Bavan Arumugam

High oil prices and lousy weather… were no problem for Delta Air Lines. Much to everyone’s delight, the airline overcame these obstacles by hiking fares. And, somehow, the company managed to sell more seats on its plane in the third quarter.

But can you blame them… because airline fuel cost the airline $655 million more compared to the same quarter last year. Fuel prices were up 37% and to add to that, Hurricane Florence cost the company another $30 million. Despite these obstacles, Delta’s profit was up $127 million for the quarter.

The details on how they did it… passengers paid an average of 4% more to fly per mile. The increase alone gave sales an $892 million bump which more than covered the fuel costs. Delta is the first airline to report its third-quarter earnings, and the result is a good one for investors (but not so much for passengers).

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If you can’t beat ‘em… you should sue ‘em. eBay is filing a lawsuit against Amazon alleging that the company fraudulently led high-value sellers away by using an internal messaging system called M2M. eBay also stated the Amazon is “unwilling to fairly compete for third-party seller business.” In a nutshell, Amazon is [allegedly] a big cheater!!

Here’s how they got caught… eBay monitors its messaging system for unauthorized use. However, eBay only caught Amazon a few weeks ago when a seller informed the company about the Amazon reps. From there, eBay discovered messages from a “large number” of Amazon representatives.

eBay also emphasized… that their company is a “pure open marketplace” that doesn’t compete against its sellers. Amazon can’t claim the same thing because they make their own products that compete directly with other sellers; but something is making customers switch over to the dark side. Maybe it’s the two-day shipping?

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Corporate America to the rescue… the Dow closed up 2.2% on Tuesday on the back of big corporate profits from some of the most prominent companies. Yesterday represents the best day for the Dow since March. And, quick to forgive, investors were back on the Amazon, Facebook, and Netflix bandwagon after dropping the stocks like a hot potato last week!

Last week took an L…, but today we bounce back (after last week’s mini-crash). Last week, the Dow, S&P 500, and Nasdaq all had their worst week since March (yes, the same month the market had its best day). However, despite the solid rebound, all three indexes are down for the month.

Yesterday’s issues… are slightly better today. Treasury rates have gone from 3.25% to 3.15% which has calmed investors down a bit. Remember – treasury rates move in the opposite direction of stock prices. Let’s hope the bull keeps charging forward!

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The results are in… and they are quite good. Netflix gained close to 7 million new subscribers last quarter which is 2 million more than expected. With the latest results, Netflix now has more than 137 million subscribers worldwide. And with the subscriber growth came a 14% price hike in the company’s stock (hopefully you didn’t sell last week).

Netflix has the last laugh… because the stock plummeted with last quarters subscriber results…and then again, last week, with the rest of the tech stocks. CEO Reed Hastings chalked the second quarter up to “forecasting issues.” Also, in the future, the streaming giant plans to only account for those who pay for their Netflix account – not you ‘free trial’ freeloaders.

Another big plus… is that 6 million of the total new subscribers were from overseas. So what’s next? Well, the company plans to keep investing heavily in original content – somewhere between $8-13 billion in 2018. Netflix is hoping the massive cash investment will pay dividends in the future.

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