Business

Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer on Tuesday advised investors to pick up shares of Johnson & Johnson as a long-term play.
“I think it is precisely the kind of stock that you need to buy as we head into 2023, which should be a much better year,” he said.

CNBC’s Jim Cramer on Tuesday advised investors to pick up shares of Johnson & Johnson as a long-term play.
“I like the way J&J’s been trading over the last couple months, and after the quarter we saw this morning I think it is precisely the kind of stock that you need to buy as we head into 2023, which should be a much better year,” he said.

Johnson & Johnson beat top- and bottom-line expectations in its third-quarter results reported before the opening bell on Tuesday. The company lowered its earnings outlook due to the impact of the strong U.S. dollar.
Shares of the company closed down 0.35% after seesawing throughout the trading session — which means there’s now an opportunity for investors to pick up some shares, according to Cramer.
“J&J is a textbook recession-proof stock. … It’s exactly the kind of name you want to own when the Federal Reserve decides to slam the brakes on the economy,” he said.
He did acknowledge that the strong dollar and cost inflation remain serious macroeconomic headwinds to the company. However, those issues will likely become less prominent over the course of 2023, he said, noting that commodity costs have already come down.
Adding to his bull case for Johnson & Johnson is the company’s spinoff of its consumer health segment, which is on track for finalization next year. “I’m confident it’s going to be a tremendous catalyst,” he said.

Disclaimer: Cramer’s Charitable Trust owns shares of Johnson & Johnson.

Jim Cramer’s Guide to Investing

Click here to download Jim Cramer’s Guide to Investing at no cost to help you build long-term wealth and invest smarter.

WATCH LIVEWATCH IN THE APP More

Netflix will no longer forecast customer additions each quarter in an attempt to shift focus to revenue and profitability.
Netflix pointed out in a shareholder letter it makes more than $5 billion in operating profit while competitor streaming products lose money.
Even if Netflix asks investors to change their focus, it’s unclear if they’ll listen.

Netflix logo
Mario Tama | Getty Images News | Getty Images

Netflix has a message for investors: start focusing on revenue and profit, and stop obsessing about subscriber growth.
Netflix made its argument with several pointed comments in its quarterly shareholder letter. The world’s largest streamer said it will stop forecasting paid subscriber adds. The company’s rationale behind the change is to get investors focused on revenue instead of customer growth.

“We are increasingly focused on revenue as our primary top line metric,” Netflix wrote as it reported third quarter earnings Tuesday. “This will become particularly important heading into 2023 as we develop new revenue streams like advertising and paid sharing, where membership is just one component of our revenue growth.”
Netflix will continue to provide guidance for revenue, operating income, operating margin and net income — traditional metrics of profitability — and it will still report subscriber adds each quarter. It just won’t forecast what’s to come.
Part of the change is motivated by the increasingly wide array of revenue per user. A given subscriber could be paying $6.99 per month for Netflix’s new advertising tier, which debuts in the U.S. on November 3, or $19.99 per month for Netflix’s premium, no-ad service.
“Focusing on subscribers in our early days was helpful, but now that we have such a wide range of price points and different partnerships all over the world, the economic impact of any given subscriber can be quite different,” Spencer Wang, Netflix’s vice president of finance, said during the company’s earnings call Tuesday. “That’s particularly true if you’re trying to compare our business with our streaming services.”
Theoretically, Netflix’s advertising tier and coming crackdown on password sharing should reinvigorate subscriber growth. But Netflix, which gained 2.4 million subscribers in the third quarter on an “especially strong” content slate, led by “Stranger Things 4,” may see quarters with 10 million or more subscriber adds as a relic of the past.

Focusing on Netflix’s strengths

Instead of operating in a world filled with comparisons to a pandemic era fueled by surging growth, Netflix is attempting to steer investor focus to the fact that its streaming service actually makes money. Netflix directly addressed this point in the “Competition” section of its shareholder letter.
“It’s hard to build a large and profitable streaming business – our best estimate is that all of these competitors are losing money on streaming, with aggregate annual direct operating losses this year alone that could be well in excess of $10 billion, compared with our +$5-$6 billion of annual operating profit,” Netflix wrote.
In other words: Netflix is saying it has built a great streaming business, while Disney, Warner Bros. Discovery, Comcast’s NBCUniversal, Paramount Global, and others want to build a great streaming business. Netflix acknowledged some of their competitors may get there, through consolidation and price hikes.
This is a clear competitive advantage for Netflix, unlike subscriber adds, where Disney — earlier in its growth cycle, having launched Disney+ in 2019 — has the upper hand. Disney added 14.4 million Disney+ customers last quarter while Netflix lost 970,000.
Netflix shares surged after hours, rising 14%. The company is once again adding subscribers after losing customers in the first and second quarters. Next quarter, Netflix said it will add 4.5 million more customers.
But Netflix says we’re not supposed to be focused on that anymore. The question is whether investors will listen.
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.
WATCH: Pleasant surprises in this market are most welcome, says Netflix investor

WATCH LIVEWATCH IN THE APP More

Netflix beat third-quarter expectations on the top and bottom lines Tuesday.
The company said it added 2.41 million net subscribers during the quarter, higher than the 1 million it had forecast.
Netflix will begin to crack down on password sharing next year.

Netflix shares skyrocketed more than 14% after the bell Tuesday as the company posted better-than-expected results on the top and bottom lines. The streamer also reported the addition of 2.41 million net global subscribers, more than doubling the adds the company had projected a quarter ago.
Additionally, Netflix will begin to crack down on password sharing next year, opting to allow people who have been borrowing accounts to create their own. The company will also allow people sharing their accounts to create sub-accounts to pay for friends or family to use theirs.

Here are the results:

EPS: $3.10 vs. $2.13 per share, according to Refinitiv.
Revenue: $7.93 billion vs. $7.837 billion, according to Refinitiv survey.
Expected global paid net subscribers: Addition of 2.41 million subscribers vs. an addition of 1.09 million subscribers, according to StreetAccount estimates.

The majority of Netflix’s net subscriber growth during the quarter came from the Asia-Pacific region, which accounted for 1.43 million subscribers. The U.S.-Canada region had the smallest growth of Netflix’s regions, contributing just 100,000 net subscribers.
“We’re still not growing as fast as we’d like,” Spencer Neumann, Netflix’s chief financial officer, said during the company’s earnings call. “We are building momentum, we are pleased with our progress, but we know we still have a lot more work to do.”
Read more: This is what Netflix wants shareholders to pay attention to now
Starting next quarter, Netflix will no longer provide guidance for its paid memberships but will continue to report those numbers during its quarterly earnings release.

In this photo illustration the Netflix logo in the App Store seen displayed on a smartphone screen.
Rafael Henrique | SOPA Images | LightRocket | Getty Images

Netflix forecast it would add 4.5 million subscribers during its fiscal first quarter and said it expects revenue of $7.8 billion, largely due to currency pressures overseas.
The company touted shows and movies such as “Stranger Things” season four, “The Gray Man” and “Purple Hearts” as hits that helped move the needle during the third quarter.
It also teased the addition of its new lower-priced ad-supported plan, which launches in 12 countries in November.
The streamer said it was “very optimistic” about its new advertising business. While it doesn’t expect the new tier will add a material contribution to its fourth-quarter results, it foresees membership growing gradually over time. Its current forecast for subscriber growth is based on its upcoming content slate and the typical seasonality that comes during the last three months of the year.
“After a challenging first half, we believe we’re on a path to reaccelerate growth,” the company said in a statement Tuesday. “The key is pleasing members. It’s why we’ve always focused on winning the competition for viewing every day. When our series and movies excite our members, they tell their friends, and then more people watch, join and stay with us.”
Read Netflix’s earnings release here.

WATCH LIVEWATCH IN THE APP More

Monday – Friday, 6:00 – 7:00 PM ET

CNBC’s Jim Cramer on Tuesday warned investors to stay the course and weather the turbulent market.
“You have to resist the urge to rent stocks because you’ll get evicted when they inevitably decline in price,” he said.

CNBC’s Jim Cramer on Tuesday warned investors to stay the course and weather the turbulent market.
“You have to resist the urge to rent stocks because you’ll get evicted when they inevitably decline in price. Instead, you should be willing to own your favorites that have dividend and valuation protection, and buy more into weakness,” he said.

Stocks rallied for a second consecutive trading session on Tuesday on the heels of solid corporate earnings that continued the earnings season’s strong start.
Cramer, who has said that market rallies will remain temporary until the Federal Reserve beats inflation, reminded investors that the market is beholden to interest rates — strong earnings reports won’t be enough to keep a rally going for long.
And while that doesn’t mean investors should sell off their holdings, it does mean they have to be careful about the stocks they keep in their portfolios, according to Cramer.
“I encourage you to find businesses you like, preferably ones with dividends that sell at inexpensive price-to-earnings multiples,” he said.

Jim Cramer’s Guide to Investing

Click here to download Jim Cramer’s Guide to Investing at no cost to help you build long-term wealth and invest smarter.

WATCH LIVEWATCH IN THE APP More

Lafarge SA is pleading guilty and has agreed to pay a fine of $777.8 million to resolve a criminal charge related to the French company’s payments to the terror organization ISIS to keep a plant operating in Syria.
The more than $10 million payments to ISIS were made from 2012 through 2014, and occurred even as the terror group was kidnapping and killing Westerners.
The investigation that led to Lafarge being indicted in U.S. District Court in Brooklyn, New York, is ongoing. No individuals have been charged.
Lafarge was purchased by Switzerland-based Holcim in 2015.

Lafarge SA on Tuesday pleaded guilty and agreed to pay $777.8 million to resolve a U.S. federal criminal charge related to the French company’s payments to ISIS and another terror group to keep a cement plant operating in Syria.
The $10.24 million in payments to ISIS, the al-Nusrah Front and intermediaries were made from August 2013 through October 2014, and occurred even as the terror group was kidnapping and killing Westerners.

“Lafarge has admitted and taken responsibility for its staggering crime,” said U.S. Attorney Breon Peace in a statement. “Never before has a corporation been charged with providing material support and resources to foreign terrorist organizations.”

Eastern District of New York US Attorney Breon Peace speaks during a press conference in New York City on October 18, 2022.
Timothy A. Clary | AFP | Getty Images

Peace’s office said Lafarge Cement Syria executives bought materials needed for their cement plant in the Jalabiyeh region of northern Syria from ISIS-controlled suppliers, and paid monthly “donations” to ISIS and ANF, so that employees, customers and suppliers could cross checkpoints around the plant.
Lafarge Cement Syria “eventually agreed to make payments to ISIS based on the volume of cement that LCS sold to its customers, which Lafarge and LCS executives likened to paying ‘taxes,'” Peace’s office said.
An indictment against Lafarge and its defunct Syrian subsidiary was unsealed in U.S. District Court in Brooklyn, New York, charging them with one count of conspiring to provide material support to a designated foreign terrorist organization, Lafarge pleaded guilty and was sentenced at a hearing there.
No individuals have been charged in the case, but authorities said their investigation is ongoing.

“In the midst of a civil war, Lafarge made the unthinkable choice to put money into the hands of ISIS, one of the world’s most barbaric terrorist organizations, so that it could continue selling cement,” Peace said.
“Lafarge did this not merely in exchange for permission to operate its cement plant – which would have been bad enough – but also to leverage its relationship with ISIS for economic advantage, seeking ISIS’s assistance to hurt Lafarge’s competition in exchange for a cut of Lafarge’s sales,” Peace said.

Arrows pointing outwards

ISIS Vehicle Pass

Lafarge was purchased by Switzerland-based Holcim in 2015.
In a statement, Lafarge said, “Lafarge SA and [Lafarge Cement Syria] have accepted responsibility for the actions of the individual executives involved, whose behavior was in flagrant violation of Lafarge’s Code of Conduct.
“We deeply regret that this conduct occurred and have worked with the U.S. Department of Justice to resolve this matter,” Lafarge said.
Holcim in a statement to CNBC said it supports the plea agreement that Lafarge reached with the DOJ.

CNBC Politics

Read more of CNBC’s politics coverage:

Georgia breaks first-day early voting record, nearly doubles figure from last midterms
Here are the top Senate races to watch in the 2022 midterms
Democrats in key Senate races have more cash to spend than Republicans in the final midterm push
DOJ seeks 6 months in jail, $200,000 fine for Steve Bannon for contempt of Congress
TransUnion, Equifax, Experian may have violated credit reporting rules, Rep. Jim Clyburn says
Trump won’t be the Republican nominee in 2024, ex-GOP House Speaker Paul Ryan predicts
Jan. 6 Capitol riot probe obtained records showing multiple calls between Secret Service and Oath Keepers
Supreme Court denies Trump bid to void ruling in Mar-a-Lago raid documents case
Treasury’s Yellen says Russia’s war has weakened its economy ‘for years to come’
North Korea flies warplanes near border and tests another ballistic missile
Treasury investigates whether Florida used Covid aid to fly migrants to Martha’s Vineyard
Jury recommends life in prison without parole for gunman, rejects death penalty
Biden’s national security plan identifies Russia as imminent danger, China as long-term threat
Judge denies Trump request to delay deposition in E. Jean Carroll rape defamation case
Warnock leads Walker, but Georgia Senate race is unchanged after abortion payment allegation, poll shows

“None of the conduct involved Holcim, which has never operated in Syria, or any Lafarge operations or employees in the United States, and it is in stark contrast with everything that Holcim stands for,” Holcim said in that statement.
“The DOJ noted that former Lafarge SA and [Lafarge Cement Syria] executives involved in the conduct concealed it from Holcim before and after Holcim acquired Lafarge SA, as well as from external auditors,” Holcim said.
“When Holcim learned of the allegations from media reports in 2016, Holcim proactively and voluntarily conducted an extensive investigation, led by a major U.S. law firm and overseen by the Board of Directors. It publicly disclosed the principal investigative findings in 2017 and separated from former Lafarge SA and LCS executives who were involved in these events.”

Magali Anderson, CEO of LaFarge stands, flanked by her attorneys David Sarratt and Douglas Zolkind, during the sentencing of La Farge in Brooklyn Federal Court.
Elizabeth Williams

Lafarge was indicted by French authorities in 2018 in connection with the ISIS payments on charges of being complicit in crimes against humanity.
In its statement Tuesday, Lafarge said it “continues to cooperate fully with the French authorities in their investigation of the conduct and will defend itself against any judicial actions that it regards as unjustified in the French proceedings.”
Holcim said in its statement that the DOJ has determined that it is not necessary to appoint an independent compliance monitor for Lafarge because Holcim has effective compliance and risk management controls to detect potential similar conduct.
Correction: Lafarge SA pleaded guilty and agreed to pay $777.8 million to resolve a U.S. federal criminal charge. An earlier version misstated the figure.

WATCH LIVEWATCH IN THE APP More

United said unit revenues were up more than 25% from 2019 levels. 
Airlines have been upbeat about consumer demand despite high inflation.
United executives will hold an analyst call on Wednesday morning.

United Airlines forecast another profit for the end of the year and said consumer appetite for travel is showing no signs of slowing down despite high airfares.
Shares jumped more than 7% in after-hours trading on Tuesday.

“Looking forward through the end of the year, the airline expects the strong Covid recovery trends to continue to overcome the recessionary pressures in the macroeconomic environment,” United said in an earnings release. “The airline now expects fourth-quarter adjusted operating margin to be above 2019 for the first time.”
The Chicago-based carrier posted a third-quarter profit of $942 million, down 8% from three years ago, and $12.88 billion in revenue, which was ahead of analysts’ estimates and up 13% from 2019.

A United Airlines Boeing 777-200 aircraft
Nicolas Economou | NurPhoto | Getty Images

Adjusting for one-time items, United earned $2.81 per share, easily topping the $2.28 analysts polled by Refinitiv were expecting.
The airline said it expects adjusted earnings per share of as much as $2.25 for the fourth quarter, far ahead of analysts’ estimates of 98 cents, according to Refinitiv.
The strong summer travel season and sunny outlook for the rest of the year indicate consumers are willing to continue to spend on trips, a turnaround from early in the pandemic when Covid-19 restrictions devastated demand. Delta Air Lines last week said it brought in record revenue for the third quarter and forecast another profit for the fourth quarter.

The upbeat outlooks from airline executives contrast with other sectors that have struggled this year, including parts of the retail industry and some streaming platforms that were beneficiaries of lockdowns early in the pandemic.
Here’s how United performed in the third quarter compared with what Wall Street expected, based on average estimates compiled by Refinitiv:

Adjusted earnings per share: $2.81 versus an expected $2.28
Total revenue: $12.88 billion versus expected $12.75 billion.

U.S. airline executives have recently noted strong demand to Europe well past the summer peak and into the fall, and are keeping more capacity in those markets in response, CNBC reported last month.
Airlines remain constrained in how many flights they can offer as aircraft deliveries run late because of supply chain problems and other issues, and carriers scramble to hire and train new staff, particularly pilots.
Limited supply of flights is keeping fares up. United said its third-quarter revenue per available seat mile was up more than 25% from three years earlier. For the current quarter, it expects that metric to be up by as much as that amount compared with 2019.
Meanwhile, the carrier said its fourth-quarter capacity will likely be down about 10% compared with 2019, similar to its capacity in the third quarter.
United executives will hold a call with analysts on Wednesday at 10:30 a.m. EDT.

WATCH LIVEWATCH IN THE APP More

Rolls-Royce CEO Torsten Muller-Otvos told CNBC the buyers visited the company’s headquarters in England to get a sneak peak at the Spectre.
The company’s first electric vehicle was publicly revealed Tuesday and comes starting price tag of $413,000.
General Motors this week unveiled its Celestiq electric vehicle, which starts at more than $300,000.

More than 300 U.S. buyers have already put down deposits for Rolls-Royce’s first electric vehicle prior to its unveiling on Tuesday, the luxury automaker’s CEO told CNBC.
Rolls-Royce CEO Torsten Muller-Otvos told CNBC that the buyers visited the company’s headquarters in Goodwood, England over the past two weeks to get a sneak peak at the Spectre, which was publicly revealed Tuesday and comes with a starting price tag of $413,000.

The two-door coupe, which is sleeker than a typical Rolls, has a range of about 320 miles and can go from 0-60 miles per hour in 4.4 seconds. Rolls-Royce has said its entire product line will be fully electric by 2030.
Muller-Otvos said the buyers put down deposits before they even saw the car.
“Once they have seen it here, they are delighted,” he said. “The order book looks strong.”

Rolls Royce Spectre
Courtesy: Rolls-Royce

The car is the most expensive of EV coupe on the market and defines a new category of what Rolls calls an “Ultra-Luxury Electric Super Coupé.” General Motors, meanwhile, this week unveiled its Celestiq electric vehicle, which starts at more than $300,000.
Muller-Otvos said the switch to EVs is a natural for Rolls, since its cars are already famous for their smooth, quiet rides and quick power.

“It needs to be a Rolls-Royce first,” Muller-Otvos said. “That means stability, brilliant quality, timeless materials, flight-on-land, silent propulsion. It carries all these genes Rolls-Royce is famous for.”

Muller-Otvos declined to give specific sales targets or goals for the Spectre. In 2021, Rolls-Royce had a record year in terms of sales and production, delivering 5,586 cars.
“In terms of proportion (of sales), I would say Cullinan, our great SUV is one column. The second column is the Ghost, our great limousine. And then comes Spectre as the third column,” he said.
Among the special features in the Spectre are an illuminated front grille with 22 LEDs, a flowing aerodynamic “waft” line along the sides modeled after racing yachts and new digital intelligence system called Spirit. Its famous “Spirit of Ecstasy” hood ornament was also be redesigned, with a more modern look.

Rolls Royce Spectre
Courtesy: Rolls-Royce

Other Rolls Royce models offer the popular “starlight headliner,” with over 1,400 tiny stars that light up on the car roof at night. As a special option, Spectre will offer the “Illuminated Fascia” of over 5,500 stars along the doors and roof.
“Spectre is the most perfect product that Rolls Royce has ever produced,” Muller-Otvos said.

WATCH LIVEWATCH IN THE APP More

Amazon will stream the first ever Black Friday NFL game in 2023.
The game will take place the day after Thanksgiving at 3 p.m. ET on the online retailer’s Prime Video platform.
This places a game with potentially millions of U.S. viewers in the middle of the massive brick-and-mortar retail holiday.

Kansas City Chiefs tight end Travis Kelce (87) runs the ball in for a touchdown against the Tampa Bay Buccaneers during the first quarter at Raymond James Stadium, Oct. 2, 2022.
Kim Klement | USA Today Sports | Reuters

Amazon will stream the first ever Black Friday NFL game in November 2023, the company revealed in a joint announcement with the National Football League on Tuesday.
The game — which will take place on at 3 p.m. ET on Nov. 24, 2023, — is the first NFL competition to take place on the day after Thanksgiving, which itself is a traditionally big day for NFL games. The teams for the Black Friday game will be announced along with the rest of the matchups in next season’s NFL schedule.

The announcement places the game on the key discount holiday for brick-and-mortar retailers, and the game could drive shopper traffic away from stores and towards Amazon. Amazon provides online discounts on both Black Friday and Cyber Monday of that holiday weekend.
“Black Friday is the unofficial start of the holiday season, and we’re thrilled to kick it off with a gift for football fans across the country with this new game,” said Jay Marine, Global Head of Sports at Prime Video.
Even without an NFL game to deal with, Black Friday this year is already expected to underperform past years. Amazon’s move may only exacerbate that weakness, which has been growing as stores increasingly spread out promotions across the holiday season.
The announcement lauded Amazon’s “Thursday Night Football” broadcast, which began this year and is averaging 10.8 million weekly viewers, according to Nielson. That viewership is 48% higher than the viewership of “Thursday Night Football” in 2021, according to Tuesday’s release.
–CNBC’s Jessica Golden contributed to this report.

WATCH LIVEWATCH IN THE APP More