recursion will use its biological and chemical datasets exceeding 23,000 terabytes to train its AI models on Nvidia’s cloud platform. Those datasets grow by “hundreds of terabytes every week,” Recursion CEO Chris Gibson said on CNBC’s “Closing Bell Overtime.”
AI models usually require vast amounts of data, typically measured in terabytes, to train them.
Nvidia can then potentially license those AI models on BioNeMo, the company’s cloud service for generative AI in drug discovery that it rolled out earlier this year. 
Recursion expects to use BioNeMo to support its internal drug pipeline and those of its current and future partners. Gibson said Recursion is conducting human trials for five of its drugs, some of which will have data readouts next year.

That includes a drug that aims to treat a neurovascular disease caused by the brain’s malformation of small blood vessels, and a treatment for a certain type of ovarian cancer.
“I think we’re focused on the long term and at Recursion, we believe that by leveraging technology, automation, the newest tools in biology and chemistry — we have an opportunity to speed up the pace and speed of drug discovery in the coming years,” Gibson told CNBC.
“We’ve had a lot of positive proof points in the last couple of years and I think we’re well positioned to hopefully show a lot of positive catalysts in the coming years as well,” he continued.
Nvidia’s investment is the latest example of the AI frenzy making its way into the pharmaceutical industry. Drugmakers are increasingly recognizing AI’s potential to get life-saving treatments to people faster. 
Moderna said in April that it will harness the power of AI to advance the company’s messenger RNA technology, which is used in Covid vaccines. A month later, Google Cloud launched two new AI-powered tools that aim to help biotech and pharmaceutical companies accelerate drug discovery.
Nvidia, which produces chips used to power AI, is seen as a big winner in the AI boom.
The company reached a trillion-dollar market value for the first time in June, part of the more than 200% increase in the stock’s price since the beginning of this year on the back of heavy demand for AI.
The investment in Recursion only deepens Nvidia’s bet in the popular technology. 
The announcement also comes as Recursion strengthens its focus on AI. The company in May acquired two companies in the AI-driven drug discovery space for $87.5 million. 
Other AI-driven drugmakers also traded higher Wednesday following the announcement. Exscientia soared as much as 12%, while AbCellera Biologics jumped more than 13%.
— CNBC’s Benjamin Taubman contributed to this report. More