tv The Exchange CNBC August 4, 2022 1:00pm-2:00pm EDT
the glow from joe. >> he punched me scarquare in te face let's not forget about healthcare within that, merck is a name that you could buy >> good to see you i'll see everybody in a few. the change is now. i'm jon fort in for kelly evans. a tale of two industries and consumers. the ceos of papa john's and elk beauty join us live on the spending trends they're seeing plus, after holding the top spot for months, tech hiring has slowed significantly so which industry takes the top spot we have the answer as we're counting down tomorrow's big jobs report and apple's big ad
ambitions. laura martin says advertising could be the next big revenue stream what kind of upside she sees ahead. and bob pisani at the new york stock exchange bob? >> hello, jon. we are trying to establish a higher trading range for the s&p and nasdaq a struggle today, but 4150 to 4200 looked like where we were headed same with a nasdaq d dow's not quite breaking out some sectors are out of favor. what's in favor? technology really for the last month or so. ark's been on a tear flattish today banks have been flattish consumer staples, a little out of favor and energy is really out of favor we were about $90 on oil yesterday. we're 87 and change now. some of these big names are just getting clobbered today. oil topped out in early june and really things have changed
significantly since then so the s&p is up fractionally. maybe 2% since oil topped out in early june let me just show you that. technology is up 5 or 6% since early june and energy's down 17%. so the market wants growth it wants more technology and less to do with value and energy one of the problems is oil company profits are expected to be lower in 2023 so big names like occidental and exxon and chevron, their earnings estimates are going to be lower next year than they are this year and the reason is because oil's expected to be low. look at this futures curb for oil. we have expectations for oil a year from now at $82 yesterday, it was at $90 it's been moving down. getting there quick. oil generally means lower oil profit it's simple. if you want to talk about the problem with energy stocks and why they're out of favor the market is snipping out a peak in the fundamental oil
story. that this may be the peak oil. as a result, the 2023 earnings estimates are lower than 2022 and jon, that's a problem for the energy stocks right now but, if you're a big bull and you want growth stocks, you're loving this action in technology the area you cover so well >> thank you is it kind of energy oil versus everybody? is that part of the market story that the idea we hit peak inflation, certainly in energy and that means that everything else, particularly growth that had taken this beating through june now has a chance? >> it's not just oil it's really commodities. so for example, material stocks have been lower on top of that freeport the market is sniffing out a slower global economy which means less demand for commodities and you saw these lockdowns in china by and large, the market loves it when commodity stocks are down and they're the perfect play on inflation.
lower commodities implies inflation is getting more under control. that's why the bulls are so happy to see oil and other commodities move to the down side >> more under control. does that mean under control thank you. despite what you just heard, my next guest says there are two names you should keep. exxon and chevron. let's bring in david harding, cio of summit global investments. david, how do you read what's happened in the market certainly this week. i mean, stretching into the end of last week post fed hike and not only with that means for oil, but what that means overall? >> that's a great question, jon, and thanks for having me bob has it right energy has sold off quite a lot. 17% he showed on the charts. that's great for inflation we've been advocating, moving our portfolios more defensive
away from energy we do see risk in energy or exposure there, but if you're, most people are still going to have some emergencnergy and theo the best are the exxon and chevy ran. you're getting a higher yield play while i think the price levels are already down a little oversold and typically, this is when oil and energy goes down. so yes, it helps with inflation. that's not the whole story here. i think we're finding a little bit of a bottom, a little steady i think it's oversold. so for me, if you're going to have energy exposure, yes, lower maybe the benchmarks out there in the world, but you have to have exxon and chevron exxon's been doing great moves in lower carbon. has a better energy transition strategy these are very much value plays here, not growth so i think people are going to have some exposure here and these are two great names to reduce the volatility that energy's providing >> have we seen peak inflation
you say it's running hot we don't need you to tell us that, but there's the sentiment in the market that things are going to change somehow. >> well, you see that in the numbers. in the turnover, the pce, but if you look at the ten-year break even, the two-year, the reality is that the expectations are still way more than what they've been in the past where they were below two. now they're 2.5 to three on those break even we've come off energy and commodities, but we're still running hot and cpi is still above 9% and that's a problem. so i think they're not going to take it off. fed speak's going to be very active that's going to create just better awareness more choppy trading, more awareness that you better understand what risks your portfolio have in it the more you understand the
risk -- >> what more can the fed say we don't have the usual time at the end of this month to actually, you know, get a hike perhaps. so they're coming out pretty vociferously over the past few days and the market seems to have shrugged it off we still have some earnings revisions to go through. is that what makes people stop fighting the fed >> i think if you look at the different recessions that we've had going pback over the last several decades, revisions have been much more than they are today. so i think in order to really get where we need to be, yes, downward revisions are outpacing numbered revisions, but clearly, i think there's more to come so i think there's another leg left down here and i think you need to be very protective of your recent gains that you have. >> okay. we'll watch for the head fake.
thank you. now a slowdown in ad spending has been putting pressure on social stocks. this as apple seems to be betting on ads as one of its best new revenue streams laura martin is an internet and senior media analysis. apple stock by the way up 20% this month laura, this is interesting not just because it's apple, but also because amazon has this similar advertising story where it's as within its own echo system that have a clearer line of effectiveness is that what you're look at here and really, how big a business is that for apple? >> so, the tam is about 450 billion, which would double apple's revenue. their services revenue is about
80 billion out of 320. so it would really accelerate services revenue and the importance of that is that it has 70% margins which is twice the margin of the hardware business apple trades on earnings per share. on pe. >> how do you get that $450 billion tam? you're looking at global mobile advertising writ large not just within apple's own ecosystem. apple historically has been pretty hesitant to really engage in the sort of advertising practices that would allow them to grab a larger tam they want to have more control less privacy invading targeting. they would say and keep it small. >> i agree 100% with that, but we saw this in netflix who for ten years said we will never do advertising then last quarter said we have to have advertising. because growth is slowing in the
economy and advertising is such a huge total addressable market. it's sort of silly to walk away from if you're trying to create shareholder value. say you've got a $400 billion tam and 70% margin, apple needs to to go after that really the catalyst here is that since apple has changed its privacy settings, a lot of its app developers are yelling and screaming because their revenue fell if they were ad driven. so apple is trying to solve the ad revenue problem for them. for its app developers that are ad driven by creating a privacy first platform that it runs so it's not sharing the privacy information of its holders it will ask permission, of course but then that will solve the revenue problem for its ad-driven apps on its ecosystem. >> so we can expect to see apple us using its advertising system to drive downloads and purchases
similar to we're seeing amazon driving purchases within its own ecosystem, but what's going to be the first signal if they're showi showing beyond that, where that big tam really is? >> i would say it's tam, it's probably trying to replace a out of services of 20 billion, i would guess 7 billion is out of service today and it's probably down to five so it's trying make sure that app developers don't abandon iso and go to android instead because they can't make money on ios devices. i would guess this is a near term defensive move. they need to make money. so that's first it's going to be defensive. on the, after it solves this problem, then it might move to
the bigger ecosystem, but i don't think that has to be the main driver of apple's strategy here it could just be to make sure app developers stay on the ios system which sells the next piece of hardware. >> do you think they will use apple maps to drive local advertising? one could argue they have maps as potential search vehicle. they've got apple pay on the other end of it. do they make a connection in between the maps and the pay to actually show attribution for a transaction? >> you know, the kind of jobs they're listing for are much more standardized 30 second spots programically. so what you're talking about is a for sophisticated ad unit. which is like three steps down the line so right now, i'm going to go with just sort of standardized
30 second ads, super simple. apple's new to this business it's a hard tech stock to build. i would guess it would take them two to three years to get into this business if they stick with it but i think they'll be forced to because i think ios developers are abandoning them unless they fix this >> so no competing with google in the short-term. thank you. coming up, shares of elf beauty up more than 6%, raising a full year outlook. that stock's up 47% in the past three months the ceo's going to join us live with how he's managed higher gas prices, labor and supply chain challenges, and more than. chairs of papa john's meanwhile moving in the opposite direction. down more than 3% on an earnings miss the ceo mentioning the return to travel is one of the headwinds going to ask him about that. as we head to break, let's get a check on the markets
the dow down just over 100 points s&p, about flat. nasdaq slightly in the green the exchange is back after this. ♪ in any business, you ride the line between numbers and people. what's right for the business and what's best for everyone who depends on it. solving today's challenges while creating future opportunities. it takes balance. cla - cpas, consultants, and wealth advisors. we'll get you there. this thing, it's making me get an ice bath again. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq,
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shares of elf beauty up more than 6%. the company also saw a 68% increase in its gross margins but said that was primarily driven by price increases to help off set higher transportation costs joining me now to discuss these results, the chairman and ceo. welcome. so, i'm trying to understand where beauty fits in this really weird inflationary environment that we're in. we heard walmart say people with paying so much for gas and food that there's not a lot of money left to spend on other things. we saw match group you know, disappoint, but i mean, is beauty an essential? is the fit here that people are actually going out to meet actual people rather than online and they've got to put on makeup and that's why your margins are so good? >> we are really bullish on the category so you talked about walmart.
they called up beauty as one of their bright spots as did target a number of other customers. definitely feel that consumers are ready to get out there and see other people so we continued strength and bullish on the cosmetics category and skin category within those, we're well positioned this is our 14th consecutive quarter. our adjusted ebitda was up 46% and what i'm most proud of is we've built 120 basis points in market share >> tell me more about product mix. what's what's shifting in this environment? what are customers more willing to spend on and view as less necessary? >> we're seeing strength across skin care and color cosmetics. we have this incredible value. w we're able to take products that were only in the prestige market
and bring them to incredible pr prices a product like our primer which sells for $11, but the prestige equivalent is $34. i think it's based on the great value equation second is our innovative engine. >> are consumers coming to you from elsewhere it seems to me even if it's a prestige product, if people are feeling pinched, maybe they don't want to spend that unless they're spending it on something else that costs more are you spilling share here or what's happening >> both. we're benefitting from trade down from prestige i talked about our power grip primer it's an incredible product at an amazing value. we're also getting trade in. i think our ability to attract and engage consumers
one of the reasons we built so much market share, one of the reasons why it has such roi. we build 120 points to market share based on being able to bring people from other mass brands as well as trade down to prestige >> what are you doing on costs still hiring or expanding your retail footprint or are you kind of pulling back in the face of uncertainty? >> we are one of the unique companies that even going into the pandemic double down continue to launch innovation. we've taken our marketing levels up this year, we're going to spend between 16 to 19% of net sales it's focused on the consumer we continue the launch products. we're continuing to invest more behind our brands and we're seeing the momentum behind that. >> beautiful thank you. coming up, recruiter.com seeing big changes on the hiring
front. we're going to tell you what they are and whether it's a precursor to tomorrow's big jobs report plus, warner brothers discovery on deck with earnings for the first full quarter as a combined company. a few things investors will be r watching for and take a look at the dow heat map visa and caterpillar among your biggest gainers. walmart and evn onchroamg your biggest losers the exchange is back after this.
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points it had been slightly higher at times in the session s&p down fractionally. nasdaq slightly in the green let's get to contessa brewer for a news update. jon, good to see you the biden administration plans as soon as today to declare the nation's monkeypox outbreak a public health emergency. in the last few minutes citing two sources. the goal is to increase awareness and unlock more funding. jurors deciding the fate of the gunmanwho killed 17 people in 2018 are touring the florida high school where it happened. the 23-year-old defendant waived his right to be present during that visit he's pled guilty and now faces either the death penalty or life in prison. a lawyer representing two sandy hook parents who sued alex
jones said the january 6th committee asked for two years of texts. the attorney told the court yesterday lawyers for jones had mistakenly given him those texts and indicated they included trump's communications are roger stone. >> thank you coming up, earnings season rolls on expedia, lyft and door dash reporting after the bill and they have something in common. all down more than 40% this year could resultis give these names an upside?
it is time for earnings exchange where we give you the action, the story, and the trade for three names set to report results after the bell first up is expedia. it is down more than 40% plenty of pent up demand, but inflation and high fuel costs have consumers thinking twice about taking trips rival booking holdings warned of a slowdown in the third quarter in its results yesterday will expedia also be caution
kristina partsinevelos has the story here and we have the trades today also a cnbc contributor. >> let's start with the three positives setting the tone you had google that said the travel that contributed the most you had bookings that posted earnings that beat estimates and airbnb that had record bookings. however, there are three negatives. a recession, fears of a slowdown the second point, too, is the foreign exchange impact on free cash flow, which we saw previous quarter for expedia. they did take a hit. the second one, which is small, but still a problem. all those flights at the end of q2 could have an impact on their sales. one of the two big points or numbers i'll be looking at is gross bookings that's expected to be around $28
million. the stock was down about 40% underperforming the s&p 500 and we can see airbnb doing better shares are down about 2% right now. >> thanks. you don't like it. >> no, jon thanks for having me i think there's some downside risk a lot of demand was pulled forward because we got through the pandemic, but the big thing investors should be looking for is year-over-year comparables. if you look at what they did in q1, they grew 80%, but still down below 2019. i think that is really important for investors to look at and we just mentioned what's happening with the retail segment is going to be a really, really important thing for us to see in the numbers because we're showing cracks in consumer sentiment. especially for discretionary items. especially walmart and a lot of other big box retailers talk about that that's something that could be a
headwind for the company and big tech is also making a play in this area. those giants are starting to get traction i think there's downside risk in the stock. >> any risk of a pinterest style surprise where their numbers were actually bad and the guide was bad and yet people found a silver lineing in that cloud an it popped. what would it take for people to get excited even if you're right on the fundamentals? >> pinterest had something to do with their activist investors. showing on the retail segment, their largest segment. showing strength in that year-over-year that would be, add confidence to investors that they're going to do well. i think that the numbers that investors want to focus on >> okay. well, we got to look forward to
that and mention by the way, sidew "squawk on the street's" going to have more with peter kern tomorrow at 10:00 a.m. eastern next up is block riding a six-day winning streak, but nearly 70% off the highs as it's been brought down with the broader tech wreck this year but results after the bell could give it a boost. shares have climbed on three of its last four reports. kate rooney has the story on this one fintechs have been having a good string >> good month or so. there's a few sides to focus on for earnings today first, you go to cash app. the consumer banking an. venmo competitor it has been one of the highest growth areas venmo had a good quarter with paypal then the seller business which saw more of a slowdown during
covid. there's been a reversal with the point of sale. payments out of the business growing faster than cash app also index to business then for cash app, way more index to consumer spending and just the growth area in general. so we'll see how user engagement looks. some of that growth could give us a few of the u.s. economy block is still a u.s.-based company. then you've got after pay. the buy now pay later business that block bought. there's a lot of fear around it. around the consumers and finally, bitcoin jack dorsey's big focus when it comes to block part of the reason they changed the name the crypto affiliation has been a negative for the stock when you talk sort of mainstream analysts the crypto crowd tends to look it, but those on wall street see it as something weighing on the stock. we'll see if they take an
impairment charge. it said if the price of bitcoin goes down below, they've got to write it part of the revenue miss was because of lower bitcoin trading. >> block chain, meta those name changes didn't come at a great time. d delano, this stock's sq was at -- a few days ago now 89 how good do the earnings have to be >> pretty good this is a company we've been holding. a lot of fintech companies have been hammer. what you're looking at, obviously the crown jewel, which i think now is cash app. the start of the business that's been growing the most. operational growth up to 624 million in q1, 26% that's the strong part of the
business on the downside, which investors can be focusing on is obviously you know, economic downturn. after pay acquisition still has to play out. we're holding here better evaluation than we're seeing a while ago so investors could be holding here >> what happens to cash app if the consumer slows down? is it sort of protected in some way because of the nature of it and what the user base is or does it take a big hit >> i think it has a little bit of insulation as opposed to after pay. a lot of their revenue on the cash app side is from services direct instant payments is the biggest portion. i think those continue if consumers have issues. i think still see strong margins and profits on that type of business as opposed to the after pay side of the business i think that side of the
business will hold up and i think we'll see that in the numbers. >> all right door dash. shares down 45% this year despite dominating food delivery with nearly 60% of the u.s. market share also took a hit when amazon announced prime member benefits with grub hub last month steve kovach has the story here. steve? >> yeah, jon, a few things we're going to be watching with doordash after the bell. how it looks after this blockbuster performance after the pandemic where it was growing. the comps are going to look tough here and not to mention, people are getting out and about and traveling more and going to r restaurants instead of ordering from them. another growth segment, they're kind of diversifying now so alcohol and grocery are becoming more and more important as people get out and about.
and monthly active users, how many people are using the platform and paying the subscription service, dash pass, which saves you a few bucks on every order. those are the most loyal customers. and this is similar from what we heard from uber earlier in the week how are they managing driver demand when uber talked about how they're able to convert those drivers over from food to people and they're expecting demand to increase in the fall and are curious to hear what doordash will say >> are people putting on their elf beauty makeup and ordering in maybe they're putting on their makeup and going out and driving for doordash >> that's a good thing >> maybe whatever makeup they're putting
on, doordash, what they did a great job with, increasing orders and volume. the big thing we found is the profitability. obviously when they went from 8 billion to 24.7 billion in gross order volume, still profitable obviously in 2021, they lost about 441 million. so the big thing now is consumer ads, especially on the doordash side, more people are driving. margins and costs effects. obviously on the consumer side, you know, if we're looking at a place where more people are going out and the consumer thinking about if this is a discretionary item or a must have, that could potentially have headwind risk >> not excited about this one. we'll see if it's tasty or not thank you, steve
welcome back inflation front and center this earnings season particularly in the restaurant sector. lower end names reporting a pullback in spending while higher end names like chipotle and starbucks say those customers are proving sticking papa john's missing on top an bottom lines, but management saying they're able to target both types of consumers with incentives and innovations joining me now to discuss is the
ceo, rob lynch, and kate rogers. >> hi, rob, thanks for being here >> great to see you. >> so we'll kick it off here we're hearing from a lot of competitors in the fast food space about the lower income consumer trading down in recession. you said today papa john's can benefit from that and do well in a recessionary environment tell us why. >> there's almost no better business to be in during a recessionary environment than pizza. pizza is pretty much the best value you can get when it comes to food. our industry you can still feed a family of four for about $10 can't do that in traditional qsr or at the store anymore. we feel great about the industry as a whole and specifically, our business, we've been great about delivering premium innovation. we also have a great value platform that meets the needs of cost conscious consumers especially heading into a challenging economic time. so we feel great about our ability to persevere through
some of these situations >> you mentioned value you're up about 8% in terms of pricing. not doing national value platforms could be a controversial take only pizza chain with positive u.s. comp, so it's working will you stick with this plan if consumers start to pull back >> absolutely. we want to meet the needs of all of our consumers we feel like a 6.99 price point is different in san francisco than in columbus, ohio so we allow our markets to regulate our they're going to meet the needs of their customers and offer value in those markets. our business is 75% ecommerce. that allows us to offer different menus and different prices depending on what market you're in. we're more strategic about how we deliver our value platforms, but we have value to meet the needs of a cost conscious customer while we're promoting nationally our premium innovation, which keeps our brand front and
center, creates new ways for new customers and current customers to come back more. >> you said this is something we haven't heard with others, but people are traveling more this summer there's a lot of pent up demand. explain what that means for the back half of the year. >> absolutely. pizza as a stay at home planned purchase there's always been seasonality in our business and the summertime when people go on vacation and travel more, we tend to see a decrease in transactions across the industry over the course of the pandemic when people weren't going on vacation, were staying home, we didn't see that seasonality sey occur. we're seeing people return to travel and the transaction decline. so it's actually good news though it means people are getting back to normal and we're moving out of the pandemic and our ability to continue to sustain positive transactions despite having the touchest comps in the industry
is an indication that we're ready to continue to outperform during these changing times. >> it's jon. you mentioned food basket costs were up 18% and that labor is still expensive. 800 basis points of headwind for corporate restaurant year-over-year because of that but is the labor market loosening up at all for you? >> yes, we are seeing some improvement in our ability to recruit and retain employees we have worked hard to keep our employees safe throughout the pandemic obviously staffing has been a challenge for the last two years but as things open back up and people become more comfortable with coming back to work, we are seeing our restaurant staffed manufacture appropriately. that said, we're not all the way to bright. it's also a challenging business for labor, but we're seeing improvement on that front. >> rob lynch, we have to leave
it there thank you so much for joining us >> thank you, kate great to see you as well >> jon, back to you. >> thank you again, and still ahead with companies like google and microsoft slowing hiring, might be no surprise that it's the most in demand industry. we'll dig into new data and how job sentiment is changing. that's next. what do you mean? these straps are mind-blowing! they collect hundreds of data points like hrv and rem sleep, so you know all you need for recovery. and you are? i'm an investor...in invesco qqq, a fund that gives me access to... nasdaq 100 innovations like... wearable training optimization tech. uh, how long are you... i'm done. i'm okay.
welcome back breaking news out of the fed steve liesman has it steve? >> hey, jon. thanks the fed president in a meeting with reporters just reiterating her call that she sees rates going up above 4%. that is the fed funds rate something she has said in the june economic projections. it is interesting she holds to it now even though the market has come down. the market has a peak rate, at least the futures market does, of 340 she said a lot of data between now and september when she has to do it again and she'll be looking at that and changing it
maybe front loading it more. she went on to say that again, she could alter that rate and the fed could pause in the second half of 2023 after raising rates. she said the u.s. is not in a recession, but the risks are rising back to you. >> you >> steve, this is what the market is doing. the s&p just climbed up a little higher on this is this fighting the fed it looks like fighting the fed >> you know, the market, the equity market has a mind of its own and it is interesting that the bond market heard what fed officials were saying which is this idea of rate cuts are not likely, but the equity market didn't hear that as you know yesterday was a powerful rally equity markets seem to have some mind and fundamentals of its own and jon in terms of repricing that it had in terms of the sell-off and finding more value out there right now, and what we're not hearing, whatever the
reason, it would not appear to be from the fed and their rhetoric about giving up rate hikes next year. you remember we had daly we had bullard and other officials, as well and kashkari, as well, saying this idea of raising rates and then cutting them quickly is probably not the best forecast, but the equity market is doing its own thing here, mester, and the idea of a cause and you hang there for a bit is not necessarily what is priced into the the markets, jon. >> is this set up for a different kind of meeting in late august then and how the fed might be challenged to message >> right so i assume the meeting you're talking about is the one in jackson hole which i think setting up is a really interesting meeting. i think the fed will want to think a lot about its course ahead, and the meeting comes in september where me ster would
not chime in on the 50 or 75 if you give me a second, i believe it was priced at a 50 most recently. it's a 50%, 60% for a 50 and 42% for a 75 there's a bit of a debate in the market over that right now, jon. look, the main thing about this september meeting is there are two jobs reports, one of which comes tomorrow and mester and everyone will be watching that closely. there are two cpi reports and one comes next week and one before the meeting in september. there's a lot for the fed to put into its models to figure out where it wants to go with rates and any guidance at all and what we have is this meeting to meeting situation and that's why i need to pop on here with any comment made by a fed official >> it's like parents where the kids don't listen. steve liesman, thank you >> the fed is going to be watching that jobs data that seef
steve just mentioned and the tech hiring will begin to crop up with job seekers and new data from recruiter.com shows i.t. is no longer the industry after a four-month streak moving off of the way down to fifth place. joining me now with the industries that have pulled ahead and where the jobs are is recruiter.com evan sohn. does this mean that the workers who are looking for jobs are finding them, it seems like? >> thanks, jon, for having me on the segment. again, the recruiter.com recruiter index surveys our recruiters these are the industries where they're relying on recruiters to help them find the talent that they're having a hard time finding. so clearly, at the beginning of the year and through march and the i.t. companies are driving the most demand out of these recruiters that's really shifted this past month to automotive, apparel,
architecture, engineering and accounting and business services and all of whom have seen a good spike over the past month. the interesting thing, john, the workload is consistent from two months ago to july, to the june index and july index so they're working on the same volume of roles, but have shifted their focus and they're following where the money is and the money is not in overstaffing and the i.t. tech companies and really in these other industries >> is there something that tends to happen when you see that sort of shift it seems the high-dollar jobs in i.t. and software engineering and not all of them, and shifting to automotive,a b appal and fashion and it seems anything that is in demand when we say the tech industry is not top, it's that the tech companies aren't hiring. it's not necessarily the job of the developer, it's the customer
support per support person and what you start to see is the companies were out to disrupt the norm, they themselves are now gettin disrupted by the return to work. so you're seeing these right sizing of companies that overstock their employees, that overstock certain departments and whether it's the customer service side and not necessarily the high-tech roles of those companies and they might be the same roles, but now instead of going to a high-tech firm, you're going into the fashion industry, the automotive industry and the business services industry. >> gotcha. evan sohn from recruiter.com thank you. >> thanks, john. >> up next, warner brothers discoveries and there are reports of big streaming shift will be announced after the bell today. those details after this quick break.
two big media names out with earnings paramount reported before the bell and shares disappointing, while warner brothers discovery is up about 2% ahead of its first quarterly report as a combined company julia boorstin joins me now with the key factors to watch in that release. julia? >> well, jon, after its first full quarter as a combined company investors are very curious to hear ceo david zasov's road map for warner's discovery as they're expected to report 2 cents in $11.8 billion in revenue first, there's the question of the future streaming investors are looking for subscriber gains after netflix's contraction and last quarter, the combined company added 2 million subs for a total of 24 million. just as important as the press release with the earnings release is what ceo david zasov says in the earnings call when we expect to hear the road map
for combining discovery plus in hbo max. just this morning we got news of cross pollination with the company announcing it's putting chip and joanna gaines discovery content on hbo max and cnn contact on discoveryplus another thing they want an update on is cost-cutting and last quarter the company estimated $3 billion in costs and we're seeing examples of that including shelving "bat girl" which cost an estimated $90 million to produce an advanced test screening fell flat with fans and there is, of course, an accounting benefit to taking a writedown jon? >> julia, thank you. that will do it for "the exchange." i'm join courtney reagan on "power lunch" which starts right now. ♪ ♪ come on over, jon. welcome to "power lunch. i'm courtney reagan along with