July 25, 2025 • 37 mins
Watch Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Hosts: Paul Sweeney and Lisa Mateo
On this podcast:
- Mandeep Singh, Bloomberg Intelligence Senior Tech Industry Analyst, recaps Alphabet earnings.
- Kenneth Shea, Bloomberg Intelligence Senior Consumer Products Analyst, discusses Coca Cola and Philip Morris earnings.
- John Butler, Bloomberg Intelligence Senior Telecom Analyst, discusses Verizon earnings.
- Lindsay Dutch, Bloomberg Intelligence Consumer Hardlines Senior Analyst, discusses Hasbro earnings.
- Jody Lurie, Bloomberg Intelligence Credit Analyst, discusses Hilton Worldwide earnings.
- David Welch, Bloomberg Detroit Bureau Chief, discusses GM earnings.
- Max Chafkin, Bloomberg Businessweek Senior Reporter and Co-Host of the Elon Inc Podcast, discusses the Bloomberg Big Take story: “Elon Musk’s Empire Is Creaking Under the Strain of His Antics.”
Bloomberg Intelligence, the research arm of Bloomberg L.P., has more than 400 professionals who provide in-depth analysis on more than 2,000 companies and 135 industries while considering strategic, equity and credit perspectives. BI also provides interactive data from over 500 independent contributors. It is available exclusively for Bloomberg Terminal subscribers.
See omnystudio.com/listener for privacy information.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Intelligence
with Paul Sweeney.
Speaker 2 (00:13):
The real app performance has been the US corporate high yield.
These are two big time blue chip companies. One person's
cast is another person's animal spirits.
Speaker 1 (00:22):
Breaking market headlines and corporate news from across the globe.
Speaker 3 (00:26):
Our viewer is if the economy is slowing.
Speaker 2 (00:28):
Down, there is the possibility of the debt spirals.
Speaker 4 (00:30):
Both tutum competing and AI are going to power the future.
Speaker 1 (00:33):
People are just buying everything with tex Bloomberg Intelligence with
Paul Sweeney on Bloomberg Radio, YouTube and Bloomberg Originals.
Speaker 5 (00:42):
I'm Paul Sweeney and I'm Lis Matteo filling in on
Bloomberg Intelligence.
Speaker 2 (00:45):
On Today's Bloomberg Intelligence Show, we dig inside the big
business stories impacting Wall Street and the global markets. Each
and every week, we provide in depth research and data
on some of the two thousand companies and one hundred
and thirty industries our analysts covered worldwide. Today, we'll look
at why the toymaker has broken is raising its full
year outlook.
Speaker 5 (01:02):
Plus we'll look at how General Motors is being impacted
by President Donald Trump's tariffs.
Speaker 2 (01:06):
But First, let's begin with the tech sector.
Speaker 5 (01:08):
This week, tech giant Alphabet reported second quarter earnings that
beat analyst expectations. Alphabet said demand for artificial intelligence products
boosted quarterly sales and now requires an extreme increase in
capital spending for more.
Speaker 2 (01:21):
Lisa and I were joined by Mandep Singh, Bloomberg Intelligence
senior tech industry analyst.
Speaker 5 (01:25):
We first asked man Deep for his take on Alphabet's
most recent earnings.
Speaker 6 (01:29):
The fact that they are able to grow their search
business double digit at that kind of run rate two
hundred ten billion dollar plus. Like, think of how many
incremental dollars they added just by virtue of that eleven
percent growth in the two hundred ten billion dollar business.
And that is where you know the real strength lies
(01:53):
with a company like Alphabet. They are overlaying Gemini across
their family apps. AI overviews is actually driving ten percent
more queries and AI Overviews is now used by two
billion monthly active users. So Google Search has five billion
monthly active users. Imagine AI overviews being used by two
(02:15):
billion monthly active users. So they got the UI part right.
Gemini as a standalone app has got four hundred and
fifty million monthly active users. Imagine if everyone started paying
a twenty dollars subscription like chatchipt, this could become one
hundred billion dollar business. In addition to search and then YouTube,
I'm not even talking about you know, I'll talk about
(02:39):
all the strengthen YouTube and way more. So this is
a powerhouse when it comes to four hundred billion dollar
run rate they will be at the end of the year.
Speaker 5 (02:47):
So can you explain something to me, Because when the
shares dropped because they said capex was a little bit more,
well ten billion dollars more than expected a little bit,
how is that different for an alphabet versus metaphor to
say that?
Speaker 6 (03:01):
So that's great. So look, let's frame the capex eighty
five billion dollars at potentially a four hundred billion dollar
revenue run rate by the end of the year. That's
like a twenty five percent capex intensity. Meta, on the
other hand, is already at a forty percent capex intensity
because their CAPEX will be seventy billion at a undred
(03:21):
of close to two hundred billion. So that just goes
to show Alphabet is still far lower than their peer
group when it comes to the capex intensity. I mean,
that's just the scale of the business that they are operating.
And look, I do think the ROI on their capex
is higher because Gemini's cost is much lower than all
(03:42):
the other large ANGLID models, including Microsoft, including Meta. They
do inferencing at a lower cost. And that's the advantage
of having your own chip, having your own large ANGLID
model that Microsoft or Meta don't have because they rely
on in video chips, whereas Google does most of their
inferencing from the TPU chip. So I think that just
(04:05):
vertical integration they have Alphabet has gives them such a
big cost advantage when it comes to running the AI infrastructure.
Speaker 2 (04:12):
Where's the company on the various regulatory issues outstanding? What
are the one or two or three ones that we've
really got to focus on in what's the market telling us?
Speaker 6 (04:21):
So that's the biggest risk with Alphabet. That has been
the biggest rag on their multiple and it remains because
we have a catalyst next month where Judge Meta is
going to make a decision on the remedies. And you know,
especially that Chrome split, that's still an overhang. Now the
base case is there won't be any Chrome divestiture, but
(04:42):
we still need to learn about what are the remedies
that may come about in terms of you know, proposed
by the judge, and that is where if they're asked
to you know, share search data or some other type
of remedy, that's going to hurt their position. I think
that is the big Overhay.
Speaker 2 (04:59):
This one could be this one. If you have a
firm view on that. You buy the stock here and
there's there's a ton in this thing. Are people doing that?
Are people making bets here?
Speaker 6 (05:09):
Think?
Speaker 2 (05:09):
I bet you they have to be.
Speaker 6 (05:11):
I mean, the narrative is still no netive, so negative.
Everyone is fixated on oh chat ChiPT my work.
Speaker 2 (05:18):
Bobby Action Rod on billions would somehow figure out where
this judge is going to rule, make a bet one
way or the other. You know, there's the Bobby Action
Rods of the world out.
Speaker 6 (05:27):
I agree. I think if you can figure out decisively
what the judges verdict is going to be, the multiple wise,
you could see easily a twenty five to thirty percent
multiple expansion and numbers will go up for sure after
print last night. But multiple expansion is like twenty five
to thirty percent. Just and when is that ruling that's
(05:47):
coming up in August September time frame to keep up with.
Speaker 5 (05:51):
These things to do.
Speaker 2 (05:52):
It's got like a huge team, global team behind him.
I mean all he does is come on radio, TV
and they give all the work. He's got everything everything.
Speaker 5 (06:03):
So you mentioned YouTube before Google Video site, how is
its advertising still going? Still going strong?
Speaker 6 (06:09):
So look, YouTube subscriptions is what it's really doing well
right now. So YouTube subscription growth is north of twenty percent. Imagine,
you know, Netflix growing sixteen seventeen percent, YouTube subscriptions actually
surpassing Netflix's growth. And then you layer ads on top
of that, which grew at a very healthy thirteen percent.
(06:30):
So ads is a forty billion dollar business. Subscriptions is
now close to you know, twenty billion dollars, and that
is where you're seeing, you know, combined cloud plus YouTube
arr is close to one hundred and fifteen billion. So
imagine when just these two segments growing at north of
twenty percent. I mean, it's it's just a phenomenal business
(06:53):
these to both cloud and YouTube and on a standalone basis,
there is so much runway for growing the to segment.
Speaker 2 (07:01):
Our thanks to Man Deep Seeing Bloomberg Intelligence senior tech
industry analyst.
Speaker 5 (07:05):
We moved next to consumer earnings. Earlier this week, Philip
Morris posted second quarter earnings that missed analysts expectations.
Speaker 2 (07:11):
The results were due to the company's Zen nicotine pouch
shipments accelerating less than expected. Separately, Coca Cola reported second
quarter earnings that beat analse expectations.
Speaker 5 (07:21):
And this came as a company announced it was launching
a new version of its coke product made with US
sugarcane this fall. President Donald Trump had urged a company
to do so.
Speaker 2 (07:29):
For more Lisa and I were joined by Ken Shay,
Bloomberg Intelligence Senior consumer products analyst.
Speaker 5 (07:34):
We first asked Ken to explain why Coca Cola is
making a switch to cane sugar and if pressure from
President Trump had an impact.
Speaker 3 (07:41):
It certainly is in sync with what Coca Cola has
been doing for a long time, and that is keeping
its post on what the consumer wants to do. It
has a lot of assets at his disposal, and a
cane sugar product is not novel to Coca Cola. I mean,
it's produced it in the US, largely more outside of US,
but in the US on a selected basis, So it's
(08:02):
really just going to expand that it may have been
prompted to a degree by the President's tweets or whatever,
but it's certainly in synct. Like I said, you know,
there's a there's an audience out there that prefers sugar
based as opposed to high fructose corn cruit based, full
calorie sodas, and they're going to play into that. Most likely,
(08:23):
it's going to be a brand Coke extension, and it's
going to be sell at a premium price in selected
markets to give it, uh an aura of exclusivity. I'm
guessing to to command those prices, and so just as
a little more excitement. It's it's one of many things
Coke is doing now on the innovation front.
Speaker 2 (08:41):
So from Coca Cola's economic perspective, do they care which
ingredient they use?
Speaker 3 (08:48):
Well, it depends, Paul, It depends if they can capture
the premium price they're going to, you know, price it
at kin share costs more than high fructose corns herup.
You know, a corn is a heavily, heavily subsidized crop
in the US. UH they built their supply chain around
HFCs because of that, and most consumers early, you know,
they don't really notice the difference. Some do but buy
(09:10):
and large. You know, they've grown that franchise very well.
But I guess you know some tourists that go to
Mexico and they taste the sugar cane sugar coke down
there and they say, you know what, this is really
good and they want to capture the same experience in
the US.
Speaker 2 (09:26):
I'm going to Chipotle and they do offer the Mexican
zoda there. Let me ask, let me shift gears here.
What is a zin patch?
Speaker 3 (09:36):
A zin patch? You want a patch?
Speaker 6 (09:38):
It?
Speaker 3 (09:38):
I think they made a pouch pouch, Zin pouch, a pouch.
You know, it's a it's an oral tobacco product. Actually,
zin isn't. It really doesn't even contain tobacco. It's a
synthetic products. It's lads with nicotine that is a facsimile
for tobacco, which a lot of people will say causes harm,
and a lot of people are right. So this is
(09:59):
a product that you know, people can get their nicotine
buzz in a you know, hands off kind of way,
doesn't emit smoke, doesn't offend your neighbor that you're working with. Uh,
and it's done really really well. So those are really
the Zin pouches that are doing really well. Yeah, yeah, I.
Speaker 2 (10:14):
Thought it was Zinfindel the wine. That's no kidding, no idea,
that pouch. So but I mean it's it's big enough
a business can that Philip mars would would call it out.
Speaker 3 (10:27):
Oh yeah, I know it in it's about eight percent
of the sales, I believe at this point, but it's growing,
you know, a twenty thirty percent rate as opposed to cigarettes,
which are flat, if not down. But you know, Icoas
is their smoke free device segment, which is doing very well.
But if the low large numbers at some point, that's
going to slow and Zen is filling the gap. They
(10:48):
keep the overall volumes in a positive trend. They price
these things very high. There's not a lot of competition
in this space. So you know, one of the things
investors would say about the world of tobacco, because it's
so consolidated, they can pass on a very high pricing
and that's what really drives a top line and you know,
the cash flows and so on, and Zen plays very,
(11:09):
very very well into that model.
Speaker 5 (11:11):
And how does it fair as far as we hear
about e cigarettes, vaping things like that, how has Philip
Marris been doing competing with this category.
Speaker 3 (11:20):
So they have a product called viv which is their
e vapor product as opposed to what they call Heat
not Burn, which has actual tobacco in it, and they
would say as a more appealing alternative for smokers who
are trying to quit. It's a lower margin product. It's
kind of seen by Philip Morris as a kind of
an entry level product for those who are trying to
(11:43):
move away from combustible cigarettes. They can turn to e
cigarettes a low cost method, and their hope is that,
you know, even though it's a low margin product, their
hope is that they can get that consumer maybe at
some point to trade up to their heat not Burn product,
which is, you know, a more profitable product for them.
Speaker 2 (12:04):
Our thanks to Ken Shay, Bloomberg Intelligence Senior Consumer Products analyst.
Speaker 5 (12:07):
Coming up, well look at why the hotel chain Hilton
lowered expectations for net income this year.
Speaker 2 (12:12):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies and one
hundred and thirty industries.
Speaker 5 (12:18):
You can access Bloomberg Intelligence via Big on the terminal.
I'm Lis Matteo and I'm Paul Sweeney.
Speaker 2 (12:24):
This is Bloomberg.
Speaker 1 (12:29):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple Corplay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 5 (12:43):
I'm Paul Sweeney and I'm Lis Mateo filling in on
Bloomberg Intelligence.
Speaker 2 (12:47):
We move next to the telecommunication space. This week, Verizon
Communications posted second quarter revenue that surpassed analyst estimates, and
the company raised this profit outlook.
Speaker 5 (12:56):
The results were fueled by wireless price increases and favorable
tax reform.
Speaker 2 (13:00):
For more at Least and I were joined by John Butler,
Bloomberg Intelligence senior telecom analysts.
Speaker 5 (13:04):
We first asked John, what's making the company so optimistic?
Speaker 7 (13:07):
When I look at Verizon, I think of the phrase
game of the inches, right. I think the improvements here
quartering and quarter out are incrementally better. They're edging towards
that acquisition of Frontier, which is really going to change
the game for them. But in the meantime, they put
(13:27):
a lot of changes in place in terms of their
go to market strategy, how they're combating promotions coming from
T Mobile and AT and T and on the margin
quarterin and quarter out, I just see them doing a
better and better job. I think all the actions they've
taken are starting to work, and so taking the long
(13:51):
view here, I really think Verizon is improving just quartering
and quarter out. And this was another quarter where you
could look at it in isolation and say, you know,
it was a solid quarter, a little bit mixed on
some of the metrics, but I think I'm balanced better
(14:11):
than last quarter and last year.
Speaker 2 (14:14):
John, what's kind of the positioning of Verizon in the marketplace? Like,
I've been a long time Verizon wireless customers since the
beginning of cillier service actually, and I guess I was
initially drawn to it because I thought they had the
best network. So quality, is that still the case because
it seems like T Mobile's gotten a lot better in
quality and AT and T. I don't know.
Speaker 7 (14:36):
Yeah, you know, Paul, you bring up a good point.
I think there's a question mark out there as to
whether Verizon still has the best network versus T Mobile
and AT and T. But I think they have a
slight edge they are in terms of coverage. And it's
interesting a lot of people ask me about wireless, who
was the best network? Who should I choose? And the
(14:59):
one thing that people are always ask about is how's
their coverage. I think coverage is very important to people,
and I think when you think on that metric. In
terms of that metric, for Riizon delivers the bars on
your smartphone, probably more than T Mobile and AT and
T in terms of download speeds, though I suspect that
(15:21):
T Mobile probably is gaining the edge here.
Speaker 5 (15:25):
Now, what about prices? Did Verizon increase their prices? If so,
did that help?
Speaker 6 (15:30):
So?
Speaker 7 (15:31):
We did see in all the carriers are increasing prices
right now as the market matures and new user growth
is slowing considerably. The only way you're going to grow
that important service revenue metric is by raising prices. They
tend to do it on older plans for riizing stunted
over the past six months. As if you look over
(15:54):
the past year, so as AT and T and T Mobile,
that's flowing through and it's helping to boost the service revenue.
I think over time they're adding in those little extras
like you know, device insurance and perks like you know,
added content that you can purchase at a discount through
(16:15):
through Verizon, and I think all that together is going
to continue to provide a lift to service revenue. It's
nothing special.
Speaker 6 (16:24):
Again.
Speaker 7 (16:25):
I'm looking forward to that Frontier acquisition where they're going
to buy, you know, access to two million Fiber broadband
subscribers and eight million fiber homes passed, because once they
get Frontier under the hood, they're going to be able
to bundle that wireless service with Fiber and I think
(16:46):
that's going to help to really drive renewed UH subscriber growth.
Speaker 2 (16:52):
Our thanks to John Butler, Bloomberg Intelligence Senior Telecom Analist.
Speaker 5 (16:55):
We move next to the toy industry.
Speaker 2 (16:57):
This week, the toy maker has But reported second quarter
earnings that beat analyst expectations.
Speaker 5 (17:01):
The company also said it's raising its full year outlook.
This comes after a record quarter for Hasbro's Magic the
Gathering card game.
Speaker 2 (17:08):
For more, co host Isabelle Lee and I were joined
by Lindsey Dutch, Bloomberg Intelligence Consumer Hardlines Senior Analyst. You
first asked Lindsay to break down what we learned from
Hasbro this week.
Speaker 4 (17:18):
Strong quarter are really a continuation from the first quarter
where all the strength is really coming from Magic the
Gathering Monopoly go and Hasbro's digital gaming business. What we
did not learn from the release is really about the
consumer and what the outlook is for toys in the
second half, and that's causing a lot of uncertainty what
(17:39):
that back half might look like.
Speaker 8 (17:42):
I was going to ask how exposed is Hasbro to
current consumers spending trends, Like, especially in the toys and
entertainment area, do we see more middle income shoppers buying
Hasbro or what kind of consumers are you seeing?
Speaker 4 (17:55):
Yeah, so the toy business typically grows with GDP. It
has been you know, coming down a bit challenge over
the past couple of years after the peak during COVID
when everyone was stuck at home buying a lot of toys.
This year was supposed to be a turnaround year four
toys and then early this year, you know, we got
hit with the tariff news, which created a lot of
uncertainty in the business. One is, you know, we don't
(18:19):
know how the consumer is going to react to broader
price increases, and we do expect increases on toys very specifically,
so companies like Hasbro and Mattel, you know what some
of the biggest toy makers in the globe you know,
are really faced with that challenge in second quarter. Normally
retailers already start buying their holiday inventory. That didn't happen
(18:42):
this year. Those retailers Walmart, Target, took a pause. So
normally by now we would sort of get a sense
of holiday But because of that pullback, you know, Hasbro
saw their consumer products segment see a sixteen percent decline
in the second quarter revenue because of that hold on
those orders.
Speaker 2 (19:00):
Thought they would have tried to front run the tariffs. Here,
what's the company saying about when they expect some of
these retailers to place their orders, so.
Speaker 4 (19:08):
They expect the orders to be sort of made up
in the third quarter. And the challenge with that is,
you know, some of those hotter toys that do sell
out maybe in the early holiday shopping season, there will
be very little time to sort of replenish on that end.
So Hasbro did continue their production, which you know they
do still make about fifty percent of their toy products
(19:29):
in China. They continued in May. You know, they took
some of that inventory on their books in the second quarter.
That's why we saw the inventory come up there. You know,
they're hoping that the retailers, you know, place more of
their orders in the third quarter, you know, ahead of holiday.
You know, the risk is they just don't really know
what those pre order will be and there will be
limited time for additional orders like in that fourth quarter
(19:54):
right before holiday.
Speaker 8 (19:56):
To your point. In April, the company warned the tires
clid impact profit by as much as sixty million two
hundred and eighty million this year, and they did reduce
their Chinese manufacturing output to less than forty percent, or
at least plan to by twenty twenty six. If they
do that, will they pass on the cost to consumers?
And do you think consumers will bear the brand of
that burden.
Speaker 4 (20:15):
Yes, so Hasbro is using multiple mitigation strategies. You know,
they have been very focused on cutting costs. You know,
prior to tariffs, they sort of accelerated some cost cutting
at the corporate level. They will be raising prices, I
think selectively on toys. They are also just going to
not sell certain toys in the US if it can't
(20:38):
it doesn't make financial sense to do so if they
can't raise the price and consumers would not buy it
at that price. So they're sort of using a mixed strategy.
They had predicted tariffs to cost sixty million to one
eighty million on an annual basis three months ago. They
sort of dropped that impact closer to the sixty million side.
(20:58):
That's because of lower rate on the Chinese imports. They
are working to diversify the supply chain, but that will
take time. The goal of less than forty percent that's
really by twenty twenty seven, So in terms of this year,
you know where their supply chain is. They're sort of
locked in with that at the moment, and they kind
of have to work with the price increases and sort
(21:19):
of balancing where do I increase price and not hurt
the demand even.
Speaker 5 (21:23):
More our thanks to Lindsay Dutch, Bloomberg Intelligence Consumer Hardline
Senior Analyst, we've.
Speaker 2 (21:28):
Moved next to the hospitality industry. This week. The hotel
chain Hilton Worldwide lowered expectations for net income for twenty
twenty five, while US hotel booking declined in the second quarter,
and this comes as.
Speaker 5 (21:39):
US travel demand has faced headwinds in recent months, including
lower consumer confidence and a decline in international visitors.
Speaker 2 (21:45):
For more co hosts, Isabelle Lee and I were joined
by Jody Lourie Bloomberg Intelligence credit analyst. We first asked
Jodie what we learned about Hilton from It's Ernie's call
this week.
Speaker 9 (21:54):
I mean, I think what's so interesting is they definitely
tried to provide an upbeat, optimistic view. The amount of
times they talked about the thawing that after the freeze
from tariffs was sort of interesting to hear, and I mean,
I think it fits a little bit with the conversation
that we've been having with clients is that what we've
been seeing in our data is twenty twenty five summer
(22:15):
should still be pretty strong, but I think as we
get into the latter part of the year and then
into next year, it's a little bit uncertain. And I
think they were trying to suggest that economic data is
positive for them and will provide for additional sort of demand,
but it's still a little bit, you know, it's still
(22:36):
a little bit hazy, at least for me. And I
mean more than anything, you know, they're so focused on
giving back to shareholders that and.
Speaker 2 (22:44):
There's a credit analyst that's not something.
Speaker 9 (22:46):
Necessarily that's yeah, yeah, you know, Hilton's one of those
companies that we say, if they wanted to be investment grade.
They probably could work to it yesterday and would have
been investment grade five years ago. But you know, from
a margin standpoint, they're so much stronger than of their peers.
But from a leverage standpoint, they just they're happy being
around three times three and a half times, and they've
(23:06):
indicated that they want to be a little bit higher
than where they currently are. So I mean, I think
they're going to invest in organic growth and look at
ways to sort of grow some of their newer brands
like Spark, which they've been talking about. And the most
interesting thing related to that is it seems like they're
looking outside the US for growth opportunities, and maybe that's
a function of the fact that they while they think
(23:28):
the US is still having decent momentum, perhaps they need
to sort of look outside to sort of really see
the growth.
Speaker 8 (23:35):
Where are they finding that growth elsewhere? And is that
in relation to just the lower consumer confidence in the
US and the decline of international travelers. So then they
just decided maybe looking elsewhere US better. What was the
rationale behind that?
Speaker 9 (23:48):
So they actually talked about on the first quarter, they
talked about Canada and Mexico, demand and they said specifically
that it's such a small percentage, just like one percent
of their total revenues is Canada MC, and inbound US
is certainly a large portion, I think, larger than they
sort of indicate. But I think they're also sort of saying, Okay, yeah,
it's going to be an effect, but it's not that
(24:09):
much effect. I think they are seeing. And what we
sort of heard on this most recent call is that
there is an element of trickle down effect related to
what's going on in the US, the prevalence of travelers
coming into the US versus historically because of the tariff
and geopolitical environment, and so, you know, they mentioned Saudi Arabia,
(24:32):
they mentioned India, they mentioned turkeya on the call, and
I think they're looking at anywhere there's potential growth opportunities.
I mean, Hilton's so large and global that it's not
really surprising to me, but it is sort of interesting
when you hear a company that's seventy five percent US
dominant that they are sort of looking to expand elsewhere.
Speaker 2 (24:52):
Our thanks to Jody Lourie Bloomberg Intelligence Credit Analyison coming up.
Speaker 5 (24:55):
Well, look at how Elon Musk's recent political antics may
be affecting his business empire.
Speaker 2 (25:00):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies and one
hundred and thirty industries.
Speaker 5 (25:06):
You can access Bloomberg Intelligence via bi go on the terminal.
Speaker 2 (25:09):
I'm Lisa Mattheo and I'm Paul Sweeney. This is Bloomberg.
Speaker 1 (25:21):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple Corplay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube
through on.
Speaker 5 (25:35):
Paul Street and I'm Lisa Matteo filling in on Bloomberg Intelligence.
Speaker 2 (25:38):
Next, return to the auto sector.
Speaker 5 (25:40):
This week, General Motors will lease second quarter earnings that
beat analysts expectations, but the carmaker said it still suffered
a one point one billion dollar profit hit from President
Donald Trump's tariffs.
Speaker 2 (25:50):
GM also revealed no plan for near term fixed to
return to pre tariff profit levels. For more, Lisa and
I were joined by David Welsh, Bloomberg News Detroit Buro chief.
Speaker 5 (25:59):
First as David was he surprised by the one point
one billion dollar tariff hit.
Speaker 10 (26:04):
Not surprised at all. GM said they were going to
take a fort to five billion dollar hit, or at
least that they had forty five billion dollars in exposure
this year to tariffs, and then they would only be
able to offset about thirty percent of it, and the
measures they're using to offset that you really won't see
to the second half. I thought there would be a
pretty big hit to it. I don't think the street
(26:25):
was surprised either, because the forecast for GM's earnings were
for a pretty big drop off of the second quarter
of last year. Already, GM did better than that because
they did have some things, better profits in China than
we saw a year ago and better sales in the
US that helped them. But overall, a pretty tough quarter,
and it really shows that the car companies are going
(26:46):
to have a tough time getting anything close to pre
tariff profits going forward because there's just no easy way
to get around them.
Speaker 2 (26:54):
So I mean is what were to take away from
them is that the autom manufacturers, for what reason, maybe
they're just not able to or they chose not to
pass along the bulk of their cost increases to consumers
is at a policy or is that just an economic reality?
Speaker 10 (27:10):
It's an economic reality. And look, we're at a period
right now where interest rates are at pretty high levels.
You have historically not record but pretty close to record
new vehicle prices in the US right now, average monthly
payment well over seven hundred dollars a month. We have
a record number of people I think paying more than
one thousand dollars a month for their monthly payment. Cars
are expensive, so you know, you can go out there
(27:32):
and say, hey, I'm going to pass this tariff cost
on to consumers or even some of it. But if
consumers don't pay it, then you just lose the sales.
And you haven't seen huge price increases. You've seen small
and you seen companies sneak in, you know, some bigger
fees for transporting the vehicle for example, things like that.
But it's just not they just don't really have the
(27:54):
ability to push in big price increases to you know,
to pass on. In GM's case, a billion hours worth
of tariffs in a quarter.
Speaker 5 (28:02):
And it's not just terrors. What else affected profits for GM?
I mean, how's their inventory for electric vehicles?
Speaker 10 (28:08):
They built that up in the quarter and since the
vehicles lose money, they have to count for that that
that costs them. I think it was six hundred million
dollars in the quarter they had three hundred million. Because
they've had a big engine recalls, they've had higher warranty costs.
It wasn't just because of that recall. They've had other
issues and they're working on that. Some of it, some
of these quality issues you're seeing that are costing companies
(28:30):
more in warranty and recall type costs, are all the
software that goes into electric vehicles. These are kind of
first times out with new software, new infotainment systems, power
management systems in these vehicles, and it's just tough for
them to go out there and not be buggy.
Speaker 6 (28:49):
Right.
Speaker 10 (28:49):
You know, think about how many times there's something on
your smartphone that you know needs an update, and fixing
that with the cars is often more expensive. So some
of it was related to that. And actually, you know,
they saw pricing go down with some of their fleet customers.
There's a lot of competition out there for the for
the corporate and fleet business, and they actually saw some
(29:11):
downward price pressure there too, and that cost them a
couple one hundred million dollars. So a lot of things
in the quarter that pushed profits down, But tariffs are
the real story here, David.
Speaker 2 (29:21):
You're out there in Detroit. You live and breathe this
stuff every day. What's the feeling in Detroit as he
relates to this evolution to evs and how will the
tariff and the tariff impact on profitability? Is that going
to slow this down even more?
Speaker 4 (29:36):
Do you think?
Speaker 6 (29:38):
I do?
Speaker 10 (29:39):
I think everything that Trump administration is doing is really
going to slow the EV transition. First of all, you know,
the obvious one is there, comes September, they're going to
be getting rid of the seventy five hundred dollars tax
break for qualifying electric vehicles. But you know, with tariffs,
you've got battery components, electronic components, wiring harnesses. There's more
(30:00):
wiring in an EV than in a conventional vehicle. All
that stuff adds to the cost of vehicles that already
lose money. Some of them are actually built overseas. In
the case of Hyundai, they make some of theirs overseas.
GM makes a couple of it's evs in Mexico. They
do qualify for US MCA, but there are still some
parts component tariffs that they can be hit with on
(30:23):
some of these vehicles, and so you add cost to
vehicles that are already pretty expensive, and you can't pass
it on. If you do, even fewer people will buy them.
Companies may have less incentive to build and sell them
if they lose a bit more money on these, So
that's going to hurt as well. And then of course
Trump's rhetoric for people who are you know, politically right
(30:45):
of center and pretty far right is that you know,
evs are a dumb purchase and they don't work for you,
and I think that hurts sales as well. So all
of this is just not good for the momentum that
EV's had in the US, you know, before Trump got
in office.
Speaker 5 (31:01):
Yeah, so, David, last month the company said it would
shift some production to the US from Mexico. So what
other changes can we expect to see from the company.
Speaker 10 (31:09):
Yeah, I think you'll see them try to bring more parts,
more of the parts they buy into the US, so
they'll be encouraging their suppliers to do what they're doing,
which is move some production to the United States. And
that'll take time, and you know, you may see them
make some more production related moves. What they've done is
pretty big, so I'm not anticipating any big announcements. But
(31:30):
you know, as they look at this and they find
other ways to do it, you might see more vehicles,
more parts built.
Speaker 5 (31:34):
Here in the US our thanks to David Well, It's
Bloomberg News Detroit Bureau Chief.
Speaker 2 (31:39):
This week we focused on a Bloomberg Big Takes story
entitled Elon musk Empire is Creaking under the Strains of
His Antics. You can find it on Bloomberg dot Com
and The Terminal.
Speaker 5 (31:49):
The story looks at the state of Elon Musk's companies Tesla, SpaceX,
and Xai, and it gives insight into how much Elon
Musk's recent political antics are affecting his empire.
Speaker 2 (31:59):
For more, Lisa I were joined by one of the
stories co authors, Max Chafkin, Bloomberg BusinessWeek senior reporter and
co host of the Elon Inc. Podcast.
Speaker 5 (32:07):
We first asked Max if Elon musk political antics are
impacting his business empire.
Speaker 11 (32:12):
I mean absolutely, and it's because as much as Tesla
is a car company, it is I think for many
investors really an Elon Musk company. It's a way to
bet on what they see as the singular genius of
this guy. And as you said, over the last few years,
it's gotten harder to see that there have been challenges,
(32:34):
and I think obviously the biggest challenges is this relationship
with Donald Trump, where you had, you know, in December,
Elon Musk, you know, helps get Trump elected and then
is in this position of extreme influence, you know, probably
more influence than almost any you know, executive ever and
and you had this kind of Trump trade where people
were bidding up the stock based on the idea that
(32:56):
Elon Musk was going to be able to get all
of these policies that were going to help his company.
His companies of course very very much enmeshed with the
government and heavily regulated. And then we're seeing that in reverse,
we're seeing that, you know, what happens when you get
when you have a business and a bunch of businesses
in fact, that are heavily regulated, and you're in a
fight with you know, the most powerful person in the world.
(33:17):
And Donald Trump.
Speaker 5 (33:18):
You say in the article that really stood out to me,
you say, he is rich on paper, but he is
cash poor. So kind of explain that to us.
Speaker 11 (33:25):
Stick into that, Yeah, I mean part of this has
to do with the fact that he's he's always making
these big bets. But when you look at his wealth,
it is mostly in Tesla's stock, Tesla stock and options,
and he's running this empire which you know obviously includes Tesla,
it also includes SpaceX. He's got a lot of SpaceX
stock as well. You know, neither of those companies. He's
(33:47):
able to borrow money against his positions in these companies,
and we have seen sort of company A buy equity
and company B that sort of thing.
Speaker 2 (33:57):
But there isn't just like a huge.
Speaker 11 (33:59):
Pile of cash and he has all these things he's
trying to do. You know, you there's there's really only
one company in the portfolio that is reliably profitable, and
that's Tesla. And then you have SpaceX, which of course
has a lot of promise and has a dominant position
in the launch market, but is not necessarily throwing off cash.
And so you have this empire that is very large,
(34:20):
but where different companies are supplying things to other Elon
Musk companies. And I'd say the most obvious example of
that is this in this Xai investment round, which is
already at Elon Musk has already said SpaceX is putting
two billion dollars in. He's also indicated he's going to
try to get Tesla to put five billion dollars into Xai.
(34:40):
And this is a company that is burning, you know,
a billion dollars a month. Now, this is the kind
of thing that for any other executive, you know, it's
like a pie. It's like a conflict of interest on
top of a conflict of interest. On the other hand,
you know, Elon Musk has this fan base that has
so far been willing to kind of go along with
things that no other investment in, any other company, whatever,
(35:01):
go along with.
Speaker 2 (35:02):
Is there any reason to believe that the few, to
whatever degree it is at the moment, between President Trump
and Elon will de escalate.
Speaker 11 (35:11):
Yeah, I mean, I definitely think that's possible, partly because
both Trump and Musk, you know, obviously they're both famously
kind of alpha, you know, very tough, but they also
both you know, they they forgive like this. People have
made this observation about Donald Trump that you know, although
there are there are a handful of people that are
sort of permanently outside of the circle of trust with Trump.
(35:34):
People fall in and out of love with Donald Trump,
and he is able to kind of look past FEUs.
Elon Musk is the same way, And there is a
mutual interest here. As I said, you know, Trump kind
of needs Musk because Musk was the most important financial
backer for Republicans during the twenty twenty four cycle. He
could very well be the most important backer in the
twenty twenty six cycle. And I'd say that Musk kind
(35:57):
of needs Trump, both from a branding perspective, from the
fact that, like, once you've alienated the entire universe of
Democratic voters, which must kind of has done, then what
do you have left? You have basically the Republicans, and
you don't really want to be on the outs with
Donald Trump as a cultural force. And then and then
on top of that, you have the sort of regulatory issues.
(36:19):
You know, self driving, which is what Tesla is betting
its future on, is a regulated industry, you know, rockets
government contractors. So there are always ways that Donald Trump
could either hurt or help Elon Musk, depending on what
the relationship looks like in.
Speaker 5 (36:32):
The last minute. So we have left it seems like
someone else is kind of sliding into that position. Open
Ay Sam Altman is he kind of taken over where
Musk left the spot.
Speaker 11 (36:42):
I mean incredible, right, like watching that happen, especially given
the fact that Sam Altman, you know, former Democrat course
Elon Musk at times has supported Democrats as well, but
Sam Altman much more recently was a Trump critic and
so on, and that is, you know, there there have
been a bunch of political sort of mistakes, missteps made
by Elon Musk, and that is you'd have to include
(37:04):
that in the list, just because Sam Almons certainly didn't
have the pole position. And now open Ai this you know,
AI large language model company competing with Xai is in
a position of proximity to the president and and so yeah,
that's that's yet another case where where this feud is
not helping Elon Musk.
Speaker 5 (37:22):
Our thanks to Max Chafkin, Bloomberg BusinessWeek Senior reporter and
co host of the Elon Inc.
Speaker 2 (37:26):
Podcast.
Speaker 1 (37:28):
This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each
weekday ten am to noon Eastern on Bloomberg dot Com,
the iHeartRadio app, tune In, and the Bloomberg Business App.
You can also watch us live every weekday on YouTube
and always on the Bloomberg Terminal
Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Intelligence
with Paul Sweeney.
Speaker 2 (00:13):
The real app performance has been the US corporate high yield.
These are two big time blue chip companies. One person's
cast is another person's animal spirits.
Speaker 1 (00:22):
Breaking market headlines and corporate news from across the globe.
Speaker 3 (00:26):
Our viewer is if the economy is slowing.
Speaker 2 (00:28):
Down, there is the possibility of the debt spirals.
Speaker 4 (00:30):
Both tutum competing and AI are going to power the future.
Speaker 1 (00:33):
People are just buying everything with tex Bloomberg Intelligence with
Paul Sweeney on Bloomberg Radio, YouTube and Bloomberg Originals.
Speaker 5 (00:42):
I'm Paul Sweeney and I'm Lis Matteo filling in on
Bloomberg Intelligence.
Speaker 2 (00:45):
On Today's Bloomberg Intelligence Show, we dig inside the big
business stories impacting Wall Street and the global markets. Each
and every week, we provide in depth research and data
on some of the two thousand companies and one hundred
and thirty industries our analysts covered worldwide. Today, we'll look
at why the toymaker has broken is raising its full
year outlook.
Speaker 5 (01:02):
Plus we'll look at how General Motors is being impacted
by President Donald Trump's tariffs.
Speaker 2 (01:06):
But First, let's begin with the tech sector.
Speaker 5 (01:08):
This week, tech giant Alphabet reported second quarter earnings that
beat analyst expectations. Alphabet said demand for artificial intelligence products
boosted quarterly sales and now requires an extreme increase in
capital spending for more.
Speaker 2 (01:21):
Lisa and I were joined by Mandep Singh, Bloomberg Intelligence
senior tech industry analyst.
Speaker 5 (01:25):
We first asked man Deep for his take on Alphabet's
most recent earnings.
Speaker 6 (01:29):
The fact that they are able to grow their search
business double digit at that kind of run rate two
hundred ten billion dollar plus. Like, think of how many
incremental dollars they added just by virtue of that eleven
percent growth in the two hundred ten billion dollar business.
And that is where you know the real strength lies
(01:53):
with a company like Alphabet. They are overlaying Gemini across
their family apps. AI overviews is actually driving ten percent
more queries and AI Overviews is now used by two
billion monthly active users. So Google Search has five billion
monthly active users. Imagine AI overviews being used by two
(02:15):
billion monthly active users. So they got the UI part right.
Gemini as a standalone app has got four hundred and
fifty million monthly active users. Imagine if everyone started paying
a twenty dollars subscription like chatchipt, this could become one
hundred billion dollar business. In addition to search and then YouTube,
I'm not even talking about you know, I'll talk about
(02:39):
all the strengthen YouTube and way more. So this is
a powerhouse when it comes to four hundred billion dollar
run rate they will be at the end of the year.
Speaker 5 (02:47):
So can you explain something to me, Because when the
shares dropped because they said capex was a little bit more,
well ten billion dollars more than expected a little bit,
how is that different for an alphabet versus metaphor to
say that?
Speaker 6 (03:01):
So that's great. So look, let's frame the capex eighty
five billion dollars at potentially a four hundred billion dollar
revenue run rate by the end of the year. That's
like a twenty five percent capex intensity. Meta, on the
other hand, is already at a forty percent capex intensity
because their CAPEX will be seventy billion at a undred
(03:21):
of close to two hundred billion. So that just goes
to show Alphabet is still far lower than their peer
group when it comes to the capex intensity. I mean,
that's just the scale of the business that they are operating.
And look, I do think the ROI on their capex
is higher because Gemini's cost is much lower than all
(03:42):
the other large ANGLID models, including Microsoft, including Meta. They
do inferencing at a lower cost. And that's the advantage
of having your own chip, having your own large ANGLID
model that Microsoft or Meta don't have because they rely
on in video chips, whereas Google does most of their
inferencing from the TPU chip. So I think that just
(04:05):
vertical integration they have Alphabet has gives them such a
big cost advantage when it comes to running the AI infrastructure.
Speaker 2 (04:12):
Where's the company on the various regulatory issues outstanding? What
are the one or two or three ones that we've
really got to focus on in what's the market telling us?
Speaker 6 (04:21):
So that's the biggest risk with Alphabet. That has been
the biggest rag on their multiple and it remains because
we have a catalyst next month where Judge Meta is
going to make a decision on the remedies. And you know,
especially that Chrome split, that's still an overhang. Now the
base case is there won't be any Chrome divestiture, but
(04:42):
we still need to learn about what are the remedies
that may come about in terms of you know, proposed
by the judge, and that is where if they're asked
to you know, share search data or some other type
of remedy, that's going to hurt their position. I think
that is the big Overhay.
Speaker 2 (04:59):
This one could be this one. If you have a
firm view on that. You buy the stock here and
there's there's a ton in this thing. Are people doing that?
Are people making bets here?
Speaker 6 (05:09):
Think?
Speaker 2 (05:09):
I bet you they have to be.
Speaker 6 (05:11):
I mean, the narrative is still no netive, so negative.
Everyone is fixated on oh chat ChiPT my work.
Speaker 2 (05:18):
Bobby Action Rod on billions would somehow figure out where
this judge is going to rule, make a bet one
way or the other. You know, there's the Bobby Action
Rods of the world out.
Speaker 6 (05:27):
I agree. I think if you can figure out decisively
what the judges verdict is going to be, the multiple wise,
you could see easily a twenty five to thirty percent
multiple expansion and numbers will go up for sure after
print last night. But multiple expansion is like twenty five
to thirty percent. Just and when is that ruling that's
(05:47):
coming up in August September time frame to keep up with.
Speaker 5 (05:51):
These things to do.
Speaker 2 (05:52):
It's got like a huge team, global team behind him.
I mean all he does is come on radio, TV
and they give all the work. He's got everything everything.
Speaker 5 (06:03):
So you mentioned YouTube before Google Video site, how is
its advertising still going? Still going strong?
Speaker 6 (06:09):
So look, YouTube subscriptions is what it's really doing well
right now. So YouTube subscription growth is north of twenty percent. Imagine,
you know, Netflix growing sixteen seventeen percent, YouTube subscriptions actually
surpassing Netflix's growth. And then you layer ads on top
of that, which grew at a very healthy thirteen percent.
(06:30):
So ads is a forty billion dollar business. Subscriptions is
now close to you know, twenty billion dollars, and that
is where you're seeing, you know, combined cloud plus YouTube
arr is close to one hundred and fifteen billion. So
imagine when just these two segments growing at north of
twenty percent. I mean, it's it's just a phenomenal business
(06:53):
these to both cloud and YouTube and on a standalone basis,
there is so much runway for growing the to segment.
Speaker 2 (07:01):
Our thanks to Man Deep Seeing Bloomberg Intelligence senior tech
industry analyst.
Speaker 5 (07:05):
We moved next to consumer earnings. Earlier this week, Philip
Morris posted second quarter earnings that missed analysts expectations.
Speaker 2 (07:11):
The results were due to the company's Zen nicotine pouch
shipments accelerating less than expected. Separately, Coca Cola reported second
quarter earnings that beat analse expectations.
Speaker 5 (07:21):
And this came as a company announced it was launching
a new version of its coke product made with US
sugarcane this fall. President Donald Trump had urged a company
to do so.
Speaker 2 (07:29):
For more Lisa and I were joined by Ken Shay,
Bloomberg Intelligence Senior consumer products analyst.
Speaker 5 (07:34):
We first asked Ken to explain why Coca Cola is
making a switch to cane sugar and if pressure from
President Trump had an impact.
Speaker 3 (07:41):
It certainly is in sync with what Coca Cola has
been doing for a long time, and that is keeping
its post on what the consumer wants to do. It
has a lot of assets at his disposal, and a
cane sugar product is not novel to Coca Cola. I mean,
it's produced it in the US, largely more outside of US,
but in the US on a selected basis, So it's
(08:02):
really just going to expand that it may have been
prompted to a degree by the President's tweets or whatever,
but it's certainly in synct. Like I said, you know,
there's a there's an audience out there that prefers sugar
based as opposed to high fructose corn cruit based, full
calorie sodas, and they're going to play into that. Most likely,
(08:23):
it's going to be a brand Coke extension, and it's
going to be sell at a premium price in selected
markets to give it, uh an aura of exclusivity. I'm
guessing to to command those prices, and so just as
a little more excitement. It's it's one of many things
Coke is doing now on the innovation front.
Speaker 2 (08:41):
So from Coca Cola's economic perspective, do they care which
ingredient they use?
Speaker 3 (08:48):
Well, it depends, Paul, It depends if they can capture
the premium price they're going to, you know, price it
at kin share costs more than high fructose corns herup.
You know, a corn is a heavily, heavily subsidized crop
in the US. UH they built their supply chain around
HFCs because of that, and most consumers early, you know,
they don't really notice the difference. Some do but buy
(09:10):
and large. You know, they've grown that franchise very well.
But I guess you know some tourists that go to
Mexico and they taste the sugar cane sugar coke down
there and they say, you know what, this is really
good and they want to capture the same experience in
the US.
Speaker 2 (09:26):
I'm going to Chipotle and they do offer the Mexican
zoda there. Let me ask, let me shift gears here.
What is a zin patch?
Speaker 3 (09:36):
A zin patch? You want a patch?
Speaker 6 (09:38):
It?
Speaker 3 (09:38):
I think they made a pouch pouch, Zin pouch, a pouch.
You know, it's a it's an oral tobacco product. Actually,
zin isn't. It really doesn't even contain tobacco. It's a
synthetic products. It's lads with nicotine that is a facsimile
for tobacco, which a lot of people will say causes harm,
and a lot of people are right. So this is
(09:59):
a product that you know, people can get their nicotine
buzz in a you know, hands off kind of way,
doesn't emit smoke, doesn't offend your neighbor that you're working with. Uh,
and it's done really really well. So those are really
the Zin pouches that are doing really well. Yeah, yeah, I.
Speaker 2 (10:14):
Thought it was Zinfindel the wine. That's no kidding, no idea,
that pouch. So but I mean it's it's big enough
a business can that Philip mars would would call it out.
Speaker 3 (10:27):
Oh yeah, I know it in it's about eight percent
of the sales, I believe at this point, but it's growing,
you know, a twenty thirty percent rate as opposed to cigarettes,
which are flat, if not down. But you know, Icoas
is their smoke free device segment, which is doing very well.
But if the low large numbers at some point, that's
going to slow and Zen is filling the gap. They
(10:48):
keep the overall volumes in a positive trend. They price
these things very high. There's not a lot of competition
in this space. So you know, one of the things
investors would say about the world of tobacco, because it's
so consolidated, they can pass on a very high pricing
and that's what really drives a top line and you know,
the cash flows and so on, and Zen plays very,
(11:09):
very very well into that model.
Speaker 5 (11:11):
And how does it fair as far as we hear
about e cigarettes, vaping things like that, how has Philip
Marris been doing competing with this category.
Speaker 3 (11:20):
So they have a product called viv which is their
e vapor product as opposed to what they call Heat
not Burn, which has actual tobacco in it, and they
would say as a more appealing alternative for smokers who
are trying to quit. It's a lower margin product. It's
kind of seen by Philip Morris as a kind of
an entry level product for those who are trying to
(11:43):
move away from combustible cigarettes. They can turn to e
cigarettes a low cost method, and their hope is that,
you know, even though it's a low margin product, their
hope is that they can get that consumer maybe at
some point to trade up to their heat not Burn product,
which is, you know, a more profitable product for them.
Speaker 2 (12:04):
Our thanks to Ken Shay, Bloomberg Intelligence Senior Consumer Products analyst.
Speaker 5 (12:07):
Coming up, well look at why the hotel chain Hilton
lowered expectations for net income this year.
Speaker 2 (12:12):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies and one
hundred and thirty industries.
Speaker 5 (12:18):
You can access Bloomberg Intelligence via Big on the terminal.
I'm Lis Matteo and I'm Paul Sweeney.
Speaker 2 (12:24):
This is Bloomberg.
Speaker 1 (12:29):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple Corplay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 5 (12:43):
I'm Paul Sweeney and I'm Lis Mateo filling in on
Bloomberg Intelligence.
Speaker 2 (12:47):
We move next to the telecommunication space. This week, Verizon
Communications posted second quarter revenue that surpassed analyst estimates, and
the company raised this profit outlook.
Speaker 5 (12:56):
The results were fueled by wireless price increases and favorable
tax reform.
Speaker 2 (13:00):
For more at Least and I were joined by John Butler,
Bloomberg Intelligence senior telecom analysts.
Speaker 5 (13:04):
We first asked John, what's making the company so optimistic?
Speaker 7 (13:07):
When I look at Verizon, I think of the phrase
game of the inches, right. I think the improvements here
quartering and quarter out are incrementally better. They're edging towards
that acquisition of Frontier, which is really going to change
the game for them. But in the meantime, they put
(13:27):
a lot of changes in place in terms of their
go to market strategy, how they're combating promotions coming from
T Mobile and AT and T and on the margin
quarterin and quarter out, I just see them doing a
better and better job. I think all the actions they've
taken are starting to work, and so taking the long
(13:51):
view here, I really think Verizon is improving just quartering
and quarter out. And this was another quarter where you
could look at it in isolation and say, you know,
it was a solid quarter, a little bit mixed on
some of the metrics, but I think I'm balanced better
(14:11):
than last quarter and last year.
Speaker 2 (14:14):
John, what's kind of the positioning of Verizon in the marketplace? Like,
I've been a long time Verizon wireless customers since the
beginning of cillier service actually, and I guess I was
initially drawn to it because I thought they had the
best network. So quality, is that still the case because
it seems like T Mobile's gotten a lot better in
quality and AT and T. I don't know.
Speaker 7 (14:36):
Yeah, you know, Paul, you bring up a good point.
I think there's a question mark out there as to
whether Verizon still has the best network versus T Mobile
and AT and T. But I think they have a
slight edge they are in terms of coverage. And it's
interesting a lot of people ask me about wireless, who
was the best network? Who should I choose? And the
(14:59):
one thing that people are always ask about is how's
their coverage. I think coverage is very important to people,
and I think when you think on that metric. In
terms of that metric, for Riizon delivers the bars on
your smartphone, probably more than T Mobile and AT and
T in terms of download speeds, though I suspect that
(15:21):
T Mobile probably is gaining the edge here.
Speaker 5 (15:25):
Now, what about prices? Did Verizon increase their prices? If so,
did that help?
Speaker 6 (15:30):
So?
Speaker 7 (15:31):
We did see in all the carriers are increasing prices
right now as the market matures and new user growth
is slowing considerably. The only way you're going to grow
that important service revenue metric is by raising prices. They
tend to do it on older plans for riizing stunted
over the past six months. As if you look over
(15:54):
the past year, so as AT and T and T Mobile,
that's flowing through and it's helping to boost the service revenue.
I think over time they're adding in those little extras
like you know, device insurance and perks like you know,
added content that you can purchase at a discount through
(16:15):
through Verizon, and I think all that together is going
to continue to provide a lift to service revenue. It's
nothing special.
Speaker 6 (16:24):
Again.
Speaker 7 (16:25):
I'm looking forward to that Frontier acquisition where they're going
to buy, you know, access to two million Fiber broadband
subscribers and eight million fiber homes passed, because once they
get Frontier under the hood, they're going to be able
to bundle that wireless service with Fiber and I think
(16:46):
that's going to help to really drive renewed UH subscriber growth.
Speaker 2 (16:52):
Our thanks to John Butler, Bloomberg Intelligence Senior Telecom Analist.
Speaker 5 (16:55):
We move next to the toy industry.
Speaker 2 (16:57):
This week, the toy maker has But reported second quarter
earnings that beat analyst expectations.
Speaker 5 (17:01):
The company also said it's raising its full year outlook.
This comes after a record quarter for Hasbro's Magic the
Gathering card game.
Speaker 2 (17:08):
For more, co host Isabelle Lee and I were joined
by Lindsey Dutch, Bloomberg Intelligence Consumer Hardlines Senior Analyst. You
first asked Lindsay to break down what we learned from
Hasbro this week.
Speaker 4 (17:18):
Strong quarter are really a continuation from the first quarter
where all the strength is really coming from Magic the
Gathering Monopoly go and Hasbro's digital gaming business. What we
did not learn from the release is really about the
consumer and what the outlook is for toys in the
second half, and that's causing a lot of uncertainty what
(17:39):
that back half might look like.
Speaker 8 (17:42):
I was going to ask how exposed is Hasbro to
current consumers spending trends, Like, especially in the toys and
entertainment area, do we see more middle income shoppers buying
Hasbro or what kind of consumers are you seeing?
Speaker 4 (17:55):
Yeah, so the toy business typically grows with GDP. It
has been you know, coming down a bit challenge over
the past couple of years after the peak during COVID
when everyone was stuck at home buying a lot of toys.
This year was supposed to be a turnaround year four
toys and then early this year, you know, we got
hit with the tariff news, which created a lot of
uncertainty in the business. One is, you know, we don't
(18:19):
know how the consumer is going to react to broader
price increases, and we do expect increases on toys very specifically,
so companies like Hasbro and Mattel, you know what some
of the biggest toy makers in the globe you know,
are really faced with that challenge in second quarter. Normally
retailers already start buying their holiday inventory. That didn't happen
(18:42):
this year. Those retailers Walmart, Target, took a pause. So
normally by now we would sort of get a sense
of holiday But because of that pullback, you know, Hasbro
saw their consumer products segment see a sixteen percent decline
in the second quarter revenue because of that hold on
those orders.
Speaker 2 (19:00):
Thought they would have tried to front run the tariffs. Here,
what's the company saying about when they expect some of
these retailers to place their orders, so.
Speaker 4 (19:08):
They expect the orders to be sort of made up
in the third quarter. And the challenge with that is,
you know, some of those hotter toys that do sell
out maybe in the early holiday shopping season, there will
be very little time to sort of replenish on that end.
So Hasbro did continue their production, which you know they
do still make about fifty percent of their toy products
(19:29):
in China. They continued in May. You know, they took
some of that inventory on their books in the second quarter.
That's why we saw the inventory come up there. You know,
they're hoping that the retailers, you know, place more of
their orders in the third quarter, you know, ahead of holiday.
You know, the risk is they just don't really know
what those pre order will be and there will be
limited time for additional orders like in that fourth quarter
(19:54):
right before holiday.
Speaker 8 (19:56):
To your point. In April, the company warned the tires
clid impact profit by as much as sixty million two
hundred and eighty million this year, and they did reduce
their Chinese manufacturing output to less than forty percent, or
at least plan to by twenty twenty six. If they
do that, will they pass on the cost to consumers?
And do you think consumers will bear the brand of
that burden.
Speaker 4 (20:15):
Yes, so Hasbro is using multiple mitigation strategies. You know,
they have been very focused on cutting costs. You know,
prior to tariffs, they sort of accelerated some cost cutting
at the corporate level. They will be raising prices, I
think selectively on toys. They are also just going to
not sell certain toys in the US if it can't
(20:38):
it doesn't make financial sense to do so if they
can't raise the price and consumers would not buy it
at that price. So they're sort of using a mixed strategy.
They had predicted tariffs to cost sixty million to one
eighty million on an annual basis three months ago. They
sort of dropped that impact closer to the sixty million side.
(20:58):
That's because of lower rate on the Chinese imports. They
are working to diversify the supply chain, but that will
take time. The goal of less than forty percent that's
really by twenty twenty seven, So in terms of this year,
you know where their supply chain is. They're sort of
locked in with that at the moment, and they kind
of have to work with the price increases and sort
(21:19):
of balancing where do I increase price and not hurt
the demand even.
Speaker 5 (21:23):
More our thanks to Lindsay Dutch, Bloomberg Intelligence Consumer Hardline
Senior Analyst, we've.
Speaker 2 (21:28):
Moved next to the hospitality industry. This week. The hotel
chain Hilton Worldwide lowered expectations for net income for twenty
twenty five, while US hotel booking declined in the second quarter,
and this comes as.
Speaker 5 (21:39):
US travel demand has faced headwinds in recent months, including
lower consumer confidence and a decline in international visitors.
Speaker 2 (21:45):
For more co hosts, Isabelle Lee and I were joined
by Jody Lourie Bloomberg Intelligence credit analyst. We first asked
Jodie what we learned about Hilton from It's Ernie's call
this week.
Speaker 9 (21:54):
I mean, I think what's so interesting is they definitely
tried to provide an upbeat, optimistic view. The amount of
times they talked about the thawing that after the freeze
from tariffs was sort of interesting to hear, and I mean,
I think it fits a little bit with the conversation
that we've been having with clients is that what we've
been seeing in our data is twenty twenty five summer
(22:15):
should still be pretty strong, but I think as we
get into the latter part of the year and then
into next year, it's a little bit uncertain. And I
think they were trying to suggest that economic data is
positive for them and will provide for additional sort of demand,
but it's still a little bit, you know, it's still
(22:36):
a little bit hazy, at least for me. And I
mean more than anything, you know, they're so focused on
giving back to shareholders that and.
Speaker 2 (22:44):
There's a credit analyst that's not something.
Speaker 9 (22:46):
Necessarily that's yeah, yeah, you know, Hilton's one of those
companies that we say, if they wanted to be investment grade.
They probably could work to it yesterday and would have
been investment grade five years ago. But you know, from
a margin standpoint, they're so much stronger than of their peers.
But from a leverage standpoint, they just they're happy being
around three times three and a half times, and they've
(23:06):
indicated that they want to be a little bit higher
than where they currently are. So I mean, I think
they're going to invest in organic growth and look at
ways to sort of grow some of their newer brands
like Spark, which they've been talking about. And the most
interesting thing related to that is it seems like they're
looking outside the US for growth opportunities, and maybe that's
a function of the fact that they while they think
(23:28):
the US is still having decent momentum, perhaps they need
to sort of look outside to sort of really see
the growth.
Speaker 8 (23:35):
Where are they finding that growth elsewhere? And is that
in relation to just the lower consumer confidence in the
US and the decline of international travelers. So then they
just decided maybe looking elsewhere US better. What was the
rationale behind that?
Speaker 9 (23:48):
So they actually talked about on the first quarter, they
talked about Canada and Mexico, demand and they said specifically
that it's such a small percentage, just like one percent
of their total revenues is Canada MC, and inbound US
is certainly a large portion, I think, larger than they
sort of indicate. But I think they're also sort of saying, Okay, yeah,
it's going to be an effect, but it's not that
(24:09):
much effect. I think they are seeing. And what we
sort of heard on this most recent call is that
there is an element of trickle down effect related to
what's going on in the US, the prevalence of travelers
coming into the US versus historically because of the tariff
and geopolitical environment, and so, you know, they mentioned Saudi Arabia,
(24:32):
they mentioned India, they mentioned turkeya on the call, and
I think they're looking at anywhere there's potential growth opportunities.
I mean, Hilton's so large and global that it's not
really surprising to me, but it is sort of interesting
when you hear a company that's seventy five percent US
dominant that they are sort of looking to expand elsewhere.
Speaker 2 (24:52):
Our thanks to Jody Lourie Bloomberg Intelligence Credit Analyison coming up.
Speaker 5 (24:55):
Well, look at how Elon Musk's recent political antics may
be affecting his business empire.
Speaker 2 (25:00):
You're listening to Bloomberg Intelligence on Bloomberg Radio, providing in
depth research and data on two thousand companies and one
hundred and thirty industries.
Speaker 5 (25:06):
You can access Bloomberg Intelligence via bi go on the terminal.
Speaker 2 (25:09):
I'm Lisa Mattheo and I'm Paul Sweeney. This is Bloomberg.
Speaker 1 (25:21):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Apple Corplay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube
through on.
Speaker 5 (25:35):
Paul Street and I'm Lisa Matteo filling in on Bloomberg Intelligence.
Speaker 2 (25:38):
Next, return to the auto sector.
Speaker 5 (25:40):
This week, General Motors will lease second quarter earnings that
beat analysts expectations, but the carmaker said it still suffered
a one point one billion dollar profit hit from President
Donald Trump's tariffs.
Speaker 2 (25:50):
GM also revealed no plan for near term fixed to
return to pre tariff profit levels. For more, Lisa and
I were joined by David Welsh, Bloomberg News Detroit Buro chief.
Speaker 5 (25:59):
First as David was he surprised by the one point
one billion dollar tariff hit.
Speaker 10 (26:04):
Not surprised at all. GM said they were going to
take a fort to five billion dollar hit, or at
least that they had forty five billion dollars in exposure
this year to tariffs, and then they would only be
able to offset about thirty percent of it, and the
measures they're using to offset that you really won't see
to the second half. I thought there would be a
pretty big hit to it. I don't think the street
(26:25):
was surprised either, because the forecast for GM's earnings were
for a pretty big drop off of the second quarter
of last year. Already, GM did better than that because
they did have some things, better profits in China than
we saw a year ago and better sales in the
US that helped them. But overall, a pretty tough quarter,
and it really shows that the car companies are going
(26:46):
to have a tough time getting anything close to pre
tariff profits going forward because there's just no easy way
to get around them.
Speaker 2 (26:54):
So I mean is what were to take away from
them is that the autom manufacturers, for what reason, maybe
they're just not able to or they chose not to
pass along the bulk of their cost increases to consumers
is at a policy or is that just an economic reality?
Speaker 10 (27:10):
It's an economic reality. And look, we're at a period
right now where interest rates are at pretty high levels.
You have historically not record but pretty close to record
new vehicle prices in the US right now, average monthly
payment well over seven hundred dollars a month. We have
a record number of people I think paying more than
one thousand dollars a month for their monthly payment. Cars
are expensive, so you know, you can go out there
(27:32):
and say, hey, I'm going to pass this tariff cost
on to consumers or even some of it. But if
consumers don't pay it, then you just lose the sales.
And you haven't seen huge price increases. You've seen small
and you seen companies sneak in, you know, some bigger
fees for transporting the vehicle for example, things like that.
But it's just not they just don't really have the
(27:54):
ability to push in big price increases to you know,
to pass on. In GM's case, a billion hours worth
of tariffs in a quarter.
Speaker 5 (28:02):
And it's not just terrors. What else affected profits for GM?
I mean, how's their inventory for electric vehicles?
Speaker 10 (28:08):
They built that up in the quarter and since the
vehicles lose money, they have to count for that that
that costs them. I think it was six hundred million
dollars in the quarter they had three hundred million. Because
they've had a big engine recalls, they've had higher warranty costs.
It wasn't just because of that recall. They've had other
issues and they're working on that. Some of it, some
of these quality issues you're seeing that are costing companies
(28:30):
more in warranty and recall type costs, are all the
software that goes into electric vehicles. These are kind of
first times out with new software, new infotainment systems, power
management systems in these vehicles, and it's just tough for
them to go out there and not be buggy.
Speaker 6 (28:49):
Right.
Speaker 10 (28:49):
You know, think about how many times there's something on
your smartphone that you know needs an update, and fixing
that with the cars is often more expensive. So some
of it was related to that. And actually, you know,
they saw pricing go down with some of their fleet customers.
There's a lot of competition out there for the for
the corporate and fleet business, and they actually saw some
(29:11):
downward price pressure there too, and that cost them a
couple one hundred million dollars. So a lot of things
in the quarter that pushed profits down, But tariffs are
the real story here, David.
Speaker 2 (29:21):
You're out there in Detroit. You live and breathe this
stuff every day. What's the feeling in Detroit as he
relates to this evolution to evs and how will the
tariff and the tariff impact on profitability? Is that going
to slow this down even more?
Speaker 4 (29:36):
Do you think?
Speaker 6 (29:38):
I do?
Speaker 10 (29:39):
I think everything that Trump administration is doing is really
going to slow the EV transition. First of all, you know,
the obvious one is there, comes September, they're going to
be getting rid of the seventy five hundred dollars tax
break for qualifying electric vehicles. But you know, with tariffs,
you've got battery components, electronic components, wiring harnesses. There's more
(30:00):
wiring in an EV than in a conventional vehicle. All
that stuff adds to the cost of vehicles that already
lose money. Some of them are actually built overseas. In
the case of Hyundai, they make some of theirs overseas.
GM makes a couple of it's evs in Mexico. They
do qualify for US MCA, but there are still some
parts component tariffs that they can be hit with on
(30:23):
some of these vehicles, and so you add cost to
vehicles that are already pretty expensive, and you can't pass
it on. If you do, even fewer people will buy them.
Companies may have less incentive to build and sell them
if they lose a bit more money on these, So
that's going to hurt as well. And then of course
Trump's rhetoric for people who are you know, politically right
(30:45):
of center and pretty far right is that you know,
evs are a dumb purchase and they don't work for you,
and I think that hurts sales as well. So all
of this is just not good for the momentum that
EV's had in the US, you know, before Trump got
in office.
Speaker 5 (31:01):
Yeah, so, David, last month the company said it would
shift some production to the US from Mexico. So what
other changes can we expect to see from the company.
Speaker 10 (31:09):
Yeah, I think you'll see them try to bring more parts,
more of the parts they buy into the US, so
they'll be encouraging their suppliers to do what they're doing,
which is move some production to the United States. And
that'll take time, and you know, you may see them
make some more production related moves. What they've done is
pretty big, so I'm not anticipating any big announcements. But
(31:30):
you know, as they look at this and they find
other ways to do it, you might see more vehicles,
more parts built.
Speaker 5 (31:34):
Here in the US our thanks to David Well, It's
Bloomberg News Detroit Bureau Chief.
Speaker 2 (31:39):
This week we focused on a Bloomberg Big Takes story
entitled Elon musk Empire is Creaking under the Strains of
His Antics. You can find it on Bloomberg dot Com
and The Terminal.
Speaker 5 (31:49):
The story looks at the state of Elon Musk's companies Tesla, SpaceX,
and Xai, and it gives insight into how much Elon
Musk's recent political antics are affecting his empire.
Speaker 2 (31:59):
For more, Lisa I were joined by one of the
stories co authors, Max Chafkin, Bloomberg BusinessWeek senior reporter and
co host of the Elon Inc. Podcast.
Speaker 5 (32:07):
We first asked Max if Elon musk political antics are
impacting his business empire.
Speaker 11 (32:12):
I mean absolutely, and it's because as much as Tesla
is a car company, it is I think for many
investors really an Elon Musk company. It's a way to
bet on what they see as the singular genius of
this guy. And as you said, over the last few years,
it's gotten harder to see that there have been challenges,
(32:34):
and I think obviously the biggest challenges is this relationship
with Donald Trump, where you had, you know, in December,
Elon Musk, you know, helps get Trump elected and then
is in this position of extreme influence, you know, probably
more influence than almost any you know, executive ever and
and you had this kind of Trump trade where people
were bidding up the stock based on the idea that
(32:56):
Elon Musk was going to be able to get all
of these policies that were going to help his company.
His companies of course very very much enmeshed with the
government and heavily regulated. And then we're seeing that in reverse,
we're seeing that, you know, what happens when you get
when you have a business and a bunch of businesses
in fact, that are heavily regulated, and you're in a
fight with you know, the most powerful person in the world.
(33:17):
And Donald Trump.
Speaker 5 (33:18):
You say in the article that really stood out to me,
you say, he is rich on paper, but he is
cash poor. So kind of explain that to us.
Speaker 11 (33:25):
Stick into that, Yeah, I mean part of this has
to do with the fact that he's he's always making
these big bets. But when you look at his wealth,
it is mostly in Tesla's stock, Tesla stock and options,
and he's running this empire which you know obviously includes Tesla,
it also includes SpaceX. He's got a lot of SpaceX
stock as well. You know, neither of those companies. He's
(33:47):
able to borrow money against his positions in these companies,
and we have seen sort of company A buy equity
and company B that sort of thing.
Speaker 2 (33:57):
But there isn't just like a huge.
Speaker 11 (33:59):
Pile of cash and he has all these things he's
trying to do. You know, you there's there's really only
one company in the portfolio that is reliably profitable, and
that's Tesla. And then you have SpaceX, which of course
has a lot of promise and has a dominant position
in the launch market, but is not necessarily throwing off cash.
And so you have this empire that is very large,
(34:20):
but where different companies are supplying things to other Elon
Musk companies. And I'd say the most obvious example of
that is this in this Xai investment round, which is
already at Elon Musk has already said SpaceX is putting
two billion dollars in. He's also indicated he's going to
try to get Tesla to put five billion dollars into Xai.
(34:40):
And this is a company that is burning, you know,
a billion dollars a month. Now, this is the kind
of thing that for any other executive, you know, it's
like a pie. It's like a conflict of interest on
top of a conflict of interest. On the other hand,
you know, Elon Musk has this fan base that has
so far been willing to kind of go along with
things that no other investment in, any other company, whatever,
(35:01):
go along with.
Speaker 2 (35:02):
Is there any reason to believe that the few, to
whatever degree it is at the moment, between President Trump
and Elon will de escalate.
Speaker 11 (35:11):
Yeah, I mean, I definitely think that's possible, partly because
both Trump and Musk, you know, obviously they're both famously
kind of alpha, you know, very tough, but they also
both you know, they they forgive like this. People have
made this observation about Donald Trump that you know, although
there are there are a handful of people that are
sort of permanently outside of the circle of trust with Trump.
(35:34):
People fall in and out of love with Donald Trump,
and he is able to kind of look past FEUs.
Elon Musk is the same way, And there is a
mutual interest here. As I said, you know, Trump kind
of needs Musk because Musk was the most important financial
backer for Republicans during the twenty twenty four cycle. He
could very well be the most important backer in the
twenty twenty six cycle. And I'd say that Musk kind
(35:57):
of needs Trump, both from a branding perspective, from the
fact that, like, once you've alienated the entire universe of
Democratic voters, which must kind of has done, then what
do you have left? You have basically the Republicans, and
you don't really want to be on the outs with
Donald Trump as a cultural force. And then and then
on top of that, you have the sort of regulatory issues.
(36:19):
You know, self driving, which is what Tesla is betting
its future on, is a regulated industry, you know, rockets
government contractors. So there are always ways that Donald Trump
could either hurt or help Elon Musk, depending on what
the relationship looks like in.
Speaker 5 (36:32):
The last minute. So we have left it seems like
someone else is kind of sliding into that position. Open
Ay Sam Altman is he kind of taken over where
Musk left the spot.
Speaker 11 (36:42):
I mean incredible, right, like watching that happen, especially given
the fact that Sam Altman, you know, former Democrat course
Elon Musk at times has supported Democrats as well, but
Sam Altman much more recently was a Trump critic and
so on, and that is, you know, there there have
been a bunch of political sort of mistakes, missteps made
by Elon Musk, and that is you'd have to include
(37:04):
that in the list, just because Sam Almons certainly didn't
have the pole position. And now open Ai this you know,
AI large language model company competing with Xai is in
a position of proximity to the president and and so yeah,
that's that's yet another case where where this feud is
not helping Elon Musk.
Speaker 5 (37:22):
Our thanks to Max Chafkin, Bloomberg BusinessWeek Senior reporter and
co host of the Elon Inc.
Speaker 2 (37:26):
Podcast.
Speaker 1 (37:28):
This is the Bloomberg Intelligence Podcast, available on Apple, Spotify,
and anywhere else you get your podcasts. Listen live each
weekday ten am to noon Eastern on Bloomberg dot Com,
the iHeartRadio app, tune In, and the Bloomberg Business App.
You can also watch us live every weekday on YouTube
and always on the Bloomberg Terminal
Popular Podcasts
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Special Summer Offer: Exclusively on Apple Podcasts, try our Dateline Premium subscription completely free for one month! With Dateline Premium, you get every episode ad-free plus exclusive bonus content.
The Breakfast Club
The World's Most Dangerous Morning Show, The Breakfast Club, With DJ Envy, Jess Hilarious, And Charlamagne Tha God!
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.