The daily business briefing: April 21, 2022
Tesla reports record first-quarter profit, home prices hit a record high, and more
Tesla reports record 1st-quarter profit
Tesla on Wednesday reported record first-quarter profit of $3.32 billion, a seven-fold increase as sales jumped by 80 percent over a year earlier. The electric-car maker said its earnings per share reached $3.22, beating expectations of $2.26 per share. Revenue reached $18.76 billion, compared to $17.80 billion expected. CEO Elon Musk said Tesla would be able to increase production more than previously projected this year despite ongoing supply-chain clogs and China coronavirus restrictions that cost Tesla a month of production at its Shanghai factory. "Shanghai is coming back with a vengeance," Musk said. He said Tesla would produce more than 1.5 million vehicles this year, 60 percent more than last year.
Home prices hit record high
Home prices jumped to an all-time high in March, with the median existing-home price reaching $375,300, the National Association of Realtors reported Wednesday. Buyers rushing to close purchases before mortgage rates, which already have hit 5 percent, rise further. Prices have gone up year-over-year for more than a decade now, the longest such streak on record. High prices deterred some potential buyers, and low inventory contributed to a decline in the number of existing-home sales, which fell 2.7 percent in February and 4.5 percent from March 2021, according to the report. Still, the typical home only stayed on the market 17 days in March before getting snapped up.
Florida lawmakers square off against Disney World
Florida's Republican-controlled Senate on Wednesday advanced a bill seeking to eliminate Disney World's special taxing district, which has allowed the theme park to govern its own land. Gov. Ron DeSantis (R) pushed the move to dissolve the Reedy Creek Improvement District after Disney publicly pushed for the repeal of the state's Parental Rights in Education law, which critics refer to as the "Don't Say Gay" bill. Senate President Wilton Simpson (R) said Reedy Creek and five other independent special improvement districts targeted in the bill have "many powers we do not believe they should have in 2022." Sen. Tina Polsky, a Democrat, called the proposal "revenge governance and the most brutal form of cancel culture." The state House is expected to vote Thursday.
Stock futures rise as big earnings week continues
U.S. stock futures gained early Thursday ahead of another flurry of earnings reports. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.6 percent and 0.8 percent at 6:30 a.m. ET. Nasdaq futures were up just over 1 percent. Tesla shares provided a boost, rising more than 5 percent after the electric-car maker reported better-than-expected earnings. United Airlines shares jumped by more than 7 percent after it forecast a 2022 profit. The Dow gained 0.7 percent on Wednesday, but the S&P 500 and the Nasdaq dropped 0.1 percent and 1.2 percent, respectively. On Thursday, investors will be watching quarterly reports from several companies, including AT&T and American Airlines, as well as weekly jobless claims numbers.
Netflix stock rout continues
Netflix shares continued to dive on Wednesday, dropping 35 percent the day after the streaming-video company reported its first quarterly subscriber loss in more than a decade. Netflix said after releasing the results that it is considering offering a lower-priced option supported by ads to help attract customers. That would mark a significant shift, as Netflix has always touted itself as commercial-free. "Those who have followed Netflix know that I've been against the complexity of advertising and a big fan of the simplicity of subscription," Netflix Chair and Co-CEO Reed Hastings said in a call with analysts after the company released its quarterly results. "But as much as I'm a fan of that, I'm a bigger fan of consumer choice."