Boeing’s test flight of the 737 MAX aircraft in China last month went off ‘without a hitch’, according to the president of Boeing China, as it hopes to get its planes back in the air after being grounded for over two years.
Most countries around the world have given the green light for the planes to return to the skies after two fatal crashes forced governments around the world to ground them. China is the last major market to make a decision, with reports from Reuters suggesting the ban could be lifted around November.
Sherry Carbary, Boeing’s president in China, said the test flight undertaken last month went off without any problems and said she hoped the planes would be flying again in the country before the end of the year as she spoke at the sidelines of Airshow China. That will be significant considering around one-quarter of all the 737 MAX planes it was selling before the crashes were to customers in China.
Lucid Group announced yesterday that it has started producing its first cars from its factory in Arizona, allowing for the first Lucid Air premium electric sedans to start being delivered in late October.
CEO Peter Rawlinson told Reuters today that the business still expects to produce 577 cars before the end of the year and remains on course to produce 20,000 vehicles in 2022 and 50,000 in 2023. It also said that it expects the chip shortage to ease over the next year but that it is taking action to mitigate any disruption.
The CEO also confirmed that it has enough cash to see it through until the end of 2022, but said it would look to raise further funding beforehand to bolster the balance sheet further.
Customers hoping to get their hands on the new iPhone 13 are facing longer-than-expected delivery times because the pandemic is causing production problems in Vietnam, according to Nikkei Asia.
The report said the disruption is mainly being caused by limited supplies of the modules used in the cameras of the new model, as a substantial chunk of the components are assembled in Vietnam, which is struggling to cope with a rise in infections this year and disrupting businesses.
The impact could be short-lived and resolved by the middle of October as one key assembly site in Vietnam has started to gradually restart operations in recent days following months of disruption, the report said citing unnamed sources.
Micron Technology beat expectations when it released fourth quarter earnings after the closing bell yesterday as demand for its memory chips continues to strengthen, although warned it expected shipments to decline modestly in the current quarter.
Revenue rose to $8.27 billion from $6.06 billion the year before and beat the $8.22 billion forecast by analysts. That was the second highest quarterly revenue performance on record, just behind the stellar performance delivered in the third quarter. GAAP EPS jumped to $2.39 from just $0.87 last year, also coming in ahead of the $2.24 forecast by Wall Street.
However, it warned shipments of both of its core types of chips will decline in the current quarter as some customers tweak their orders amid a shortage of other components. Micron said it is expecting revenue of around $7.65 billion and EPS of around $2.00 in the first quarter of the new financial year. That would compare to the $5.77 billion in revenue and EPS of $0.71 delivered last year.
Sherwin Williams downgraded its sales and earnings expectations for the rest of the year as it struggles with constrained supply and rising costs.
The paint maker said it is now expecting third quarter net sales to be flat to ‘down slightly’ from the year before and that full year sales would be up by a high single-digit percentage. Previously, it was targeting mid-to-high single-digit growth in the third quarter and high-single to low-double digit growth over the full year.
CEO John Morikis said the downgrade had been made because ‘the persistent and industry-wide raw material availability constraints and pricing inflation we have previously reported have worsened,’ adding that it does not expect to see an improvement in the fourth quarter as previously anticipated.
Akamai Technologies said it has agreed to buy Israeli firm Guardicore to help bolster its security offering to businesses and improve its ability to defend customers from the spread of malware or ransomware.
Guardicore has a micro-segmentation feature that limits users access to those applications that are authorised to communicate with one another. Akamai said, by denying communication between apps as the default, the threat and risk of attack is ‘drastically reduced’. It said this protection extends beyond the data centre and helps defend the cloud and other networks. This will be added to Akamai’s existing protective solutions like its firewalls and secure web gateways.
Akamai is paying $600 million for Guardicore and the deal should close before the end of 2021. The company will add around $30 to $35 million in revenue in the 2022 financial year.
US regulators are considering approving the Moderna coronavirus vaccine to be used as a booster shot with just half the usual dose, potentially paving the way for the firm to boost supplies, according to reports from Bloomberg.
Citing unnamed sources, the report said the US Food & Drug Administration is considering allowing half-dose booster (of 50mg from the 100mg used today) of the Moderna jab, allowing the company to produce more doses. That would follow on from the recent approval of Pfizer’s coronavirus vaccine, developed with German outfit BioNTech, to be used as a booster shot last week.
AbbVie said yesterday that the US Food & Drug Administration has approved QULIPTA to be used as a preventative treatment against episodic migraines in adults.
The drug is the ‘first and only oral calcitonin gene-related peptide (CGRP) receptor antagonist (gepant) specifically developed for the preventive treatment of migraine’, the company said.
‘Millions of people living with migraine often lose days of productivity each month because attacks can be debilitating. QULIPTA can help by reducing monthly migraine days with a once-daily, oral dose that works quickly and continuously,’ said vice chairman and president Michael Severino. ‘We are proud that AbbVie is now the only pharmaceutical company to offer three products across the full spectrum of migraine treatment, which include preventive therapies for chronic and episodic migraine and an acute treatment for migraine attacks.’
Netflix has bought video game maker Night School Studio as it makes its big push into the gaming arena.
Night School Studio is best known for its first-ever game named OXENFREE and Netflix said the firm’s ‘commitment to artistic excellence and proven track record make them invaluable partners as we build out the creative capabilities and library of Netflix games together.’
Netflix is eagerly adding gaming content to offer to existing subscribers at no extra cost, pledging to keep them free of ads and in-app purchases.
Chinese tech stocks
China’s cyber regulator said today that it plans to introduce new governance rules for algorithms in around three years time, urging them to be underpinned by socialist values as it looks to clampdown on how big tech companies attract new users.
The move could spell trouble for firms like Alibaba and Tencent. The regulator said algorithms should promote the core values of socialism and for them to be more fair and transparent. It said it would ‘vigorously promote the research on algorithm innovations’ and ‘enhance the core competitiveness of China’s algorithms’.
The move follows on from the regulator introducing draft guidelines last month to prevent firms from using algorithms that try to get users to spend large sums of money, telling them to give users the option to turn algorithm-driven recommendation services off.
Analyst Recommendations: HP and Eli Lilly
HP was cut to Neutral from Overweight by JPMorgan on expectations that volumes in the PC industry will moderate following record shipments last year.
Eli Lilly was upgraded to Buy from Neutral by Citi, which believes the stock is undervalued following a recent slide in its share price, especially after posting a better-than-expected outlook.
Realogy Holdings had its target price cut to $26 from $28 by Evercore ISI after the firm repaid $435 million of outstanding debt using cash it had in the bank.
Wingstop had its price target raised to $205 from $184 by Piper Sandler on higher expectations for same-store sales going forward.
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