>>> Advanced Micro reports EPS in-line, revs in-line; guides Q1 revs below conse

Advanced Micro reports EPS in-line, revs in-line; guides Q1 revs below consensus (172.06 -5.77)
  • Reports Q4 (Dec) earnings of $0.77 per share, excluding non-recurring items, in-line with the FactSet Consensus of $0.77; revenues rose 10.2% year/year to $6.17 bln vs the $6.13 bln FactSet Consensus.
    • Non-GAAP gross margins were flat yr/yr at 51%.
    • Data Center segment revenue in the quarter was $2.3 billion, up 38% year-over-year and 43% sequentially driven by strong growth in AMD Instinct GPUs and 4th Gen AMD EPYC CPUs.
    • Client segment revenue was $1.5 billion, up 62% year-over-year driven primarily by an increase in AMD Ryzen 7000 Series CPU sales.
    • Gaming segment revenue was $1.4 billion, down 17% year-over-year and 9% sequentially, due to a decrease in semi-custom revenue, partially offset by an increase in AMD Radeon GPU sales.
    • Embedded segment revenue was $1.1 billion, down 24% year-over-year and 15% sequentially primarily due to customers reducing their inventory levels.
  • Co issues downside guidance for Q1, sees Q1 revs of $5.1-5.7 bln vs. $5.73 bln FactSet Consensus.
    • Co expects Data Center segment revenue to be flat, with a seasonal decline in server sales offset by a strong Data Center GPU ramp. Client, Embedded and Gaming segment sales are expected to decline sequentially, with semi-custom revenue expected to decline by a significant double-digit percentage.
    • Non-GAAP gross margin is expected to be approximately 52%.

The Information : PayPal Begins Company Wide Layoffs

PayPal began company-wide layoff on Tuesday, the latest tech company to cut jobs, as a newly appointed CEO looks to cut costs and improve profits.

PayPal’s human resources team told staffers in a meeting of layoff plans, described as part of a cost-reduction effort, according to an employee who was in the meeting. The layoffs affected people across multiple teams, including engineering and research and development, according to LinkedIn posts from employees who were laid off.

The Takeaway
  • PayPal became the latest tech firm to lay people off on Thursday, as part of an effort by the new CEO to cut costs.

A PayPal spokesperson declined to comment.

PayPal CEO Alex Chriss, who joined the company in September, has said cutting costs is a priority, noting in a November earnings call that PayPal’s costs were “too high” and “slowing us down.”

Since the beginning of this year, a slew of major tech firms have conducted rounds of layoffs, including Amazon, Microsoft and Meta Platforms. Google laid off more than 1,000 people across hardware, ad sales and Google Assistant. CEO Sundar Pichai said that there will be more cuts to come through the rest of 2024, The Information previously reported. Smaller companies have also reduced their teams, including Discord, Brex and Flexport.

PayPal, which owns Venmo, Xoom and Honey, has focused on launching new products and redesigning the checkout experience to make PayPal more competitive with rivals like Stripe and Apple Pay. Last week, PayPal announced a handful of new initiatives, including one-click checkout and a redesigned consumer app, which The Information first reported last year.

Late last year, the company announced a number of executive changes, including a new chief people officer, chief technology officer and chief financial officer. It is unclear if today’s layoffs affected senior roles at the company.

Business Of Fashion : Tiger Woods to Unveil ‘Next Chapter’ After Nike Deal

Tiger Woods to Unveil ‘Next Chapter’ After Nike Deal
Woods has been linked with American golf brand Taylor Made since December, when the company filed a trademark for apparel, accessories and equipment, under the name ‘Sunday Red.’

Tiger Woods will on Feb. 12 announce his first moves following the end of his 27-year-long Nike sponsorship deal which ended January.

The American golfer, considered the sport’s all-time great, has been linked with American golf equipment brand Taylor Made since December, when the company filed a trademark called “Sunday Red”, which has long been a reference to Wood’s preference for wearing a red shirt every Sunday since his amateur career days. Golf websites have speculated Woods and Taylor Made are set to launch a brand together.

The trademark covers a range of apparel, eyewear, golf equipment including clubs and balls, accessories such as bags, and physical and online retail services.

Woods’ announcement will be made at a press conference in Pacific Palisades, Los Angeles. The invite makes no reference to Taylor Made or any other brand, and simply states: “Come be a part of the next chapter”.

Woods made his PGA Tour debut as a 16-year-old at the Riviera Country Club, Pacific Palisades, in 1992.

The legendary golfer — who went on to win 15 major professional golf championships, including four PGA Championship wins — first signed with Nike in 1996 on a five-year, $40 million deal, which at the time was the sport’s largest-ever endorsement contract. Despite Woods signing a 10-year contract extension in 2013, Nike ceased manufacturing golf equipment — such as clubs and balls — three years later.

Major athletes are increasingly leaving behind sponsorship deals with the likes of Nike or Adidas towards the end of their careers to partner with lesser-known brands, often in exchange for equity or their own dedicated sub-brand.

In 2019, Roger Federer acquired a three percent stake in Swiss performance running label On and helped it launch its tennis footwear category, following the end of his Nike endorsement the year prior. Scottish tennis player Andy Murray has been a shareholder in British sportswear brand Castore since 2019, NBA All-Star Steph Curry left Nike in 2013 in favour of a lifetime deal with Under Armour.

9to5 : Kuo suggests iPhone shipments will drop 15% this year – and iPhone 16 won

Kuo suggests iPhone shipments will drop 15% this year – and iPhone 16 won’t help

Ming-Chi Kuo is out with a new investor note today focused on his predictions for the iPhone in 2024. The Apple analyst says his latest supply chain survey suggests Apple has “lowered its 2024 iPhone shipments of key upstream semiconductor components to about 200 million units.”

According to Kuo, this marks a decline of around 15% year-over-year for iPhone shipments. He attributes this fall to factors including a slowdown of iPhone sales in China, writing that “Apple’s weekly shipments in China have declined by 30–40% YoY in recent weeks.”

Kuo continues:

iPhone 15 series and new iPhone 16 series shipments will decline by 10–15% YoY in 1H24 and 2H24, respectively (compared to iPhone 14 series shipments in 1H23 and iPhone 15 series shipments in 2H23, respectively).

The iPhone faces structural challenges that will lead to a significant decline in shipments in 2024, including the emergence of a new paradigm in high-end mobile phone design and the continued decline in shipments in the Chinese market.

Looking ahead to the iPhone 16 lineup coming later this year, Kuo says we shouldn’t expect significant design changes or new artificial intelligence features this year.

“It is expected that Apple will not launch new iPhone models with significant design changes and the more comprehensive/differentiated GenAI ecosystem/applications until 2025 at the earliest,” he writes. “Until then, it will likely harm Apple’s iPhone shipment momentum and ecosystem growth.”

9to5Mac’s Take
Take it with a grain of salt. Other rumors have suggested the iPhone 16 lineup will feature notable changes such as the addition of a capture button and bigger screens.

I find Kuo’s reporting on the fate of the iPhone a bit dramatic. I don’t think the iPhone not having “more comprehensive/differentiated” generative AI applications is an example of Apple harming iPhone shipment momentum and ecosystem growth. Furthermore, more reliable sources like Bloomberg have reported a number of times that Apple has significant new AI features planned for iOS 18 this fall.

FT : Zurich’s sale of $20bn life insurance book to PE-backed group collapses

Zurich’s sale of $20bn life insurance book to PE-backed group collapses
German group Viridium cites considerations over its ‘ownership structure’ in halting deal with insurance company

Insurance group Zurich’s sale of a $20bn life insurance book to Viridium has collapsed, with the private equity-backed German consolidator citing “considerations relating to [its] current ownership structure” as regulatory scrutiny of such deals intensifies.

Zurich, one of Europe’s biggest insurers, struck a deal to sell its German legacy life insurance back book — including annuity and endowment products — to Viridium in 2022. The sale was a key step in reducing the group’s exposure to interest rates, Zurich said at the time.

In a statement on Tuesday, Viridium said the transaction “will not proceed as planned due to considerations relating to Viridium’s current ownership structure”, adding: “We regret this as the transaction would offer clear benefits for customers.”

Viridium is majority owned by a fund operated by British private equity firm Cinven, alongside minority investors Hannover Re, the reinsurer, and Italy’s Generali.

Zurich said it was “committed to finding a solution for this portfolio and will explore options in due course”, adding that the deal collapse did not affect its financial targets or capital management plans.

Regulatory scrutiny of the special risks presented by private equity ownership of life insurance companies has climbed, after Italy’s Eurovita — another life insurer majority owned through Cinven funds — was taken into special administration last year following a capital shortfall. 

Germany’s financial watchdog had been poised to shoot down the transaction due to concerns over the ownership of life insurance obligations through a private equity fund, according to people briefed on the matter.

According to the people, BaFin had been closely watching the events in Italy and noted that Cinven did not provide the level of financial backing to Eurovita requested by local regulators. 

A person familiar with Cinven’s position said it did contribute significant capital to Eurovita and played a role in finding a solution for the business.

A person familiar with Viridium’s position said the business was cash generative, with a strong balance sheet. “If we would have [had] a different ownership structure, we would have completed the deal,” the person said.

Private capital firms have swept into the life insurance sector since the financial crisis, buying insurers and scooping up books of capital-intensive business that traditional insurance groups have been keen to offload in a period of low interest rates.

In a paper last year, the IMF warned of potential “contagion” to other parts of the financial system from the rise in PE-linked life insurers. It cited Eurovita as an example of the risks.

Insurance executives have also highlighted the risk of a misalignment of interests between the long-term nature of this insurance business and the shorter timeframe of ownership through a PE fund, rather than a balance-sheet investment by a private capital group.

FT : The days of $100 oil prices are over

The days of $100 oil prices are over
Demand will continue but potential world supply is likely to peg back the cost

Oil will be part of our lives for decades to come. But its value to the consumer has already topped out. Consider the long-term trend for oil prices. Futures markets hint at little concern about supply since the latest Middle East tension began in October.

Even one of the world’s largest producers might be rethinking things. Saudi Arabia’s energy ministry on Tuesday asked the state oil company Saudi Aramco to halt a planned 1mn barrels per day expansion in oil production to 13mn b/d. This had been due by 2027.

The Brent price has fluctuated, sometimes wildly, over the past two decades. Yet the crude price, now at $82, shows every sign of remaining below triple figures.

Large, mature economies have not increased their oil consumption much in the past decade. China’s crude consumption has more than doubled over the past 20 years. But US gasoline demand has gone up by just 8 per cent, according to US Department of Energy data.

That sluggishness is more striking when you consider that the Brent price, adjusted for inflation, has not budged since 2005. Using US prices as a proxy, the cost of oil has not exceeded that of most other goods and services. In real terms it is 42 per cent cheaper than it was a decade ago.


Oil prices at $100 in 2007 and 2011 made sense in light of the explosive growth of China’s economy. The world’s capacity to supply China with oil, metals and agricultural goods could not match its needs.

Now, however, China’s economy has changed. In its rapidly evolving auto market, for example, half of all new car sales will be electric by 2025, thinks Bernstein.

China’s most important oil supplier, Opec, is more upbeat. The country makes up a quarter of Opec’s forecast demand increase for the next couple of years.

Three international energy agencies provide benchmark forecasts for demand and supply changes for the oil market: the International Energy Agency, America’s Energy Information Administration and Opec. Of the three, Opec has been the most optimistic, points out Jorge León at Rystad. Opec expects over 2mn b/d additional demand growth this year. That is nearly twice the IEA’s estimate, and makes the Saudi Aramco decision look odd.

For this forecast to be correct, Chinese oil demand had better get going. Despite Opec’s hopeful stance, there is plenty of spare production capacity. In Russia and Saudi Arabia alone about 4mn b/d exists. That is not far from decade highs, on Citi’s data. That potential world supply will act as a cap on prices for at least the coming year.