Tesla's Autopilot Draws Regulatory Scrutiny, Volkswagen Expects Supply Crisis To Continue, TikTok To Launch Standalone Gaming Channel: Top Stories Friday, Oct. 28

Wall Street Journal

Tesla’s Autopilot Draws Regulatory Ire From DoJ and SEC

  • Federal prosecutors and securities regulators investigated whether Tesla Inc TSLA misled consumers and investors about the performance of its advanced driver-assistance system.
  • The Justice Department scrutinized Tesla’s statements about the safety and functionality of the system known as Autopilot. The SEC conducted a similar civil investigation.
  • The U.S. auto-safety regulator and the California Department of Motor Vehicles also scrutinized Autopilot.


Financial Times

TikTok Is Bullish On Gaming Despite China Crackdown, To Launch Standalone Gaming Channel

  • ByteDance Ltd’s TikTok made a big push into gaming, adding a dedicated tab within the short-form video platform.
  • In the U.S., Netflix, Inc NFLX launched mobile games in 2021, filling a void left by Snap Inc SNAP Snapchat and Meta Platforms Inc META Facebook, which scrapped their gaming platforms.
  • Users can access the games via a button on the homepage. It will feature a host of mobile games with provision for ads, and users can pay for additional content.



Volkswagen Expects Supply Crisis, Higher Costs To Persist; Made Significant Investments In Mexico

  • Volkswagen AG VLKAF VWAGY expects the volatile parts supply situation and mounting pressure from rising raw material and energy costs to continue in the fourth quarter and beyond 2022 after stagnated earnings in the third quarter.
  • Volkswagen said it will invest $763.5 million between 2022 and 2025 at its complex in the central state of Puebla, to build a new paint plant and start production of a new gasoline-powered car.
  • Continental AG CTTAF CTTAY looked to invest around €210 million ($209.16 million) to open a new automotive electronics factory and expand capacity at an existing brake components plant in the central state of Guanajuato.
  • Continental said it expects to generate more than 1,500 new jobs over the next three years through the expansion.

American Airlines Pilot Poised To Receive 19% Pay Hike Over Two Years

  • American Airlines Group Inc AAL has offered to increase the pay for its pilot by 19% over two years in a new contract.
  • American pilots will get a 12% raise when the contract is signed, with another 5% hike after a year and another 2% after two years.
  • The latest proposal compares the company’s June offer to hike base pay by about 17% through 2024, which could cost the airline more than $2 billion.

National Institutes of Health’s Long COVID Initiative To Assess Pfizer’s Antiviral Pill As Potential Treatment

  • The National Institutes of Health’s $1 billion RECOVER Initiative has decided to study Pfizer Inc’s PFE antiviral drug Paxlovid as a potential treatment for long COVID.
  • According to details posted on Clinicaltrials.gov, the randomized, placebo-controlled trial will test Pfizer’s treatment or placebo in 1,700 adult volunteers.

Ford Ordered To Pay $105M To Versata Software For License Breach

  • Ford Motor Co F has been ordered to pay Versata Software Inc $104.6 million by a federal jury in Detroit for a license contract breach.
  • Ford was accused of a 2004 licensing contract breach and misappropriating trade secrets. The company was held liable after a fifteen-day trial.
  • Versata said it had licensed its automotive software to Ford from 1998 – 2015. Through the software, Ford’s engineers and marketing agents came together to design vehicles with “seamless real time updates” worldwide.



Amazon Plans To ‘Tighten Belt’ In Q4 With Hiring Freeze After Revenue Miss

  • Amazon.com Inc AMZN, which had a revenue miss in its third-quarter earnings, is preparing to tighten its belt in the fourth quarter.
  • The company’s CFO Brian Olsavsky said the company encountered “moderating sales” and saw foreign currency headwinds in the third period and expects these impacts to remain in place during the fourth quarter.
  • Olsavsky said, during the company’s earnings call, on Thursday, “As we’ve done at similar times in our history, we’re also taking actions to tighten our belt, including pausing hiring in certain businesses and winding down products and services where we believe our resources are better spent elsewhere.”

YouTube Rolls Out Dedicated Tab For Shorts To Make It Easy For Viewers To Filter Content

  • Alphabet Inc.’s GOOG GOOGL YouTube has rolled out separate tabs for Shorts, live streams, and long-form videos on all channel pages. 
  • On Thursday, YouTube said that based on “feedback”, it was “beginning to roll out separate tabs for Shorts, live streams, and long-form videos on all channel pages.”
  • As a result, Shorts won’t appear in the same tab as videos on channel pages.

Exxon Boosts Quarterly Dividend After Four-Fold Increase In Q3 Earnings

  • Exxon Mobil Corp XOM has posted a Q3 profit of $4.45 per share, a robust increase over $1.58 a year ago versus the consensus of $3.65. But the company’s revenue, at $112.07 billion, jumped 52% Y/Y, missing the $134.28 billion analysts were expecting.
  • The oil giant raised the quarterly by $0.03 to $0.91 per share, payable on December 9th. The company said the increase reflects confidence in its strategy, business performance, and financial strength.

Apple Defies Smartphone Market Slump In Q3 As Shipments Climb 8% YoY

  • Apple Inc AAPL was the lone smartphone vendor to register year-over-year growth in shipments in the third quarter, which suggests the iPhone revenue upside the company reported for the quarter was in part due to volume growth.
  • Cupertino-based Apple’s smartphone shipments rose 8% to 53 million units in the third quarter, according to a new report released by market research firm Canalys. 

Home Appliance Maker Electrolux To Cut Jobs As Demand Wanes

  • Swedish home appliance manufacturer Electrolux AB ELUXY has initiated a cost reduction plan and North American turnaround program in the wake of a demand slump.
  • The proposed plan is expected to affect 3,500 – 4,000 positions.
  • The company said it would take a restructuring charge of SEK 1.2 billion - SEK 1.5 billion in the final three months of 2022.

Justice Department Launches Probe Into Poultry Companies’ Payment Practices

  • The U.S. Justice Department has launched an investigation into the method of payments made to chicken farmers by poultry companies.
  • Pilgrim’s Pride Corp PPC disclosed in a regulatory filing that it learned on October 6, 2022, that DOJ opened a civil investigation into grower contracts and payment practices.
  • PPC said it would cooperate with the DOJ in its investigations.
  • The Justice Department has notified other poultry companies as well.

Chevron Clocks Over 80% Jump In Quarterly Earnings

  • Chevron Corp CVX posted a Q3 net profit of $11.2 billion, up 84% Y/Y, with an adjusted EPS of $5.56, better than the consensus of $4.91 and $2.96 posted a year earlier.
  • Sales in Q3 were $66.64 billion, compared to $44.71 billion in the year-ago period, surpassing the consensus of $59.17 billion.
  • Net oil-equivalent production was 3.03 million barrels per day, almost unchanged from Q3 FY21.

AbbVie Reports Mixed Earnings, Tightens Guidance, Lifts Quarterly Dividend

  • AbbVie Inc ABBV reported Q3 adjusted EPS of $3.66, up 29.3% Y/Y and beating the consensus of $3.59.
  • Overall sales increased 3.3% Y/Y (5.4% on an operational basis) to $14.81 billion, missing the consensus of $14.96 billion.
  • AbbVie increased the quarterly dividend by 5% from $1.41 per share to $1.48 per share.
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