July 17, 2025 • 20 mins
Watch Paul LIVE every day on YouTube: http://bit.ly/3vTiACF.
Bloomberg Intelligence hosted by Paul Sweeney and Lisa Mateo
Mandeep Singh, Bloomberg Intelligence Senior Tech Industry Analyst, discusses Uber teaming up with Lucid Group and Nuro to launch a robotaxi fleet, with plans to deploy at least 20,000 of the robotaxis over six years.
George Ferguson, Bloomberg Intelligence Senior Aerospace, Defense, & Airlines Analyst, discusses United Airlines earnings. United Airlines said the second half of the year has become more predictable and suggested it may be able to beat its earnings targets after customers resumed booking flights.
Kenneth Shea, Bloomberg Intelligence Senior Consumer Products Analyst, discusses PepsiCo earnings. International growth helped buoy PepsiCo Inc.’s second quarter earnings, as the snacks and beverage giant said it plans to lean into higher-protein offerings and smaller portion sizes.
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
Eastern on Apple, Cocklay and Android Auto with the Bloomberg
Business app. Listen on demand wherever you get your podcasts,
or watch us live on YouTube.
Speaker 2 (00:23):
LEAs Matteo and Paul Sweeney live here in the Bloomberg
Inaract the Broker Studio in Midtown Manhattan, streaming live on
YouTube as well.
Speaker 3 (00:30):
So I check us out there.
Speaker 2 (00:31):
You can search Bloomberg Live Radio all right. Uber is
partnering with Lucid neuro to launch robotaxis in twenty twenty six.
I'll do a ROBOTAXI I mean, I get into car
every morning with a dude I do not know, true,
and I trust him to get me from point.
Speaker 4 (00:48):
But there's someone behind the wheel.
Speaker 2 (00:49):
Yeah, but I don't know who this dude is. But
I mean, I don't know. There's like twenty seven thousand
censors on these things. It's I don't know, man deep
saying he knows he does this stuff. Senior tech industry
analis for Bloomberg Intelligence. What's Uber strategy for robotaxes? Because
you could argue that boy that would totally impact their
business model Uber if I don't need to share my
(01:11):
money with them.
Speaker 5 (01:12):
I mean Uber's strategy under this CEO, Dara Koshershahi, ever
since he has taken over, is to build scale when
it comes to both supply and that translates into adding
more services. So that's why they expanded on their delivery
side in such a big way. You know, they added
food delivery, grocery delivery. It was all.
Speaker 2 (01:33):
About drizzly which is the.
Speaker 5 (01:37):
Look. And now they're doing the same way the adonomous
vehicles supply. So they have a partnership with Weimo in
two cities, but then they are at the mercy of
either a Weimo or Tesla partnering with them. What they're
doing here is because they don't have their own av
efforts really doing this minority investment in Lucid that makes
(01:59):
about hoousand vehicles a year, Premium evs and also Neuro
which is software maker similar to Wevemo in terms of
you know, autonomous driving. They provide the actual technology and
sensors and software for the vehicle to drive itself on
its own. And it seems to be a sound strategy,
(02:21):
you know, just to hedge their bets. What if the
Weymo partnership doesn't pan out or get bigger as they
hope to be. And that's where you know, having this
investment does make a lot of sense.
Speaker 4 (02:33):
So how does this deal all work? I mean break
it down for it's certain like SUV Lucids, Like, how
does it?
Speaker 5 (02:39):
Yeah, I mean look Lucid, like I said, compare that
to Tesla making one point eight million cars a year.
Lucid makes ten thousand vehicles a year, so it's a
much smaller company in terms of the number of vehicles.
But at the same time, everyone who owns a Lucid,
they like the experience. It's one of that premium EV
(03:00):
cars that never took off. And that's why adding that
sensor technology for autonomous driving on top of Lucid does
make sense. Because Uber, like I said, it's all about
adding more supply. They want to cater to every segment,
premium segment who wants to use AVY vehicles as part
of their daily routine. And that's where you know they
(03:21):
are thinking long term, Okay, do we have AVY supply
for all types of segments and this could be something
that we have an investment in. And I think it's
not a big amount. It's not an outright acquisition that
they're making.
Speaker 4 (03:34):
Well, you know, Paul, they said the Lucid was the
car the Hamptons, Like, that's really now? Yes, yes, well you.
Speaker 2 (03:40):
Never know, very good. I'm not sure what the car
the Jersey sure is. It's the vestment you see me
cruising on.
Speaker 3 (03:45):
All right.
Speaker 2 (03:45):
The market cap of Uber Technologies one hundred and eighty
eight billion dollars, it's up fifty percent this year. What's
driving that?
Speaker 5 (03:53):
I mean remember the time when Lyft used to be
thirty percent of Uber. That has changed completely. Now Lift
is like three percent of Uber's market cap. So that's
where that scale strategy under the CEO has worked for them.
That really has been the key differentiator between Uber and Lyft.
And what explains that, you know, almost two hundred billion
(04:15):
dollars in market cap for Uber And look, I think
they're doing the right thing here by adding more scale,
because otherwise you run the risk of getting disintermediated, especially
at Tesla, which wants to go on its own. They
don't want to partner with anyone, all right.
Speaker 2 (04:30):
Darrek Kastoshahi, the CEO of Uber, he got his twenty
most recent year comp four point two million cash compensation,
thirty nine point eight million of non cash competition each
stock that stock since he got that is up twenty
three point eight million. So is current pay value for
that year sixty eight million dollars. This dude's worth every penny,
(04:50):
right the shareholders. I mean, I'll pay this guy whatever
he wants.
Speaker 5 (04:54):
Right, Well, his fartues have really turned around this year
up until twenty twenty four. This dot in do that well,
so really this year with Bill Ackman taking a steak
and you know about that. So there have been a
lot of catalysts that have played out in favor of Uber,
and like I said, Lift not performing because of their
lack of scale really validated Uber strategies. So I do
(05:18):
think he has had a good run. Yeah.
Speaker 4 (05:20):
Well, Paul makes fun of me because I only have
the Uber app, I don't have the list, and he
kalls me all the time. The quick thirty seconds that
we have here left ROBOTAXI fleets. We don't know where
this one is going to take off?
Speaker 6 (05:31):
Right?
Speaker 4 (05:31):
Can something like this work in New York City? Robotaxis?
Speaker 5 (05:35):
Well, Weimo is trying to get up permit here, So
in my mind, you know Uber wants to fill in
the gaps where they don't have a partnership with Wemo.
So right now, Uber has a partnership with Vemo only
in two cities, Austin and Atlanta, not in San Francisco,
Phoenix and other cities where Vemo operates in. So this
allows them to add more heavy vehicles than cities where
(05:56):
Vemo doesn't want to partner with Uber.
Speaker 2 (05:58):
Right, would you get in a heavy bit in a way?
Speaker 5 (06:00):
I have? Yes? I love the experience, really yes.
Speaker 2 (06:04):
So you get in the back, there's no budding in
the front and the car just goes.
Speaker 5 (06:08):
Yeah, I mean, and the car is reliable in the
city is where they all pray vingel now has one
hundred million miles driven mild So how much validation do
you need?
Speaker 2 (06:19):
You're right, all right, you sold me. I'll give it
a shot. I mean, I don't know. Maybe not in Manhattan, No.
Speaker 4 (06:24):
I saw I'm in San Francisco.
Speaker 3 (06:25):
I thought about it, but he didn't do it.
Speaker 2 (06:29):
But right, Mendy, thank you so much. Always always are
great talks, Mendeep seeing senior tech analysts, you know, driverless
card dude who knew that.
Speaker 1 (06:39):
You're listening to the Bloomberg Intelligence Podcast. Catch us Live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 4 (06:53):
Donlease Matteo alongside Paul Sweeney. United Airlines right they narrow
it narrowed its profit range for the first for the
of the year, but they do expect travel demand to
continue to rise. Now. Earlier this morning, CEO Scott Kirby
he sat down with Bloomberg's Lisa Brahmins and they talked
about United's earnings and also their outlook for the rest
of twenty twenty five.
Speaker 7 (07:12):
This year, a lot of uncertainty in the first half
of the year at macro uncertainty and that led to
an impact on bookings and demand at United across the
whole industry. But it felt like there was a turning
point at the end of June where the tax bill
passed and the situation in the Middle East was calmer
and tariffs, while not certain, yet narrowing the range, and
(07:36):
it really felt like people felt enough confidence or lower
level of uncertainty that they kind of came off the
sidelines and were unfrozen.
Speaker 4 (07:44):
All right, that was United CEO Scott Kirby. Let's bring
in the expert on all this, George Ferguson's Bloomber Intelligence
senior Aerospace, Defense and airlines analysts. George, thanks for joining us,
Scott Kirby. He seemed pretty confident, did he?
Speaker 3 (07:58):
He does? But I guess he always sounds confident, right.
I think he's counting on some capacity cuts here in
the second half, and he talked about some of the
uncertainty going away, So I think it's a it'll get
better story. But yeah, too, c for him and for
Delta didn't look that great.
Speaker 2 (08:17):
George, where's business travel today?
Speaker 3 (08:22):
I'd like to tell you what the airlines try to
hide that, but you know, everything we can parse out
of sort of Delta and United earnings makes it sound
like it's lagging the leisure rebound and maybe back to
twenty nineteen levels, But that would again sort of still
be lagging. And so the sense I get is that
(08:43):
it hasn't come back as strongly as leisure, and these
airlines are more pointing to high end leisure as the
driver of their profitability.
Speaker 4 (08:53):
George, I have to point out Newark Airport because I'm
a frequent visitor. There are a lot of issues there
right construction new there were outages, delays. When they asked,
you know, Scott Kirby about it, he said he was
kind of you know, optimistic about it, but he also
pointed out JFK would love to get in there. Has
this been kind of a sticking point for United.
Speaker 3 (09:14):
Newark for sure, right because Newark they've got a strong
concentration of flights out of there. You know, he started
the call too today. You know, I get the sign
on for the first couple of minutes of it before
joining you, and you know, he was sort of alluding what
was going on at Newark Airport, and so you know,
I think it's I think we're starting to put behind
(09:37):
us the FAA problems. But Newark is always a challenging airport.
It has a lot of activity. You know, he said,
the FAA and the constituents there have gotten real about
the amount of throughput they could put around Newark. That
would be good because essentially Newark suffers from a whole
lot of throughput that's trying to get through that airport.
And then you get in the middle of summer and
(09:58):
you just have these weather events storms which we've been
having I think every day now in New Jersey, which
sort of royal the whole deal. So he sounded optimistic
that they've got a lot of the fix in place
for the airport.
Speaker 2 (10:13):
George Ware, are we on air traffic controllers? I mean, now,
hard can this be? To staff this whole system up here?
I just don't get it. What's the status?
Speaker 3 (10:23):
Yeah? So, I mean it just takes a long time
to train in air traffic control, longer than I would
have expected. I mean, the last numbers I've heard were
sort of over over a year. I think I want
to say it was like a year and a half,
but I have to go back and check my numbers
exactly on that one. You know, during the pandemic, you know,
we had people that probably not too jazzed about entering
(10:43):
that business because it was one of those where you
couldn't work from home. I think that worked from home
world is fading a bit now, But back again, during
the pandemic, it didn't seem that exciting. And I think
it has the problem that every other industry America, especially
the older industries, have, and that is there's a bunch
of baby boomers inside it. They're approaching retirement and actively
(11:08):
retiring at this point. And the backfill, again, it's not
the most exciting industry, I guess to go into. The
backfill has been harder. Recruitment has been harder, and when
you get behind them, recruitment and training takes a certain
amount of time. It takes a while to fill. And
so we're still in that attempt to refill phase again.
(11:28):
I think it's getting better as the economy maybe as
some of the labor market is not as white hot
as it was coming out of the pandemic, but we're
still behind the curve a bit, all right.
Speaker 4 (11:37):
So we heard from United, We've also heard from Delta.
You know, all the numbers, But for me, what does
it mean for airline fares? Am I gonna have to
pay more for a ticket coming up?
Speaker 3 (11:48):
You know? I think that there's going to be a
stabilization affairs here. But when we look at the second half,
we see capacity growth coming down. We still see capacity
growth though, and I think that we've seen it sort
of around GDP, and we kind of think that around
GDP levels of capacity growth doesn't firmfares and it doesn't
(12:12):
cut fares, and so I think you're you've seen some
cuts recently. I think you'll see this level of fair
going through the back half of the year and less
airlines cut more capacity, which would help them firmfares a
bit more. But again, we see growth that's right around
GDP growth, and so it doesn't look to me like
(12:33):
a scenario where you're going to see strong growth in
fares for the airlines.
Speaker 2 (12:37):
George can't let you go without talking about Boeing because
for me, it's just kind of my quintessential great American company,
great engineering company, great manufacturing company, Seattle, Washington, won great
parts of the of the United States where they with
their seven thirty seven deliverables, because you've told us time
and time again over the years that that's really a
(12:58):
key metric for this company.
Speaker 3 (13:00):
Yeah. So I think one of the great other American
companies gave us a little bit of insight this morning,
and that was GE. Right, and GE supplies the engines
to Boeing, and GE kind of guided down a bit
on margins for the back half of the year. Here,
I mean guided down like they're nice. Their commercial businesses
are like operating margins in the high twenties, right, which
(13:22):
is really super and they guided down to sort of
mid twenties. And that's a function of getting new engine
deliveries into Boeing engines for the triple seven engines for
seven thirty seven, Boeing has done a better job of delivering.
That's all about how they're going to win. And from
what I heard from Ge today, that's going to persist
through the back half of the of the year, which
(13:44):
is I think a strong positive for Boeing. Again, a
little bit of an EBB for Ge, but a strong
positive for Boeing.
Speaker 2 (13:51):
George, thanks so much, appreciate it as always. George Ferguson,
Senior Aerospace, Defense and Airlines analysts for Bloomberg Intelligence or
at least a big question for you, and this is
going to tell me a lot about how who you
are as a personal boy isle or window seat on
the plane.
Speaker 4 (14:04):
Oh i'le me too, yes, right, no, because I know,
but then if people have to get up and go
to the bathroom back and forth, that's kind of a pain.
Speaker 2 (14:10):
But yeah, it depends. Like if I'm on a short flight,
I'll go window because I like the flying into New
York is always cool because fifty percent chance you're going
to get the view of the city and all that
kind of stuff. Okay, but it depends where I'm flying.
I'm flying somewhere cool. Maybe I'll try the windness set,
but buying large. I'm an aisle person like that. You
need to get up and you know, take care of
(14:31):
business you could do.
Speaker 1 (14:34):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Applecarplay and Android Auto
with the Bloomberg Business app. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 4 (14:48):
This is Bloomberg Intelligence. I'm Lis Smith's Hayo alongside Paul Sweeney. PEPSI.
Their shares get a nice boot this morning. They're about
six percent international customers, a big part of their nice
earnings that just came out here with all the details,
KENNI say Bloomberg Intelligence senior Consumer Products analysts, Kenneth, thanks
for joining us. Positive results. This is pretty good for
(15:11):
them because it's the time when people are a little
bit more health conscience. Maybe you know, there's some negativity
around soda processed food, so this is pretty good news
for them.
Speaker 6 (15:19):
Yeah, hih, Lisa, Yeah, I would ascribed today's rally in PepsiCo, though,
where do a relief rally. You know, sentiment has been
pretty low on Pepsi since our last report in the
first quarter, they lowered their guidance. Wasn't really strong report.
This one, I think was a report of stabilization. Organic
growth was about up two percent in the quarter. Wasn't great,
(15:43):
you know, but it was above the one percent expectation.
Operating margins widen analysts love to see that, and I
guess the last piece of good news is they gave
a good sense of good innovation that's coming in the
fourth quarter and first quarter next year in the area
of protein drinks and as we know, everybody on GLP
(16:04):
one drugs these days are looking for protein supplements and
that really is an on trend innovation. I think people
are getting excited about.
Speaker 2 (16:11):
The can A lot of folks, including myself, have gone
to private label goods when shopping in the supermarket, trying
to you know, fight this inflation thing out there. Does
Pepsi with their brands, are they seeing that as a headwind, you.
Speaker 6 (16:29):
Know, Paul not really not in their big freeedola a franchise.
This is a you know, the eight hundred pound guerrilla
in a snack aisle. It continues to gain share, believe
it or not, at least on volumes. I think some
of the problem with free delay foods I should say
they're overall food they combined quicker with free to lay
last quarter is that I think consumers are a little
(16:52):
more price weary to your point, but so I think
they've held the line a little bit with with things
like you know, bundle old package sizes and things like that.
But you know, the company says it's really turning its
attention more to productivity and costs to get that business going.
In the second quarter, comparable profits were around thirteen percent
(17:15):
in that business is not great showing. So fortunately for them,
though in this quarter, the international area and Pepsi beverages
did pretty well and more than I'll set that weakness.
Speaker 5 (17:27):
Now.
Speaker 4 (17:27):
You were talking before about GLP one, So yes, people
going for the more protein like how you said, but
also wanting to eat smaller portions, and that's something that
Pepsi is changing with its snacks, right, making the packaging smaller.
Speaker 6 (17:41):
Is that correct, That's right, It's a trend. It's been
going for a while, and I think they were pleasantly
surprised as their competitors, Coca Cola and Carragure. When they
rolled out the mini cans years ago, there's let about
cry that you know, sugary drinks were adding too many calories,
so they came out with us smaller versions and kind
(18:01):
of like a portion control kind of thing. What they
probably underestimated was how much that contributed to price mixed
because obviously the unit prices are higher with those smaller cans,
and they've extended that same kind of concept to a
lot of their you know, snacks as well, whether it's
a Cheetos or feudal A and so on. To your point,
and a lot of the food package food items as well.
(18:24):
Smaller is also more convenient, so it also plays into
consumer trends for portability as much as it is for
calorie counts.
Speaker 2 (18:32):
I like the smaller cans of soda. That's perfect for me.
The twelve ounces was too much. These things are just
perfect for me, So kudos to all those folks. So
what I like about a lot of the names that
Ken Shake covers is their big, nice, juicy dividend payers.
I'm looking at Pepsi just about a three almost a
(18:54):
four percent dividend yield here Ken, how do your companies,
like the Pepsis of the world, how did they think
about their dividend policy.
Speaker 6 (19:02):
Well, they are very much committed to it. They know
that their shareholder base is very income oriented and so
and you know, it serves the company well to have
a policy like that. Buy and Lawrence is the dips
and you know, consumer spending goes up and down, you know,
depending on the whims of you know, economics. These are
(19:23):
businesses that are typically recession proof, cycle proof, and so
they take these steady cash flows and they do a
nice balancing act of reinvesting with innovation. They're always looking
for productivity improvements that bore fruit this quarter.
Speaker 4 (19:41):
Uh.
Speaker 6 (19:42):
And they take care of shareholders first two dividend and
then on a more selective basis, share buybacks. So they
have a lot of levers to pull to reward shareholders
with an income stream that predictable.
Speaker 2 (19:54):
Yeah, I mean, I'm looking at the comp function for
Pepsi in the last five years. Compound and any return
about six perc for the stock. But then you throw
in that four percent dividend, Neil, that's a ten percent return.
It's not a bad way to make a living. So
that's how I think a lot of people look at
those Staples stocks out there. Kenscha covers them all. He's
a senior Consumer Product Sannels for Bloomberg Intelligence. He's down
(20:15):
there in our Princeton office, although I'm guessing he's probably
working from home because that is a thing now for
a lot of folks.
Speaker 1 (20:22):
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Bloomberg Audio Studios, podcasts, radio news. You're listening to the
Bloomberg Intelligence Podcast. Catch us live weekdays at ten am
Eastern on Apple, Cocklay and Android Auto with the Bloomberg
Business app. Listen on demand wherever you get your podcasts,
or watch us live on YouTube.
Speaker 2 (00:23):
LEAs Matteo and Paul Sweeney live here in the Bloomberg
Inaract the Broker Studio in Midtown Manhattan, streaming live on
YouTube as well.
Speaker 3 (00:30):
So I check us out there.
Speaker 2 (00:31):
You can search Bloomberg Live Radio all right. Uber is
partnering with Lucid neuro to launch robotaxis in twenty twenty six.
I'll do a ROBOTAXI I mean, I get into car
every morning with a dude I do not know, true,
and I trust him to get me from point.
Speaker 4 (00:48):
But there's someone behind the wheel.
Speaker 2 (00:49):
Yeah, but I don't know who this dude is. But
I mean, I don't know. There's like twenty seven thousand
censors on these things. It's I don't know, man deep
saying he knows he does this stuff. Senior tech industry
analis for Bloomberg Intelligence. What's Uber strategy for robotaxes? Because
you could argue that boy that would totally impact their
business model Uber if I don't need to share my
(01:11):
money with them.
Speaker 5 (01:12):
I mean Uber's strategy under this CEO, Dara Koshershahi, ever
since he has taken over, is to build scale when
it comes to both supply and that translates into adding
more services. So that's why they expanded on their delivery
side in such a big way. You know, they added
food delivery, grocery delivery. It was all.
Speaker 2 (01:33):
About drizzly which is the.
Speaker 5 (01:37):
Look. And now they're doing the same way the adonomous
vehicles supply. So they have a partnership with Weimo in
two cities, but then they are at the mercy of
either a Weimo or Tesla partnering with them. What they're
doing here is because they don't have their own av
efforts really doing this minority investment in Lucid that makes
(01:59):
about hoousand vehicles a year, Premium evs and also Neuro
which is software maker similar to Wevemo in terms of
you know, autonomous driving. They provide the actual technology and
sensors and software for the vehicle to drive itself on
its own. And it seems to be a sound strategy,
(02:21):
you know, just to hedge their bets. What if the
Weymo partnership doesn't pan out or get bigger as they
hope to be. And that's where you know, having this
investment does make a lot of sense.
Speaker 4 (02:33):
So how does this deal all work? I mean break
it down for it's certain like SUV Lucids, Like, how
does it?
Speaker 5 (02:39):
Yeah, I mean look Lucid, like I said, compare that
to Tesla making one point eight million cars a year.
Lucid makes ten thousand vehicles a year, so it's a
much smaller company in terms of the number of vehicles.
But at the same time, everyone who owns a Lucid,
they like the experience. It's one of that premium EV
(03:00):
cars that never took off. And that's why adding that
sensor technology for autonomous driving on top of Lucid does
make sense. Because Uber, like I said, it's all about
adding more supply. They want to cater to every segment,
premium segment who wants to use AVY vehicles as part
of their daily routine. And that's where you know they
(03:21):
are thinking long term, Okay, do we have AVY supply
for all types of segments and this could be something
that we have an investment in. And I think it's
not a big amount. It's not an outright acquisition that
they're making.
Speaker 4 (03:34):
Well, you know, Paul, they said the Lucid was the
car the Hamptons, Like, that's really now? Yes, yes, well you.
Speaker 2 (03:40):
Never know, very good. I'm not sure what the car
the Jersey sure is. It's the vestment you see me
cruising on.
Speaker 3 (03:45):
All right.
Speaker 2 (03:45):
The market cap of Uber Technologies one hundred and eighty
eight billion dollars, it's up fifty percent this year. What's
driving that?
Speaker 5 (03:53):
I mean remember the time when Lyft used to be
thirty percent of Uber. That has changed completely. Now Lift
is like three percent of Uber's market cap. So that's
where that scale strategy under the CEO has worked for them.
That really has been the key differentiator between Uber and Lyft.
And what explains that, you know, almost two hundred billion
(04:15):
dollars in market cap for Uber And look, I think
they're doing the right thing here by adding more scale,
because otherwise you run the risk of getting disintermediated, especially
at Tesla, which wants to go on its own. They
don't want to partner with anyone, all right.
Speaker 2 (04:30):
Darrek Kastoshahi, the CEO of Uber, he got his twenty
most recent year comp four point two million cash compensation,
thirty nine point eight million of non cash competition each
stock that stock since he got that is up twenty
three point eight million. So is current pay value for
that year sixty eight million dollars. This dude's worth every penny,
(04:50):
right the shareholders. I mean, I'll pay this guy whatever
he wants.
Speaker 5 (04:54):
Right, Well, his fartues have really turned around this year
up until twenty twenty four. This dot in do that well,
so really this year with Bill Ackman taking a steak
and you know about that. So there have been a
lot of catalysts that have played out in favor of Uber,
and like I said, Lift not performing because of their
lack of scale really validated Uber strategies. So I do
(05:18):
think he has had a good run. Yeah.
Speaker 4 (05:20):
Well, Paul makes fun of me because I only have
the Uber app, I don't have the list, and he
kalls me all the time. The quick thirty seconds that
we have here left ROBOTAXI fleets. We don't know where
this one is going to take off?
Speaker 6 (05:31):
Right?
Speaker 4 (05:31):
Can something like this work in New York City? Robotaxis?
Speaker 5 (05:35):
Well, Weimo is trying to get up permit here, So
in my mind, you know Uber wants to fill in
the gaps where they don't have a partnership with Wemo.
So right now, Uber has a partnership with Vemo only
in two cities, Austin and Atlanta, not in San Francisco,
Phoenix and other cities where Vemo operates in. So this
allows them to add more heavy vehicles than cities where
(05:56):
Vemo doesn't want to partner with Uber.
Speaker 2 (05:58):
Right, would you get in a heavy bit in a way?
Speaker 5 (06:00):
I have? Yes? I love the experience, really yes.
Speaker 2 (06:04):
So you get in the back, there's no budding in
the front and the car just goes.
Speaker 5 (06:08):
Yeah, I mean, and the car is reliable in the
city is where they all pray vingel now has one
hundred million miles driven mild So how much validation do
you need?
Speaker 2 (06:19):
You're right, all right, you sold me. I'll give it
a shot. I mean, I don't know. Maybe not in Manhattan, No.
Speaker 4 (06:24):
I saw I'm in San Francisco.
Speaker 3 (06:25):
I thought about it, but he didn't do it.
Speaker 2 (06:29):
But right, Mendy, thank you so much. Always always are
great talks, Mendeep seeing senior tech analysts, you know, driverless
card dude who knew that.
Speaker 1 (06:39):
You're listening to the Bloomberg Intelligence Podcast. Catch us Live
weekdays at ten am Eastern on Apple, Cocklay and Android
Auto with the Bloomberg Business App. Listen on demand wherever
you get your podcasts, or watch us live on YouTube.
Speaker 4 (06:53):
Donlease Matteo alongside Paul Sweeney. United Airlines right they narrow
it narrowed its profit range for the first for the
of the year, but they do expect travel demand to
continue to rise. Now. Earlier this morning, CEO Scott Kirby
he sat down with Bloomberg's Lisa Brahmins and they talked
about United's earnings and also their outlook for the rest
of twenty twenty five.
Speaker 7 (07:12):
This year, a lot of uncertainty in the first half
of the year at macro uncertainty and that led to
an impact on bookings and demand at United across the
whole industry. But it felt like there was a turning
point at the end of June where the tax bill
passed and the situation in the Middle East was calmer
and tariffs, while not certain, yet narrowing the range, and
(07:36):
it really felt like people felt enough confidence or lower
level of uncertainty that they kind of came off the
sidelines and were unfrozen.
Speaker 4 (07:44):
All right, that was United CEO Scott Kirby. Let's bring
in the expert on all this, George Ferguson's Bloomber Intelligence
senior Aerospace, Defense and airlines analysts. George, thanks for joining us,
Scott Kirby. He seemed pretty confident, did he?
Speaker 3 (07:58):
He does? But I guess he always sounds confident, right.
I think he's counting on some capacity cuts here in
the second half, and he talked about some of the
uncertainty going away, So I think it's a it'll get
better story. But yeah, too, c for him and for
Delta didn't look that great.
Speaker 2 (08:17):
George, where's business travel today?
Speaker 3 (08:22):
I'd like to tell you what the airlines try to
hide that, but you know, everything we can parse out
of sort of Delta and United earnings makes it sound
like it's lagging the leisure rebound and maybe back to
twenty nineteen levels, But that would again sort of still
be lagging. And so the sense I get is that
(08:43):
it hasn't come back as strongly as leisure, and these
airlines are more pointing to high end leisure as the
driver of their profitability.
Speaker 4 (08:53):
George, I have to point out Newark Airport because I'm
a frequent visitor. There are a lot of issues there
right construction new there were outages, delays. When they asked,
you know, Scott Kirby about it, he said he was
kind of you know, optimistic about it, but he also
pointed out JFK would love to get in there. Has
this been kind of a sticking point for United.
Speaker 3 (09:14):
Newark for sure, right because Newark they've got a strong
concentration of flights out of there. You know, he started
the call too today. You know, I get the sign
on for the first couple of minutes of it before
joining you, and you know, he was sort of alluding what
was going on at Newark Airport, and so you know,
I think it's I think we're starting to put behind
(09:37):
us the FAA problems. But Newark is always a challenging airport.
It has a lot of activity. You know, he said,
the FAA and the constituents there have gotten real about
the amount of throughput they could put around Newark. That
would be good because essentially Newark suffers from a whole
lot of throughput that's trying to get through that airport.
And then you get in the middle of summer and
(09:58):
you just have these weather events storms which we've been
having I think every day now in New Jersey, which
sort of royal the whole deal. So he sounded optimistic
that they've got a lot of the fix in place
for the airport.
Speaker 2 (10:13):
George Ware, are we on air traffic controllers? I mean, now,
hard can this be? To staff this whole system up here?
I just don't get it. What's the status?
Speaker 3 (10:23):
Yeah? So, I mean it just takes a long time
to train in air traffic control, longer than I would
have expected. I mean, the last numbers I've heard were
sort of over over a year. I think I want
to say it was like a year and a half,
but I have to go back and check my numbers
exactly on that one. You know, during the pandemic, you know,
we had people that probably not too jazzed about entering
(10:43):
that business because it was one of those where you
couldn't work from home. I think that worked from home
world is fading a bit now, But back again, during
the pandemic, it didn't seem that exciting. And I think
it has the problem that every other industry America, especially
the older industries, have, and that is there's a bunch
of baby boomers inside it. They're approaching retirement and actively
(11:08):
retiring at this point. And the backfill, again, it's not
the most exciting industry, I guess to go into. The
backfill has been harder. Recruitment has been harder, and when
you get behind them, recruitment and training takes a certain
amount of time. It takes a while to fill. And
so we're still in that attempt to refill phase again.
(11:28):
I think it's getting better as the economy maybe as
some of the labor market is not as white hot
as it was coming out of the pandemic, but we're
still behind the curve a bit, all right.
Speaker 4 (11:37):
So we heard from United, We've also heard from Delta.
You know, all the numbers, But for me, what does
it mean for airline fares? Am I gonna have to
pay more for a ticket coming up?
Speaker 3 (11:48):
You know? I think that there's going to be a
stabilization affairs here. But when we look at the second half,
we see capacity growth coming down. We still see capacity
growth though, and I think that we've seen it sort
of around GDP, and we kind of think that around
GDP levels of capacity growth doesn't firmfares and it doesn't
(12:12):
cut fares, and so I think you're you've seen some
cuts recently. I think you'll see this level of fair
going through the back half of the year and less
airlines cut more capacity, which would help them firmfares a
bit more. But again, we see growth that's right around
GDP growth, and so it doesn't look to me like
(12:33):
a scenario where you're going to see strong growth in
fares for the airlines.
Speaker 2 (12:37):
George can't let you go without talking about Boeing because
for me, it's just kind of my quintessential great American company,
great engineering company, great manufacturing company, Seattle, Washington, won great
parts of the of the United States where they with
their seven thirty seven deliverables, because you've told us time
and time again over the years that that's really a
(12:58):
key metric for this company.
Speaker 3 (13:00):
Yeah. So I think one of the great other American
companies gave us a little bit of insight this morning,
and that was GE. Right, and GE supplies the engines
to Boeing, and GE kind of guided down a bit
on margins for the back half of the year. Here,
I mean guided down like they're nice. Their commercial businesses
are like operating margins in the high twenties, right, which
(13:22):
is really super and they guided down to sort of
mid twenties. And that's a function of getting new engine
deliveries into Boeing engines for the triple seven engines for
seven thirty seven, Boeing has done a better job of delivering.
That's all about how they're going to win. And from
what I heard from Ge today, that's going to persist
through the back half of the of the year, which
(13:44):
is I think a strong positive for Boeing. Again, a
little bit of an EBB for Ge, but a strong
positive for Boeing.
Speaker 2 (13:51):
George, thanks so much, appreciate it as always. George Ferguson,
Senior Aerospace, Defense and Airlines analysts for Bloomberg Intelligence or
at least a big question for you, and this is
going to tell me a lot about how who you
are as a personal boy isle or window seat on
the plane.
Speaker 4 (14:04):
Oh i'le me too, yes, right, no, because I know,
but then if people have to get up and go
to the bathroom back and forth, that's kind of a pain.
Speaker 2 (14:10):
But yeah, it depends. Like if I'm on a short flight,
I'll go window because I like the flying into New
York is always cool because fifty percent chance you're going
to get the view of the city and all that
kind of stuff. Okay, but it depends where I'm flying.
I'm flying somewhere cool. Maybe I'll try the windness set,
but buying large. I'm an aisle person like that. You
need to get up and you know, take care of
(14:31):
business you could do.
Speaker 1 (14:34):
You're listening to the Bloomberg Intelligence podcast. Catch us live
weekdays at ten am Eastern on Applecarplay and Android Auto
with the Bloomberg Business app. Listen on demand wherever you
get your podcasts, or watch us live on YouTube.
Speaker 4 (14:48):
This is Bloomberg Intelligence. I'm Lis Smith's Hayo alongside Paul Sweeney. PEPSI.
Their shares get a nice boot this morning. They're about
six percent international customers, a big part of their nice
earnings that just came out here with all the details,
KENNI say Bloomberg Intelligence senior Consumer Products analysts, Kenneth, thanks
for joining us. Positive results. This is pretty good for
(15:11):
them because it's the time when people are a little
bit more health conscience. Maybe you know, there's some negativity
around soda processed food, so this is pretty good news
for them.
Speaker 6 (15:19):
Yeah, hih, Lisa, Yeah, I would ascribed today's rally in PepsiCo, though,
where do a relief rally. You know, sentiment has been
pretty low on Pepsi since our last report in the
first quarter, they lowered their guidance. Wasn't really strong report.
This one, I think was a report of stabilization. Organic
growth was about up two percent in the quarter. Wasn't great,
(15:43):
you know, but it was above the one percent expectation.
Operating margins widen analysts love to see that, and I
guess the last piece of good news is they gave
a good sense of good innovation that's coming in the
fourth quarter and first quarter next year in the area
of protein drinks and as we know, everybody on GLP
(16:04):
one drugs these days are looking for protein supplements and
that really is an on trend innovation. I think people
are getting excited about.
Speaker 2 (16:11):
The can A lot of folks, including myself, have gone
to private label goods when shopping in the supermarket, trying
to you know, fight this inflation thing out there. Does
Pepsi with their brands, are they seeing that as a headwind, you.
Speaker 6 (16:29):
Know, Paul not really not in their big freeedola a franchise.
This is a you know, the eight hundred pound guerrilla
in a snack aisle. It continues to gain share, believe
it or not, at least on volumes. I think some
of the problem with free delay foods I should say
they're overall food they combined quicker with free to lay
last quarter is that I think consumers are a little
(16:52):
more price weary to your point, but so I think
they've held the line a little bit with with things
like you know, bundle old package sizes and things like that.
But you know, the company says it's really turning its
attention more to productivity and costs to get that business going.
In the second quarter, comparable profits were around thirteen percent
(17:15):
in that business is not great showing. So fortunately for them,
though in this quarter, the international area and Pepsi beverages
did pretty well and more than I'll set that weakness.
Speaker 5 (17:27):
Now.
Speaker 4 (17:27):
You were talking before about GLP one, So yes, people
going for the more protein like how you said, but
also wanting to eat smaller portions, and that's something that
Pepsi is changing with its snacks, right, making the packaging smaller.
Speaker 6 (17:41):
Is that correct, That's right, It's a trend. It's been
going for a while, and I think they were pleasantly
surprised as their competitors, Coca Cola and Carragure. When they
rolled out the mini cans years ago, there's let about
cry that you know, sugary drinks were adding too many calories,
so they came out with us smaller versions and kind
(18:01):
of like a portion control kind of thing. What they
probably underestimated was how much that contributed to price mixed
because obviously the unit prices are higher with those smaller cans,
and they've extended that same kind of concept to a
lot of their you know, snacks as well, whether it's
a Cheetos or feudal A and so on. To your point,
and a lot of the food package food items as well.
(18:24):
Smaller is also more convenient, so it also plays into
consumer trends for portability as much as it is for
calorie counts.
Speaker 2 (18:32):
I like the smaller cans of soda. That's perfect for me.
The twelve ounces was too much. These things are just
perfect for me, So kudos to all those folks. So
what I like about a lot of the names that
Ken Shake covers is their big, nice, juicy dividend payers.
I'm looking at Pepsi just about a three almost a
(18:54):
four percent dividend yield here Ken, how do your companies,
like the Pepsis of the world, how did they think
about their dividend policy.
Speaker 6 (19:02):
Well, they are very much committed to it. They know
that their shareholder base is very income oriented and so
and you know, it serves the company well to have
a policy like that. Buy and Lawrence is the dips
and you know, consumer spending goes up and down, you know,
depending on the whims of you know, economics. These are
(19:23):
businesses that are typically recession proof, cycle proof, and so
they take these steady cash flows and they do a
nice balancing act of reinvesting with innovation. They're always looking
for productivity improvements that bore fruit this quarter.
Speaker 4 (19:41):
Uh.
Speaker 6 (19:42):
And they take care of shareholders first two dividend and
then on a more selective basis, share buybacks. So they
have a lot of levers to pull to reward shareholders
with an income stream that predictable.
Speaker 2 (19:54):
Yeah, I mean, I'm looking at the comp function for
Pepsi in the last five years. Compound and any return
about six perc for the stock. But then you throw
in that four percent dividend, Neil, that's a ten percent return.
It's not a bad way to make a living. So
that's how I think a lot of people look at
those Staples stocks out there. Kenscha covers them all. He's
a senior Consumer Product Sannels for Bloomberg Intelligence. He's down
(20:15):
there in our Princeton office, although I'm guessing he's probably
working from home because that is a thing now for
a lot of folks.
Speaker 1 (20:22):
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weekday ten am to noon Eastern on Bloomberg dot com,
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