What’s happening: The company said after markets closed that chip shortages and manufacturing disruptions tied to Covid-19 slashed $6 billion off its revenue last quarter.
“Disruption to the global supply chains and inflation in the cost of materials such as steel and services such as trucking have also raised our cost of operations,” said Brian Olsavsky, Amazon’s chief financial officer.
Amazon CEO Andy Jassy warned that the company’s consumer business expects to incur several billion dollars of additional costs in the current period. Apple expects its supply chain costs to keep growing, too.
“We estimate the impact from supply constraints will be larger during the December quarter,” Luca Maestri, the chief financial officer, said.
This week, the National Retail Federation said it thinks holiday spending will break records this year, growing between 8.5% and 10.5% compared to 2020.
“There is considerable momentum heading into the holiday shopping season,” NRF President Matthew Shay said. “Consumers are in a very favorable position going into the last few months of the year as income is rising and household balance sheets have never been stronger.”
Retailers, he added, “are making significant investments in their supply chains and spending heavily to ensure they have products on their shelves to meet this time of exceptional consumer demand.”
But those extra investments could crimp profits, overshadowing the spending spree.
Down to timing: Executives are reminding customers not to procrastinate this year or they may not find what they’re looking for. They’re dangling earlier promotions and sales to front-load shopping where possible.
Facebook is changing its corporate name to Meta
So it’s changing its name. Naturally.
The move is intended to highlight the social media giant’s pivot to the “metaverse” as it builds out online social experiences that leverage augmented and virtual reality.
“Today we’re seen as a social media company, but in our DNA, we are a company that builds technology to connect people,” Zuckerberg said. “And the metaverse is the next frontier just like social networking was when we got started.”
They mean business: The company is changing its stock ticker. It plans to begin trading under “MVRS” on Dec. 1.
And the company is backing up the shift in strategy with real money. It said earlier this week it will take a $10 billion hit to operating profit this year in order to ramp up investment in metaverse products.
But the corporate pivot doesn’t resolve the public relations crisis plaguing Facebook/Meta, which is generating momentum for regulators to intervene.
Want to buy a home? Don’t wait, this expert says
The red-hot housing market has many would-be homeowners wondering if they should wait for prices to come down before buying a property.
“I don’t think it is wise to wait,” Corcoran said Thursday at CNN Business’ “Foreseeable Future” event. “Of course, if you can’t find a house, you have to wait. But to make it part of your plan to wait until house prices come down, I don’t envision that happening over the next few years. At least not for the next year.”
Home sales have cooled a bit recently from earlier in 2021, but prices continue to climb as supply remains constrained.
Yet holding out could cost more, according to Corcoran. If US home price appreciation maintains a pace similar to the past year, she noted, homebuyers are going to pay another 12% to 14% for the same house in 2022. Goldman Sachs recently forecast home prices would increase by another 16% by the end of next year.
That said: Don’t call it a bubble!
“We don’t really have a bubble,” Corcoran said. “What we have is an unusual market that’s just gone bonkers based on individual demand of the people who want to live there.”
Up next
Also today: The Federal Reserve’s preferred measure of inflation arrives at 8:30 a.m. ET, along with US personal income data for September.
Coming next week: World leaders gather in Glasgow for COP26 climate talks. Will companies be compelled to do more to curb emissions or boost disclosures?