Business

Ford Motor’s February sales increased by more than 20% from subdued results a year earlier.
The Detroit automaker Thursday reported February sales of 157,606 vehicles, a 7.7% increase from January.
Sales of Ford’s F-Series pickups increased 22% last month compared with a year earlier, including a spike in sales of its electric F-150 Lightning.

Ford Motor Co., CEO Jim Farley gives the thumbs up sign before announcing Ford Motor will partner with Chinese-based, Amperex Technology, to build an all-electric vehicle battery plant in Marshall, Michigan, during a press conference in Romulus, Michigan February 13, 2023.
Rebecca Cook | Reuters

DETROIT — Ford Motor’s February sales increased by more than 20% from subdued results a year earlier, as the automaker ratchets up production of its F-Series pickups and electric vehicles.
The Detroit automaker Thursday reported February sales of 157,606 vehicles, up 22% from a year earlier and a 7.7% increase from January. Ford’s sales were hampered by supply chain problems in February 2022, making for one of its worst months since 2021.

Sales of Ford’s F-Series pickups jumped 22% last month compared with a year earlier, increasing to about 55,000 units, including 1,336 units of its electric F-150 Lightning. So far this year, sales of F-Series pickups are up 15%.
Ford’s electric vehicle sales — a major focus of Wall Street — continue to increase, up 88% from a year earlier. However, EV sales still only represent 2.9% of the automaker’s sales through February.
The automaker sold 3,600 electric F-150 Lightning vehicles through February. However, sales were off 41% compared with January as the automaker halted production and shipments of the vehicle last month due to a battery fire.
Wall Street analysts estimate U.S. auto sales last month were better than expected, reaching a seasonally adjusted selling rate of about 15 million units. BofA Securities estimated sales were up by 8.5% last month compared with February 2022.
Ford’s February sales outpaced other automakers who reported monthly sales. Toyota Motor’s sales last month were down by 8.5% compared with a year earlier, while Hyundai-Kia’s sales increased by 16.2%. Many automakers have moved to quarterly sales reporting instead of monthly.

The automotive industry continues to navigate through some supply chain and production issues,  although the flow of parts and vehicle production this year is expected to be more consistent than in recent years.
“We are optimistic regarding our performance this year,” Hyundai Motor North America CEO Randy Parker told CNBC on Wednesday. “We do anticipate that interest rates will continue to climb for the balance of the year, and hopefully that doesn’t tip us into a recession.”
— CNBC’s Michael Bloom contributed to this report.

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Hype and absurdity go together. As excitement about the next big thing builds, people fall over themselves to get on board. A year and a half ago, the metaverse was the future. Companies appointed chief metaverse officers, and futurologists burbled about web 3.0. The idea has not gone away. Colombia held its first court case in the metaverse last month (imagine a video game called Wii Justice and you get the picture). But the excitement has evaporated, at least for now. Microsoft disbanded its industrial metaverse team last month; the career prospects of chief metaverse officers are more virtual than even they would like.Listen to this story. Enjoy more audio and podcasts on More

StartupS in India, as elsewhere, are in trouble. Venture-capital (VC) investments in January were down by 80%, year on year, according to Inc42, an online publication. Many of the reasons are familiar, too: money is no longer free; local banks pay more on deposits; once-hot business models like food delivery or online learning have not lived up to expectations; and crashing valuations are undermining the credibility of the market. Now Indian firms face another, idiosyncratic hurdle. Listen to this story. Enjoy more audio and podcasts on More

Sixteen million U.S. households have been relying on federal broadband subsidies to keep internet access within their budgets.
The current subsidy is expected to run out of funding next year, and unless it is renewed by Congress all of the enrolled households could lose affordable broadband.
February marked the two-year anniversary of the debut of the Emergency Broadband Benefit, the first of the two pandemic-era broadband subsidies.

Trumzz | Istock | Getty Images

Over the past two years, millions of low-income U.S. households have received broadband internet at a discount through two consecutive government programs.
But they could soon lose that benefit. More than 16 million U.S. households are currently enrolled in the federal government’s Affordable Connectivity Program, or ACP, which offers a $30 discount on broadband services to qualifying low-income households. Funding for it is expected to run out next year.

“In 2024, or when the money runs out, the program could be completely obliterated,” said Nicol Turner Lee, director of the Center for Technology Innovation at the Brookings Institution. “Millions could be left in the dark without broadband service for the very same reasons they didn’t have it in the first place.” 
The Emergency Broadband Benefit, or EBB, which was approved by then-President Donald Trump in late 2020 and launched in February 2021, provided a $50 subsidy. About 9 million households enrolled. In December 2021, under President Joe Biden, the ACP replaced the Trump-era program.
The program has signed up one-third of eligible households. That’s considered an accomplishment, said Ken Garnett, chief strategy officer at Cal.net, a small internet service provider that serves rural inland areas of California.
To be eligible, a household must have an income of no more than 200% of federal poverty guidelines, or a person must receive other government assistance, such as a Pell Grant or food stamps.
The Biden administration pushed for expanding broadband accessibility as part of its infrastructure bill, recognizing Americans’ reliance on home networks, especially earlier in the pandemic, as well as the digital divide that exists in both urban and rural areas.

At-home broadband usage skyrocketed during the earlier days of the pandemic, according to Open Vault, which tracks monthly cable broadband usage. It remains elevated compared with pre-pandemic levels as Americans return to work on a hybrid schedule.
The infrastructure law allocated $14.2 billion, along with the remaining funds that rolled over from the EBB to the ACP. As of January, about $6.1 billion of the funds had been claimed by broadband service providers as reimbursement for discounting their services and products. Analysts and industry insiders predict that at the existing pace of customer uptake, which some estimate is around 100,000 to 200,000 households a week, the rest of the money will dry up in 2024. 
Polling shared with CNBC by the Digital Progress Institute, a bipartisan policy research firm, found that voters on both sides of the aisle are largely in support of the continuation of the ACP.  Of the 1,000 voters surveyed in January, 64% of Republicans supported it, along with 95% of Democrats and 70% of independents. 
It is up to Congress to decide whether the program gets funded again. One of the deciding factors will be the efficacy of the programs over the past two years.

What’s working, what’s not

Terry Dean, a 67-year-old retiree in the Southeastern U.S., said the programs have made affording broadband on a fixed income more feasible.
“I could have afforded the $50, but I am on a fixed budget like a lot of older people. This helps,” Dean said. He switched to a Spectrum plan for $29.99 a month, which is fully covered with the ACP.
Keaton Bishop-Marx, a 27-year-old software developer in North Carolina, started using the ACP benefit in 2022. He said that though he could manage his broadband bills, the cost was getting to be a bit “excessive,” especially as the price crept up over the years. “I’m a citizen of the internet very much, so it might as well be a gas bill for me, and it’s helpful to pay less,” Bishop-Marx said.
Still, two-thirds of the eligible population remains unenrolled.
For some, the process of signing up, which requires submitting private information online, by mail or on the phone with an internet service provider, feels too cumbersome or invasive.
“A lot of the low-income folks from rural areas have significant reluctance to provide personal information to government agencies, which is one of the requirements of qualifying,” said Garnett, of Cal.net. 
It’s also likely that many eligible consumers don’t know about the ACP.
Dean said he discovered both the EBB and ACP by keeping up with the news and called the providers to receive the benefits, while Bishop-Marx was alerted by an email notification from the state.
Even though the ACP is a public program aimed at consumers, private internet companies stand to benefit by investing advertising dollars to promote it and attract new members.
Cox Communications spent $25 million last year on awareness campaigns and partnering with local organizations to help educate customers about the ACP, according to Ilene Albert, who leads the company’s digital equity and affordability division. Some do not realize they are eligible, said Albert, since more people qualify for the ACP than the EBB.
In a 2021 earnings call, Charter Communications’ now-CEO Chris Winfrey, who was CFO at the time, said there were “a lot of people who had been on wireless substitution in the past or had affordability issues …. [T]hrough the things that we did cooperating with the federal government, we were able to get them to proper broadband. And we benefited from that last year.”
Comcast has partnered with thousands of “digital navigators,” community-based organizations that walk customers through their broadband options, to expand digital literacy in underserved areas. 

What happens without ACP

Although ACP has made headway in making broadband more affordable, it remains unknown whether Congress will renew it when funding runs out, especially since 2024 is an election year and Congress currently has a partisan split.
Some aren’t worried.
“I’ve unfortunately been alive long enough to know that once the government starts paying for something they usually end up paying for it forever,” Dean said. “In the scheme of things, the ACP program is a drop in the bucket. I’m sure there are senators and house representatives that will fight for it when the money is close to running out.”
Others are less confident. 
“There are companies that will make investment decisions on the basis that ACP will be around forever, which really makes me nervous,” said Alan Fitzpatrick, CEO of Open Broadband, a small North Carolina-based internet service provider. “I’m not going to bank on it.”
Fitzpatrick said that only about 1% of Open Broadband’s customer base is enrolled in ACP. 
Prior to the subsidy, many providers offered cheaper plans for low-income customers. Comcast, Cox and Charter all tout a decade of investment into initiatives to expand broadband access, suggesting that their efforts are not dependent on whether the ACP continues.  
For example, providers are often competing for funding from the Broadband, Equity, Access and Deployment, or BEAD, program and other grants that sponsor the development of broadband coverage in underserved, often rural, areas. BEAD is funded and run by the Department of Commerce and the National Telecommunications and Information Administration. 
Still, many consumers are more reliant than ever on ACP as inflation has squeezed their wallets.
A Charter executive said in early 2022 that while customers were already dealing with higher prices for groceries and other essential items, government subsidies were part of why the company believed it was still well positioned.
If the ACP disappears, eligible consumers will still have access to the FCC’s Lifeline Support program. The program provides a $9.25 discount for broadband services, which is popular for mobile users.
But without the ACP, customers may miss monthly bills, trade down to lower price tiers or cut their monthly service altogether.
“What we’ve done, at least, has impacted a percentage of people, even if it’s small, who could not make the decision between whether they were going to eat that night or have their child online for education,” said Turner Lee, of Brookings. “I don’t think we’re going to see the full benefit until the next two or three years.”
Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.

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Macy’s reported a bigger profit than expected during the holiday quarter.
The department store operator said it is planning for a choppier year ahead.

People wait in line to enter Macy’s department store during Black Friday in New York City on November 25, 2022.
Yuki Iwamura | AFP | Getty Images

Macy’s shares jumped Thursday, as the company said it drew holiday shoppers looking for gifts and held the line on promotions.
But the department store operator, which includes higher-end banner Bloomingdale’s and beauty chain Bluemercury, said it is still planning for a choppier year ahead.

Macy’s said it expects net sales to decline in a range of 1% to 3% in the fiscal year compared with 2022, which would translate to between $23.7 billion to $24.2 billion. It said it expects its adjusted diluted earnings per share will range from $3.67 to $4.11.
In the holiday quarter, CEO Jeff Gennette said the company was “competitive but measured in our promotions, took strategic markdowns and intentionally did not chase unprofitable sales.”
He said Macy’s is focused on refreshing its private brands, opening more off-mall stores and growing its luxury business and online marketplace.
Here’s how Macy’s did for its three-month period that ended Jan. 28 compared with what analysts were anticipating, based on Refinitiv estimates:

Earnings per share: $1.71 vs. $1.57 expected
Revenue: $8.26 expected vs. $8.26 billion expected

Net income for the fourth quarter fell to $508 million, or $1.83 per share, from $742 million, or $2.44 a share, a year earlier. The company reported adjusted per share earnings of $1.88. Excluding a tax benefit in the quarter, adjusted earnings per share come out to $1.71. 

Comparable sales on an owned-plus-licensed basis were down 2.7% during the period from a year ago, but up 3.3% versus the fourth quarter in 2019.
The company reported adjusted earnings per share of $1.88. Excluding a tax benefit, it delivered adjusted earnings per share of $1.71, higher than the $1.57 that analysts expected, according to Refinitiv.
Macy’s results signal that sales patterns picked up in the final weeks of the quarter. In early January, the company had shared early holiday numbers. At the time, it said it expected its sales to come in on the lighter side of expectations. The company said it had noticed customers watching their spending more carefully and buying fewer items for themselves while shopping for gifts in November and December.
Macy’s has stood out from other retailers in another way: It hasn’t coped with the same glut of unsold goods. At the end of the fourth quarter, its inventory was down about 3% versus a year ago and down about 18% compared with 2019.
That meant the retailer had less merchandise to sell at a deep discount, even as it had to compete with retailers running lots of sales.
Bloomingdale’s and Bluemercury have been the strongest parts of the company’s business. Bloomingdale’s comparable sales rose 0.6% year over year on an owned-plus-licensed basis, as shoppers bought dressy clothing and beauty merchandise. Bluemercury’s comparable sales rose 7.2% on an owned basis, as shoppers sought newer and more colorful makeup along with skincare merchandise.
At Macy’s stores and on its website, the company said it noticed “the impacts of macroeconomic pressures” in the fiscal fourth quarter. Yet it said it saw strength in sales for gift-giving and occasion-based items like men’s tailored apparel, dresses and beauty merchandise. Sales of activewear, casual clothing and soft home goods declined versus the prior year.
As of Wednesday’s close, Macy’s shares are down about 1% so far this year. Its stock trails the S&P 500, which rose by about 3% during the same period. The company’s shares closed at $20.43 on Wednesday, bringing Macy’s market cap to about $5.5 billion.
Read the full Macy’s earnings release.
This story is developing. Please check back for updates.

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Best Buy on Thursday reported holiday-quarter earnings and revenue that topped Wall Street’s expectations.
Still, the retailer warned of declining sales in the coming year.
Best Buy was a big beneficiary of sales trends during the Covid pandemic, which has teed up challenging comparisons.

Customers shop at a Best Buy store on August 24, 2021 in Chicago, Illinois.
Scott Olson | Getty Images

Best Buy on Thursday reported holiday-quarter earnings and revenue that topped Wall Street’s expectations, as waning demand for consumer electronics proved better than feared.
Still, shares were down about 2% in premarket trading as the retailer warned of declining sales in the coming year.

For the coming fiscal year, the consumer electronics retailer said it expects revenue between $43.8 billion and $45.2 billion, a decline from its most recent fiscal year, and a same-store sales decline of between 3% and 6%.
Here’s how the company did for the quarter ended Jan. 28 compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

Earnings per share: $2.61 vs. $2.11 expected
Revenue: $14.74 billion vs. $14.72 billion expected

Best Buy was a big beneficiary of sales trends during the Covid pandemic, as consumers bought computer monitors to work remotely, home theaters to pass the time and kitchen appliances as they cooked more. Its quarterly sales were down about 3% from the same period before the pandemic when it reported $15.2 billion in revenue.
Its pandemic-era momentum has teed up challenging comparisons for the consumer electronics retailer, particularly as shoppers feel strained by bigger grocery bills and other higher expenses fueled by inflation. Best Buy also sells a lot of big-ticket items, such as laptops and smartphones, purchases that a customer may not make as frequently or ones that they may postpone if stretched by other spending priorities.
Same-store sales decreased by 9.3% during the fourth quarter, slightly higher than analysts’ expectations of 9.2%, according to StreetAccount. For the full year, same-store sales were down 9.9%, in line with guidance the retailer issued in November that same-store sales would decline about 10%. The key metric, also called comparable sales, tracks sales online and at stores open at least 14 months.

Best Buy had joined other retailers in cutting its outlook this summer. It also cut an undisclosed number of jobs across the country this summer.
In the fiscal fourth quarter, Best Buy’s net income fell by 21% to $495 million, or $2.23 per share, from $626 million, or $2.62 per share, a year earlier.
As of Wednesday’s close, Best Buy’s shares have risen nearly 3% so far this year, in line with the performance of the S&P 500 during the same period. Its shares closed at $82.54 on Wednesday, bringing its market value to $18.26 billion.
This story is developing. Please check back for updates.

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Swedish electric vehicle maker Polestar cut its annual losses in half last year, while revenue surged.
The company exceeded a 50,000-vehicle delivery target and expects to increase deliveries by nearly 60% to approximately 80,000 cars in 2023.
Polestar’s relatively positive results come after other EV startups like Lucid, Nikola and Rivian reported ongoing problems with supply chains and production.

Polestar 3
Courtesy: Polestar

Swedish electric vehicle maker Polestar cut its annual net losses in half last year, while revenue surged and it attempted to set itself apart from other EV startups.
The company on Thursday reported an 84% increase in revenue for 2022 to roughly $2.5 billion as it exceeded a 50,000-vehicle delivery target. Its net loss for the year fell to $466 million from more than $1 billion in 2021. Its adjusted operating loss narrowed by 8% to $914 million, while its adjusted earnings before interest and taxes, depreciation and amortization increased 4.8% to $759 million.

Shares of the company were up 7% in premarket trading after the release.
CEO Thomas Ingenlath described the company’s 2022 performance as the groundwork for a “different phase” in the automaker’s growth as it aims to increase deliveries by nearly 60% to approximately 80,000 cars.
The majority of that increase will come from an updated Polestar 2 EV, according to Ingenlath. The company is releasing two new EVs this year – Polestar 3 and Polestar 4 – that are expected to hit their production strides in 2024.
“It’s an exciting year for us in terms of changing the company to not only having one product but three at the end of the time,” Ingenlath told CNBC during a video interview.
For 2023, Polestar expects gross margin be “broadly in line” with the 4.9% it reported for 2022, “with volume and product mix supporting margin progression later in the year.”

The company improved its cash position to $973.9 million to end last year, up about 29% from a year earlier. CFO Johan Malmqvist said the company continues to explore potential equity or debt offerings to raise additional capital to fund operations and business growth.
Malmqvist declined to comment on when the company expects to breakeven or turn a profit, saying “We remain confident in the fundamentals of our business, so we have the levers and the building blocks to get to breakeven.”
Polestar’s relatively positive results come after other EV startups like Lucid, Nikola and Rivian reported ongoing problems with supply chains and production, causing them to miss production or sales targets.
Polestar is a joint venture between Sweden’s Volvo Cars and its parent company, China-based Geely. Polestar went public via a merger with a special purpose acquisition company in June.
Since going public, shares of Polestar are off about 49%. The stock fell more than 5% Wednesday, closing at $5.05 a share.

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Paul Ingram, who manages a ranch in rural Texas, is not the type you would normally associate with a weight-loss fad. But a year ago he finally got fed up with lugging his 320lb (145kg) frame around all day in the heat. His family has a history of heart disease. As a result of covid-19, he had become painfully aware of the risks of obesity. His efforts to lose weight through diet and exercise had gone nowhere. “I needed some help.” So his doctor, a family friend, suggested he use an injectable drug from Novo Nordisk, a Danish drugmaker, that is approved for type-2 diabetes but, as a fringe benefit, helps with weight loss, too. To start off, the price, at about $1,000 a month, was out of Mr Ingram’s reach. Because he didn’t suffer from diabetes, his insurer wouldn’t cover it. Then he discovered an online Canadian pharmacy that shipped it to him for $350 a month. Since using it, he has shed 60lb. When he goes to the gym and picks up two 30lb barbells, he thinks, “I used to carry this much more weight around on me all day long.” It’s life-changing, he reckons—he eats less, exercises more and his doctor is “tickled to death”. “It blows me away that insurers don’t want to pay for it.” The drug he uses, Ozempic, is now a meme. But it is about more than just “skinny pen” jabs for starlets. In America alone, 110m people like Mr Ingram, many on low incomes, suffer from obesity. They need help getting into shape. Novo Nordisk is their new port of call. It has been a wild ride. Following Ozempic’s serendipitous success, the firm’s newest potential blockbuster, Wegovy, was the first drug in years that America’s Food and Drug Administration (FDA) approved for obesity. This has meant some insurers cover it. For the past two years the company, which turns 100 in 2023, has traded like a growth stock, doubling in value to $326bn on hopes that overlapping diabetes and obesity drugs could become the biggest-selling class of pharmaceuticals ever. It is forecast to divide most of the market with Eli Lilly, an American firm, whose diabetes drug, Mounjaro, may win FDA approval for obesity this year. It is a race like that for the covid-19 vaccine. The combined market capitalisation of Novo Nordisk and Eli Lilly easily eclipses that of AstraZeneca, Moderna and Pfizer put together.In the eyes of some pundits, Novo has flubbed its lead. It underestimated demand, mishandled supply and let this slow down its ambitions to roll out Wegovy in Europe. Its boss, Lars Jorgensen, admits to some mistakes. But on balance, Novo deserves credit. A hesitant response to an unprecedented surge in demand is not the gravest of shortcomings. In the pandemic many firms, from e-merchants and carmakers to gunsmiths, struggled with demand shocks. Rather than lament Novo’s performance, learn from it. Its efforts to tackle obesity provide some golden rules on how to cope in the midst of a boom. The first thing to remember is knowing your onions. Analysts have long complained that Novo’s focus on diabetes-related illnesses make it the least diversified big pharma firm in Europe. But that is orthodoxy gone mad. One of the beauties of the firm, whose founders first made insulin in Denmark in the 1920s, is specialisation. In 1990 Michael Porter, a management guru, called Denmark’s insulin-exporting prowess one of its big competitive advantages. That industrial focus gave Novo a head start on obesity. For decades it toiled in the wilderness, while its rivals concluded obesity drugs were neither effective nor safe. But once it discovered that the GLP-1 medicines it used for diabetes, if made longer acting, could lead to at least 15% weight loss, it doubled down. Besides obesity, it hopes to use GLP-1-related drugs to help treat heart disease and other related illnesses. Its success is testimony to the virtue of innovating in adjacent, highly specialised businesses, rather than creating something from scratch. The second lesson is: know your real market. Novo was at first caught out because demand for obesity drugs spiked far sooner than that for its other drugs typically do, quickly depleting inventories. That deprived some patients of badly needed drugs, as influencers were using TikTok and other social-media apps to pep up demand. This served as a reminder of the dangerous distractions of the hype cycle. So now the firm is going back to basics. It is focusing on customers with a body-mass index (BMI) over 30, like Mr Ingram. It is working with doctors to ensure that they prescribe the drug correctly. And it has set about convincing insurers and health authorities to pay for obesity treatments. Third, keep control of capacity. As demand surged, one of the filling sites Novo had contracted in Europe malfunctioned. Mr Jorgensen says the situation is improving. It already has two more filling sites coming on stream, and in 2023 it intends to double capital spending for the second year in a row. But it should not overreact. Companies as clever as Amazon learned during the pandemic that excessive faith in a “new normal” leads to overcapacity. Many, including the e-commerce titan, have since shed people and property. The factories in America and Denmark where Novo makes the active ingredients for its medicines take five years to get up and running, at a cost of up to $2.5bn. That gives it a generous head start. Even with the obesity market’s huge promise, it is better to advance steadily than to rush. Skinny pens, fat profits Last, plan for the long haul. Profits are booming, which delights investors. But many of those who need obesity drugs are unable to afford them. According to a survey by Jefferies, an investment bank, Americans who earn less than $15,000 a year have the highest BMIs. Novo has every right to reap rewards for its innovations. Insurers may cover most of the costs. But to avoid a political backlash, it is important that those who need them most can access them. In order for obesity drugs to extend to other diseases, such as cardiovascular ones, it will be crucial to maintain goodwill. Like diabetes, obesity may be the start of another 100-year business. ■Read more from Schumpeter, our columnist on global business:It’s time for Alphabet to spin off YouTube (Feb 23rd)AI-wielding tech firms are giving a new shape to modern warfare (Feb 16th)What would Joseph Schumpeter have made of Apple? (Feb 9th) More