United Airlines Shares Climb Higher After Airline Forecast The Rebound In Travel Will Continue

Plus, Coca-Cola said its second quarter revenue topped 2019 levels, Bitcoin is rebounding, and Ford is partnering with Argo AI and Lyft on an autonomous vehicle fleet.

Stocks were higher at the open on Wednesday with the Dow adding 45 points, or 0.1%. The S&P 500 rose by nearly 0.2%, while the Nasdaq traded just above the flatline.

United Airlines shares are up nearly 3% at the time of writing after the carrier forecast that the rebound in travel will continue in the months ahead. The airline reported its sixth consecutive quarterly loss late Tuesday, though its losses are narrowing as bookings improve even as the COVID-19 delta variant spreads. “Our airline has reached a meaningful turning point: we’re expecting to be back to making a profit once again,” United Airlines CEO Scott Kirby said in the earnings release. “As we emerge from the most disruptive crisis our company has faced, we’re now focused squarely on our United Next strategy that will transform our customers’ onboard experience and help fulfill United’s incredible potential.”

In other earnings news, Coca-Cola reported its second quarter revenue topped 2019 levels this morning. Coke reported earnings per share of $0.68 on revenue of $10.13 billion, while analysts had expected earnings per share of $0.56 on revenue of $9.32 billion. The company also raised fully-year guidance, saying it now expects to deliver organic revenue growth of between 12% and 14%, and forecast adjusted earnings per share growth of between 13% to 15%. After the bell Tuesday, Netflix delivered a beat on subscriber growth but missed earnings expectations. The streaming giant posted global net subscriber additions of 1.54 million, versus 1.19 million expected, with earnings per share of $2.97—analysts had expected earnings per share of $3.16—on revenue of $7.34 billion. And Chipotle delivered a beat, posting earnings per share of $7.46 on revenue of $1.89 billion, compared to expectations of earnings per share of $6.52 on revenue of $1.88 billion. “Chipotle’s second quarter results highlight the strength of our brand and our people, as we demonstrated growing momentum in the business,” said Brian Niccol, Chipotle Chairman and CEO. “We remain confident in our key growth strategies and believe they will help us achieve our next goal of $3 million average unit volumes with industry leading returns on invested capital that improve as we continue to add Chipotlanes. Strong restaurant level economics combined with significant restaurant growth should allow us to optimize earnings power for many years to come.”

Bitcoin is rebounding this morning, and has risen 6.5% to $31,874.66 at the time of writing after falling below $30,000 yesterday. Vijay Ayyar, head of Asia-Pacific at cryptocurrency exchange Luno, argues Wednesday’s rebound is likely a “dead cat bounce,” adding that unless Bitcoin can climb above $32,000 to $33,000, it will likely fall to between $24,000 and $25,000. “We saw broad market rallies across the board last night as well, and I think crypto is just playing off of that,” Ayyar said. “In general, there are a lot of macro factors weighing down on risk-on assets at the moment – inflation worries, COVID, and with crypto we’ve got more specific worries such as much more regulatory oversight.”

JPMorgan awarded CEO Jamie Dimon 1.5 million stock appreciation rights as a retention bonus to incentivize him to continue to lead the banking giant for several more years. Dimon can exercise the stock options in five years if the stock price rises. “This special award reflects the board’s desire for Mr. Dimon to continue to lead the firm for a further significant number of years,” JPMorgan said in a regulatory filing. “In making the special award, the board considered the importance of Mr. Dimon’s continuing, long-term stewardship of the firm, leadership continuity, and management succession planning amid a highly competitive landscape for executive leadership talent.”

And Ford said it will launch an autonomous vehicle fleet with Lyft and Argo AI by the end of 2021. The partnership will see Argo AI and Ford launch Ford self-driving cars with safety drivers from Lyft, with rides beginning in Miami later this year and in Austin, TX beginning in 2022. “Argo and Ford are currently piloting, mapping and preparing for commercial operations of autonomous vehicles in more cities than any other AV collaboration, and this new agreement is a crucial step toward full commercial operations – the addition of Lyft’s world-class transportation network,” said Scott Griffith, CEO, Ford Autonomous Vehicles & Mobility Businesses. “These three companies share a belief that autonomous vehicles will be a key enabler for a cleaner, safer and more efficient urban mobility landscape. This is the beginning of an important relationship between three dynamic companies ultimately aiming to deliver a trusted, high-quality experience for riders in a multi-city large scale operation over time.”

Stocks We’re Watching

Lithia Motors (NYSE: LAD): Lithia Motors shares are up more than 5% this morning after the company reported its highest second quarter revenue and earnings per share in its history, with revenue growth of 118% in the quarter. “Our team’s high performance, alongside the robust, demand-driven retail environment in the second quarter, resulted in same store revenue growth of 20% for new vehicles, 49% for used vehicles, 39% for F&I and 3% for service, body and parts compared to 2019,” said Bryan DeBoer, Lithia & Driveway, President and CEO. “We achieved our initial Driveway monthly volume milestone in the final month of the quarter and are on pace to reach our target of 15,000 Driveway transactions this year. Combined with our outpaced growth in our core business and network development, we are considerably ahead of our year one goals laid out in our 5-Year Plan announced in July 2020.”