General Motors narrowed its full-year financial outlook on a run-up in commodity prices and logistics costs, The Wall Street Journal's Kelly Cloonan reports.
During an earnings call with analysts, GM executives cited growing pressure from record copper prices and elevated steel prices as the Iran war drags on. For the year, GM projects a $2 billion headwind from commodity inflation, logistics and memory-chip costs. The Detroit automaker also expects an additional $1 billion to $1.5 billion in costs tied to software, supply-chain investments and U.S. production onshoring.
GM said the pressures could continue to weigh on its performance into next year if commodity prices stay elevated, though it still expects to benefit from the launch of a new truck. The cost pressures overshadowed higher quarterly profit and revenue, and the announcement of a $20 billion share-buyback plan.
The company this week plans to update its progress on bringing eyes-off, hands-free automated driving assistance to market in 2028, a goal it set last year as executives dialed back EV ambitions in the wake of regulatory rollbacks championed by President Trump.
-- GE Aerospace raised its outlook for the year, with strong demand bolstering orders even as supply-chain snarls result in slower production and delivery delays. (WSJ)
-- United Airlines posted a decline in quarterly profit and issued guidance below analysts' expectations as high fuel costs cut into its margins, even though price hikes boosted revenue. (WSJ)
Number of the Day
$6.276
Average on-highway price for a gallon of diesel in the week ended Oct. 19, up nearly 10 cents from the week before, after three weeks of declines, according to the U.S. Energy Information Administration.
Energy
Persian Gulf oil exports have surpassed prewar levels, as an improvised shipping system under U.S. protection is helping tankers move oil through a fierce wave of Iranian attacks in the Strait of Hormuz.
The Journal reports that Middle East oil flows, including shipments through Hormuz and alternative routes across the region, averaged more than 24 million barrels a day in the week through Oct. 18, surpassing prewar levels of 23.3 million, according to Kpler.
Pipelines across Saudi Arabia and the United Arab Emirates are also moving oil along different routes. In September, about 40% of the non-Iranian crude shipped out of the Gulf bypassed the strait, compared with 17% before the war, Kpler estimated.
Agriculture
The Trump administration plans to hand out an additional $8 billion in direct payments to U.S. farmers who face losses from market disruptions and high fuel costs, the Journal's Patrick Thomas writes. The planned payments under a U.S. Agriculture Department program come as America's farmers struggle with higher diesel prices stemming from the Iran war.
Before the creation of the new program, the Agriculture Department estimated that direct payments to farmers would hit $44 billion this year. Trump's latest farmer bailout is structured similarly to a $12 billion program announced in December. The money was disbursed to farmers earlier this year and was intended to address the president's trade war with China, which hurt crop exports.
-- Brazil found a highly contagious bird virus at a commercial turkey producer, prompting trade restrictions with several trading partners. (Bloomberg)
"We appreciate President Trump and [USDA] Secretary Rollins recognizing that higher diesel prices have squeezed farmers' bottom lines." American Farm Bureau Federation President Zippy Duvall
In Other News
-- U.S. housing starts fell 5.2% in September to 1.221 million, and the National Association of Realtors said pending home sales fell to their lowest level on record as mortgage rates rose. (WSJ)
-- DSV narrowed its full-year outlook and posted a 19.5% increase in earnings on gains in its Air & Sea division, though the integration of Schenker hit volumes, productivity and reliability in its Road unit.
-- Amazon said it plans to hire more than 300,000 seasonal, part-time and full-time workers for its U.S. operations this holiday season. (WSJ)
-- Kroger laid out a multiyear strategic overhaul and long-term targets as the grocer looks to improve its offerings and boost earnings. (WSJ)
-- 3M is poised to sell up to $100 million in server connectors next year after signing a deal with Amazon that could lead to billions of dollars in sales of connectors and other data-center products. (WSJ)
-- Apple agreed to buy up to $100 million of titanium over three years from Pennsylvania's Perryman. (Reuters)
-- The Transportation Department awarded $2.3 billion in grants for 105 freight- and passenger-rail improvement projects across most of the U.S. (TrainsPRO)
-- Executives from Seaspan and Wan Hai warned that the highest level of orders for new containerships since 2009 raised the threat of overcapacity. (Lloyd's List)
-- A gap in the digital defenses in warehouse bar code scanners could expose e-commerce supply chains to cyberattacks, according to Kaspersky Security Services. (DC Velocity)
-- Air Canada Cargo is expanding its freighter operations to Europe and Latin America with new flights to Amsterdam; Monterrey, Mexico; and Panama City. (Air Cargo News)