Episode summary
Caterpillar, European, and Big Tech Earnings | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu · Guests: John Butler, George Ferguson, Anurag Rana, Christopher Ciolino, Lee Klaskow, Tim Craighead, Peter Werner
Summary
Verizon’s new CEO is trying to shift the company from a network-first mindset to a more consumer-focused growth model, and the analyst said the dividend remains safe. The clearest near-term levers are broadband expansion, including fiber through the Frontier deal and fixed wireless access, with wireless cross-selling into those households. The analyst also said Verizon still has the best coverage, but it must improve speed, performance, and brand perception to catch up with T-Mobile’s consumer appeal.
Boeing’s quarter looked better than expected once a large 777X charge was stripped out, with the commercial airplane business moving closer to break-even and cash flow turning positive. The analyst said inventory drawdown should keep supporting cash generation, while 737 build rates can rise gradually if the FAA and production stability hold. He gave Kelly Ortberg high marks for morale, quality, and execution, and said the long-delayed 777X still has a strong backlog and customer base.
Big tech earnings reinforced that AI spending is still accelerating. Microsoft, Meta, and Alphabet all increased capital spending, but the analyst said Alphabet is better at showing a clear path from AI investment to cloud revenue and monetization, while Meta still has to convince investors that its spending will pay off. Caterpillar also benefited from AI-related demand, especially power generation equipment for data centers, with a record backlog and resilient margins despite tariff pressure. UPS, meanwhile, is cutting 34,000 jobs and closing facilities to reshape its network, lower costs, and reduce exposure to lower-margin Amazon volume.
Key takeaways
- The analyst said Verizon’s dividend is safe, but the company must pivot toward consumer branding and broadband-led growth to regain momentum.
- Boeing’s quarter looked better after stripping out the 777X charge, with the analyst saying commercial aircraft is moving closer to break-even and cash flow is improving.
- The analyst said Alphabet is winning the AI capex debate because it can already show cloud revenue benefits, while Meta still lacks a convincing monetization story.
- Caterpillar’s backlog hit a record $40 billion, and the analyst said power generation for AI data centers is becoming a major growth engine.
- UPS expects $3.5 billion in cost savings this year and is reducing Amazon exposure as it modernizes its network and adds automation.
Notable quotes
“the dividend is safe, Paul. I mean, that's the good news for Verizon”
“I think the real watch word of the day here for Verizon is to pivot from a very technology or network oriented company to now Shman is going to turn them into a very consumerfocused company”
“I think the common theme is that capital expenditures are going up, which means they're to spend so a lot more money to expand their data center footwork”
“it was really driven by higher volumes across all three of their core businesses, uh, with particular strength in energy and transportation again”
“we think we see you know above average production um and earnings visibility as we begin to think about next year”
How the episode opens
This is Bloomberg Intelligence with Scarlett Fu and Paul Sweeney. How do you think the Fed is looking at tariffs, the uncertainty of tariffs? Let's take a look at the sectors and how they perform.
A lot of investors getting whipsawed every day by news events. Breaking market headlines and corporate news from across the globe. Could we see a market disruption, a market event?
Are people just too exuberant out there? You see some so-called lowquality stocks driving this short-term rally? Bloomberg Intelligence with Scarlett Fu and Paul Sweeney on Bloomberg Radio, YouTube, and Bloomberg Originals.
On today's Bloomberg Intelligence Show, we dig inside the big business stories impacting Wall Street and the global markets. Each and every week, we provide in-depth research and data on some of the 2,000 companies and 130 industries that our analysts cover worldwide. Today, it's another major earnings week.
We'll break down some big tech earnings from this week. Spoiler alert, the AI fueled spending surge keeps racing ahead. Plus, that AI frenzy is now spilling over to heavy machinery and oil fracking.
We look into how Caterpillar fared when they reported this past week. But first, Verizon, the US largest mobile service provider, reported a loss in wireless phone subscribers in the third quarter as a new chief executive officer laid out an aggressive growth strategy to reclaim market share. Dan Schulman, a former CEO of PayPal, was appointed just a few weeks ago to replace Hans Vesbrook over at Verizon after two straight quarters of subscriber declines and a stock performance that has lagged the two main rivals.
For more, we're joined by John Butler, Bloomberg Intelligence senior telecom analyst. I first asked John to break down Verizon's earnings. So, this first of all, I'll tell you, uh, the dividend is safe, Paul.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- earnings
- ai future of work
- telecom strategy
- aerospace defense
- logistics job cuts
Companies and tickers mentioned
- VZ
- BA
- MSFT
- META
- GOOGL
- GOOG
- CAT
- UPS
- Verizon
- Boeing
- Microsoft
- Meta
- Caterpillar
- UPS
- Cooley
- Bloomberg
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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