Eli Lilly (LLY) earnings This fall 2023

Eli Lilly logo is shown on one of the company’s offices in San Diego, California, U.S., September 17, 2020. 

Mike Blake | Reuters

Eli Lilly on Tuesday reported fourth-quarter revenue and adjusted earnings that topped expectations on the strong launch of its new weight loss drug, Zepbound, and higher prices for its blockbuster diabetes drug, Mounjaro.

Here’s what Eli Lilly reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

  • Earnings per share: $2.49 adjusted vs. $2.22 expected
  • Revenue: $9.35 billion vs. $8.93 billion expected

Eli Lilly posted net income of $2.19 billion, or $2.42 a share, for the fourth quarter. That compares with a profit of $1.94 billion, or $2.14 a share, a year earlier. 

Excluding one-time items, the company posted a per-share profit of $2.49 cents for the fourth quarter of 2023.

The pharmaceutical giant booked fourth-quarter revenue of $9.35 billion, up 28% from the same period a year ago.

The quarterly results are the first to include sales of Eli Lilly’s new weight loss drug Zepbound, which won approval from the Food and Drug Administration in early November. 

Some analysts expect Zepbound to rake in more than a billion dollars in sales in its first year on the market, and are enthusiastic about the drug in part because it may cause more weight loss than Novo Nordisk’s blockbuster obesity injection Wegovy. 

Shares of Eli Lilly jumped almost 60% last year as weight loss drugs skyrocketed in popularity despite hefty price tags, mixed insurance coverage and a handful of unpleasant side effects. With a market cap of roughly $673 billion, Eli Lilly is the largest pharmaceutical company based in the U.S. 

Eli Lilly will hold an earnings call with investors at 10:00 a.m. ET on Tuesday. 

Executives will likely be asked about whether the company has made more progress in addressing the supply issues plaguing its weight loss and diabetes drugs. 

There may also be questions related to the timing of the FDA’s decision on Eli Lilly’s experimental Alzheimer’s drug, donanemab, which significantly slowed the progression of the memory-robbing disease in patients at the early stages of it.

This is breaking news. Please check back for updates.

Trump floats ‘greater than’ 60% tariffs on Chinese language imports

US President Donald Trump and China’s President Xi Jinping attend a business leaders event inside the Great Hall of the People in Beijing on November 9, 2017.

Nicolas Asfouri | AFP | Getty Images

Former President Donald Trump plans to escalate the U.S-China trade war he launched during his first term as president if he is elected to the office again in November.

The GOP frontrunner confirmed in an interview broadcast on Sunday that he is considering a plan to impose tariffs of 60% or higher on Chinese goods in his potential second term.

“We have to do it,” Trump said in an interview on Fox’s “Sunday Morning Futures.”

The Washington Post first reported the Trump campaign was weighing a theoretical 60% Chinese tariff plan.

On Sunday, the former president said he might even go higher: “Maybe it’s going to be more than that.”

Beyond China, the former president has said he would impose a blanket 10% tariff on all U.S. imports, despite broad criticism over how that could hurt consumers.

Former UN ambassador Nikki Haley, Trump’s sole remaining presidential challenger, criticized that policy proposal for the impacts it would have on American pocketbooks.

“What Donald Trump’s about to do, is he’s going to raise every household’s expenses by $2,600 a year,” said Haley in a January interview on CNBC’s “Squawk Box,” referencing data from the fiscally conservative National Taxpayers Union.

Her disapproval echoes the concerns of Wall Street investors who worry that another China trade war would disrupt markets again.

Starting in 2018, Trump began a wave of $250 billion in tariffs against China. The country then struck back with its own set of tariffs against the U.S. in a back-and-forth economic battle that lasted years and disrupted global trade dynamics.

Trump’s trade war with China cost Americans an estimated $195 billion since 2018, according to the American Action Forum, a conservative think tank. The economic battle also led to the loss of more than 245,000 U.S. jobs, according to the U.S.-China Business Council.

At the time, Deutsche Bank estimated that the trade war was causing the stock market to hemorrhage trillions.

The tariff dispute also left the U.S. and China, once each other’s biggest trading partners, on rocky geopolitical terms. President Joe Biden has been trying to warm the icy relations throughout his administration.

Trump has attacked Biden for appeasing China while simultaneously expressing cozy sentiments toward China’s authoritarian president, Xi Jinping.

“I like President Xi a lot,” Trump said Sunday. “He was a really good friend of mine during my time.”

Trump has in the past praised Xi for the ironclad grip he has on his government and his people. In an interview with Fox News’s Sean Hannity in December, Trump said if he is re-elected for a second term he would be a dictator “from day one.”

Trump later claimed in an interview broadcast Sunday that he had meant he would be “a dictator” on his first day in office, his “day one,” but only for a day. The comment nonetheless alarmed election experts, and provided grist for his opponents.

Carvana targets redemption after chapter considerations, restructuring

A Carvana sign and signature vending machine in Tempe, Ariz.

Michael Wayland/CNBC

PHOENIX – As layoffs and cost cuts roil Wall Street, from retail and shipping to tech and media, embattled online used car sales giant Carvana says its own restructuring is in the rear view.

Carvana over the last 18 months aggressively restructured its operations and debt amid bankruptcy concerns to pivot from growth to cost-cutting. They were crucial moves for the company and its largest shareholders, including CEO and Chairman Ernie Garcia III and his father, Ernie Garcia II. The two control 88% of Carvana through special voting shares.

The efforts thus far have been successful, propelling Carvana’s stock last year from less than $5 per share to more than $55 to begin 2024 – marking a significant turnaround for the company, but still a far cry from the stock’s all-time high of more than $370 per share reached during the coronavirus pandemic in 2021. Shares closed Thursday at $42.53.

“We have every intention of continuing to make progress and don’t expect to return to a situation like that,” the younger Garcia told CNBC about the company’s dire circumstances. “I think the pressure of the last two years caused us to really focus on the most important things.”

The Tempe, Arizona-based company has taken $1.1 billion of annualized expenses out of the business; reduced headcounts by more than 4,000 people; and launched a new proprietary “Carli” software platform for end-to-end processing of vehicle reconditioning as well as other “AI,” or machine learning, systems for pricing and sales. The systems replaced previous processes that involved manually inputting data into separate systems or spreadsheets. 

The result, Carvana hopes, is better footing to navigate an automotive industry that’s shifting and normalizing from a supply-constrained environment to one with less favorable pricing power for dealers.

Return to growth

Carvana has been a growth story since its initial public offering in 2017. It posted growing sales every year from its 2012 founding through 2022, when restructuring began.

The business concept of Carvana is simple: buy and sell used cars. But the process behind it is extremely complicated, labor-intensive and expensive.

Carvana puts each vehicle it intends to sell through a lengthy inspection, repair and sale preparation process. It ranges from fixing scratches, dents and other imperfections to engine and powertrain components. There’s also significant logistical costs and processes for delivering vehicles to consumers’ homes and the company’s signature car vending machines across the country.

A Ford F-150 is prepped for a painting booth at Carvana’s vehicle reconditing center outside Phoenix. The vehicle is wrapped so only the spot needed to be repainted is showing.  

Michael Wayland / CNBC

In 2022, retail sales declined roughly 3%. Headed into the fourth quarter of last year, they were down a further 27%.

Carvana is currently in the “middle of step two” of a three-step restructuring that Garcia initially laid out to investors roughly a year ago.

Step 1: Drive the business to break even on an adjusted EBITDA basis. Step 2: Drive the business to significant positive unit economics, including positive free cash flow. Step 3: Return to growth.

“We’re trying to stay really focused on just building the business as best we can,” Garcia said during a rare, wide-ranging interview at a Carvana vehicle reconditioning center near Phoenix in mid-January.

The CEO, sitting under a “Don’t be a Richard” poster featuring former President Richard “Dick” Nixon (it’s one of Carvana’s six core values), says the company is largely done with taking fixed costs out of the business, but he believes there’s more room for reductions in variable costs to increase profits before returning to a growth-focused company again.

Wall Street largely agrees.

Carvana CEO and cofounder Ernie Garcia III

Screenshot

“We walked away confident that CVNA has room to further improve its cost structure and drive additional operational efficiencies. These efficiencies would come from three main areas: the further development of internal software, standardized processes, and improved training and career pathing,” said JPMorgan analyst Rajat Gupta in a December analyst note following an investor briefing and tour of a Carvana reconditioning center in Florida.

At the end of the third quarter, Carvana had $544 million in cash and cash equivalents on hand, up $228 million from the end of the previous year. The company reported total liquidity, including additional secured debt capacity and other factors, of $3.18 billion.

It recorded a record third-quarter gross profit per unit sold of $5,952, while cutting selling, general, and administrative expenses by more than $400 per unit sold compared to the prior quarter.

The company reports its fourth-quarter results on Feb. 22.

New era, new tech

At the center of much of Carvana’s cost reductions is new tech to optimize operations.

The company introduced Carli, a host of software “solutions” or apps for each part of reconditioning a vehicle. The suite of tools records inspections and reconditioning of inbound vehicles step by step, including price checks and benchmarking costs for parts and overall expenses per vehicle. It’s followed by other systems to assess market value and sales prices for each vehicle.

The systems helped contribute to $900 in cost savings per unit in retail reconditioning and inbound transport costs over past 12 months.

“We rolled Carli out across all sites. It’s a single, consistent, much more granular inventory management system,” said Doug Guan, Carvana senior director of inventory analytics, who formerly led expansion for Instacart. “That’s what we’ve been focused on for the last year and a half.”

Each vehicle that enters Carvana’s reconditioning center has a barcode sticker to assist in tracking the vehicle through its process as it prepares to be sold.

Michael Wayland / CNBC

Guan, who started at Carvana in 2020, is among a new group of hires from a variety of backgrounds that range from Silicon Valley tech startups to more traditional vehicle operations such as CarMax, Ford Motor and Nissan Motor.

Carvana’s offices, where it shares a campus with State Farm, feel a lot like a startup. On a floor housing customer support, music blares – the likes of Coldplay to Neil Diamond. A black-and-gold gong sits nearby to celebrate when costumer service reps, internally called “advocates,” assist customers in a sale, among other milestones.

Other than Carli, Carvana has built custom tools to support its inbound and outbound logistics activities that have driven down costs by about $200 per unit. These include mapping, route optimization, driver schedule management, and pickup/drop-off window availability, including same-day delivery, which the company recently launched in certain markets.

The customer care team has also recently begun piloting generative artificial intelligence for some requests, including automatically summarizing customer calls, training AI to act as an “advocate” and incorporate the company’s values: be brave; zag forward; don’t be a Richard; your next customer may be your mom; there are no sidelines; we’re all in this together.

A black-and-gold gong sits nearby to celebrate when costumer service reps, internally called “advocates,” assist customers in a sale, among other milestones.

Michael Wayland / CNBC

“Customer experience has been No. 1 at the heart of everything that we do, which I think after being here all these years, it’s amazing to say that still very, very true statement,” said Teresa Aragon, Carvana vice president of customer experience and the company’s first employee outside of its three cofounders.

In 2023, Carvana’s customer care team under Aragon handled 1.3 million calls and another 1.3 million chats and texts, according to stats posted on a bathroom flier called “Learning on the Loo” that the company confirmed.

The generative AI pilot, which is separate from Carli, has helped Carvana to reduce headcount in the department by 1,400 people while reducing processing times.

‘Never something that we considered’

Many investors are back on the Carvana bandwagon after the company managed through the last two years, but some concerns remain.

The Garcia family and its control of the company have been a target of some investors, including a lawsuit last year brought by two large North American pension funds that invested in Carvana alleging the Garcias ran a “pump-and-dump” scheme to enrich themselves. Its one of several lawsuits that have been brought against the the father-son duo in recent years, largely involving the family’s businesses.

In general, CEO Garcia said he attempts to use criticism as motivation in his “march” to lead Carvana, invoking a phrase he has regularly ended investor calls with for several years: “The march continues.”

Family ties

Carvana went public three years after spinning off from a Garcia-owned company called DriveTime, a private company owned by the elder Garcia, who remains the controlling shareholder of Carvana. DriveTime was formerly a bankrupt rental-car business known as Ugly Duckling that Garcia II, who pled guilty to bank fraud in 1990 in connection to Charles Keating’s Lincoln Savings & Loan scandal, grew into a dealership network.

Carvana has separated itself from the company but still shares many processes with DriveTime. The close link between Caravan and other Garcia-owned or -controlled companies has given some investors pause.

The Wall Street Journal in December 2021 detailed a network of Garcia companies that do business with DriveTime, Carvana or both.

Most notably, Carvana still relies on servicing and collections on automotive vehicle financing and shares revenues generated by the loans. The businesses also, at times, sell vehicles to one another and Carvana leases several facilities from DriveTime in addition to profit-sharing agreements.

For example, during 2022, 2021, and 2020, Carvana recognized $176 million, $186 million and $94 million, respectively, of commissions earned on vehicle service contracts, or VSC, also known as warranties, sold to its customers and administered by DriveTime.

Carvana sells such warranties or other service-related protections to customers, and DriveTime takes them over, giving Carvana a commission. It’s one of several multimillion-dollar transactions between the family-controlled companies.

The younger Garcia, who started Carvana while serving as treasurer at DriveTime, says completely separating from Drivetime is not a main priority at this time, as it utilizes already established systems such as the financing and servicing that aren’t core to Carvana’s operations.

Carvana’s march hasn’t always been in a straight line: The company was a darling stock of the coronavirus pandemic, as it was lightyears ahead of traditional auto retailers in selling vehicles online – a process that surged during the global health crisis and, in some states, became the only way businesses could operate due to stay-at-home orders.

But it couldn’t keep up with demand, pushing Carvana to invest billions in growth opportunities, including an acquisition of used car auction business ADESA.

Then the used vehicle market shifted and Carvana’s aggressive growth plans — which included buying thousands of vehicles from auctions and consumers at hefty premiums compared to traditional auto dealers to build inventory — became a major liability when prices declined.

Carvana’s debt grew, including the debt-funded ADESA deal, and its stock became the most shorted in the country as fears of bankruptcy and a creditor fight grew. The stock lost nearly all of its value in 2022, causing some to speculate bankruptcy may be ahead.

Garcia is adamant that he never believed bankruptcy would happen, saying “absolutely not” when asked about it. His confidence was fueled by a belief that the service Carvana offers – selling and buying used vehicles online and streamlining the tedious process of car purchasing is something consumers need and want.

He also said taking the company private – which scared some stakeholders and investors – was never a viable option: “I would say it was a thought in the sense that other people thought about it. It was never something that we considered,” Garcia said.

The inside of a Carvana sign vending machine in Tempe, Ariz.

Michael Wayland / CNBC

But Carvana’s debt load is still very much a factor.

A deal between Carvana and a group of investors who collectively owned $5.2 billion of its outstanding unsecured bonds reduced the used car retailer’s total debt outstanding by more than $1.2 billion but also kicked much of the debt to later this decade, at largely higher interest rates.

Marc Spizzirri, a senior managing director of B. Riley Advisory Services, said every restructuring is unique but in general companies need to take action quickly after taking on debt to ensure they don’t land in the same circumstances that drove the debt in the first place.

“They have to be able to service that debt,” said Spizzirri, a former franchised dealer. “It’s a classic pre-bankruptcy process and in [many companies’] minds that’s not an option for them … But they can’t keep repeating what they’ve done before.”

Carvana’s new notes will mature in 2028; the old notes, which carry interest rates ranging from just under 5% to more than 10%, are due between 2025 and 2030. The old and new notes make up roughly 78% of Carvana’s nearly $6 billion total debt.

For now, the march continues for Carvana.

Kenya Moore Talks Co-Parenting With Marc Daly Amid Divorce

Kenya Moore is navigating the challenging waters of single motherhood. She recently opened up about her restrained relationship with her ex, Marc Daly.

The Real Housewives of Atlanta star has made it no secret that ever since her split from the restauranteur, they haven’t exactly been on good terms.

Kenya Moore Talks Co-Parenting With Marc Daly

The former couple embarked on their journey of marriage in June 2017.

A little more than a year later, in November 2018, they welcomed a baby girl named Brooklyn into their lives. However, their marital bliss was short-lived, and by September 2019, they decided to call it quits.

Despite their marriage ending, however, the legal proceedings for their divorce are still in process. And while Moore has spoken out about the difficulty of co-parenting with Daly in the past, things appear to have worsened over time.

During an appearance on ‘The Big Tigger Morning Show,’ the 53-year-old admitted that Brooklyn and her dad don’t share much father-daughter time.

According to Moore, he has only shown up for a “few” visitations since their split, indicating that he doesn’t tend to see his daughter very often — at least not in person.

“There isn’t really any co-parenting because there really hasn’t been any visitation – not zero, but very few,” she shared.

She further added that the responsibility to make an effort to see Brooklyn lies with Daly. Unfortunately, she says that hasn’t happened much in the last three years.

Kenya Says She’s Very Much Still Single

Moore also revealed she’s still single and hoped to be swept off her feet again. While she’s been dabbling in and out of the dating scene these past few years, she hasn’t found “the one” yet.

And by “the one,” we’re talking about the man she sees herself having another child with, as the former Miss USA pageant revealed she’d be open to expanding her family with the addition of another baby.

“I’m a single mom,” she said, adding, “I know somebody out there trying to make me a two-time single mom. Where you at?”

She recently showed up and showed out at Usher’s residency in Las Vegas.

Back in November, the former model stunned in a figure-hugging white cut-out dress as Usher approached her seat and serenaded her in front of the sold-out crowd.

Kenya Moore Makes No Mention Of Marc At Brooklyn’s Birthday

That same month, she celebrated Brooklyn’s fifth birthday, which she documented in a series of posts shared to her social media.

The pink-themed birthday bash party had everything a little girl could dream of — musical chairs, a castle bounce house, temporary tattoos, and even a visit from Snow White herself.

“Happy Birthday Princess Brooklyn! It’s just you and me and I love you more than anything in the world! Everything I do is for you,” Kenya wrote, expressing her love for her little girl.

She also thanked the party planners and everyone who made the day special for Brooklyn.

Interestingly enough, however, her caption did not mention Daly, once again suggesting he was not in attendance.

RELATED: Kenya Moore Calls Out Kim Zolciak Following ‘Evil’ RHOA Shade, Accuses Her Of Lying Through ‘Plastic Teeth’

Merck (MRK) This autumn earnings report 2023

The logo for Merck & Co. is displayed on a screen at the New York Stock Exchange (NYSE) in New York City, New York, U.S., November 17, 2021. 

Andrew Kelly | Reuters

Merck on Thursday reported fourth-quarter revenue and adjusted earnings that topped estimates as it saw strong demand for its blockbuster cancer drug Keytruda and HPV vaccine Gardasil. 

The pharmaceutical giant posted a net quarterly loss, however, due to previously announced charges associated with a deal the company struck in October with the Japanese drugmaker Daiichi Sankyo to co-develop three highly sought-after cancer treatments.

Here’s what Merck reported for the fourth quarter compared with what Wall Street was expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

  • Earnings per share: 3 cents adjusted vs. a loss of 11 cents per share expected
  • Revenue: $14.63 billion vs. $14.50 billion expected

Shares of Merck closed almost 5% higher on Thursday.

The company posted a net loss of $1.23 billion, or 48 cents per share, for the quarter. That compares with net income of $3.02 billion, or $1.18 per share, during the year-earlier period. 

Excluding acquisition and restructuring costs, Merck earned 3 cents per share for the fourth quarter. The company’s results include a charge of $1.69 per share related to the Daiichi Sankyo deal. 

Merck raked in $14.63 billion in revenue for the quarter, up 6% from the same period a year ago. 

Those results come as Merck shows significant progress in preparing for Keytruda’s patent expiration in 2028, with a handful of new deals under its belt and key drug launches ahead. The loss of exclusive rights to the drug will likely mean its sales will fall, forcing the company to draw revenue from elsewhere.

More CNBC health coverage

Merck CEO Robert Davis said on an earnings call Thursday that the company “feels very good” about the progress it has made to grow its drug portfolio. But he said “we need more” products, adding that the company remains interested in signing acquisitions or collaboration deals.

Merck also issued its full-year 2024 guidance, which was generally in line with expectations. The company expects revenue to come in between $62.7 billion and $64.2 billion and adjusted earnings to be $8.44 to $8.59 per share this year. 

Analysts surveyed by LSEG expected Merck to forecast full-year sales of $63.52 billion and adjusted earnings of $8.42 per share. 

That adjusted earnings outlook includes a one-time charge of roughly 26 cents per share related to Merck’s acquisition of Harpoon Therapeutics, which develops immune-based cancer drugs, earlier this month.

Merck also announced a new restructuring program for 2024, which aims to improve the manufacturing network of both its pharmaceutical division and animal health business. Merck recorded charges of $190 million related to the program in the fourth quarter, which is excluded from its adjusted results.

That brings Merck’s total restructuring charges for the period to $401 million. That number also includes charges from a restructuring program the company launched in 2019.

Pharmaceutical business posts growth

Merck’s pharmaceutical business, which develops a wide range of drugs for several disease areas, booked $13.14 billion in revenue during the quarter. That’s up 8% from the same period a year ago. 

Merck’s immunotherapy Keytruda, which is used to treat several types of cancer, largely fueled the growth.

The drug booked $6.61 billion in revenue, up 21% from the year-earlier quarter. Analysts had been expecting $6.41 billion in Keytruda sales, according to estimates from FactSet. 

The treatment saw growth from increased use in earlier stage cancers and strong demand among patients with metastatic disease, or cancer that spreads to different part of the body, Merck CFO Caroline Litchfield said during an earnings call Thursday. Merck also saw a jump in sales of Gardasil, a vaccine that prevents cancer from HPV, the most common sexually transmitted infection in the U.S.

Gardasil raked in $1.87 billion in sales, up 27% from the fourth quarter of 2022. That’s slightly below the $1.92 billion that analysts were expecting, according to FactSet estimates. 

Merck’s experimental Covid-19 treatment pill, called molnupiravir

MERCK & CO INC | via Reuters

Meanwhile, sales of its Covid antiviral pill Lagevrio fell to $193 million during the period, down 77% from the $825 million reported for the fourth quarter of 2022. Still, the drug blew past analysts’ expectations of $69 million in sales, according to FactSet. 

That’s no surprise: Demand has plummeted for Lagevrio and other Covid products from companies such as Pfizer and Moderna over the last year, as cases and concern about the virus dwindled from their pandemic peaks.

Merck’s Type 2 diabetes treatment, Januvia, also saw sales fall to $787 million during the quarter, down 14% from the same period a year ago. The company said competition from cheaper generic drugs outside of the U.S., particularly in Europe, and lower demand in the U.S. cut into the sales.

That total still came in higher than analysts’ estimate of $732.3 million for the period, according to FactSet. 

Januvia is one of 10 drugs that will be subject to Medicare drug price negotiations, a policy under the Inflation Reduction Act that aims to make costly medications more affordable for seniors. Also on Thursday, Medicare is making initial price offers for each of those drugs. 

Merck’s animal health division, which develops vaccines and medicines for dogs, cats and cattle, posted $1.28 billion in sales, up 4% from the same period a year ago.

The company said higher demand for companion animal products, such as the flea and tick treatment Bravecto, drove the increase.

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Small enterprise optimism rises regardless of inflation: Goldman Sachs survey

U.S. President Joe Biden speaks during a Rose Garden event at the White House to mark National Small Business Week on May 1, 2023 in Washington, DC.

Alex Wong | Getty Images

Small business owners are more optimistic to start the year, even as they face persistent inflation and lending concerns, a new poll released Thursday found.

Seventy-five percent of small business owners are optimistic about their financial trajectory in 2024, up from 68% a year earlier, according to a survey by Goldman Sachs 10,000 Small Business Voices, a policy advocate for small business owners.

Meanwhile, 28% of respondents rated the economy as good or excellent, up 9% from a quarter ago.

More than half of small business owners surveyed said they expect to create jobs this year, and 62% reported they anticipate profits will increase.

The survey adds to a recent string of data showing consumers and businesses have started to grow more confident about the economy after a stretch where inflation was stubborn and borrowing became tougher.

“The fact that 75% of small business owners are optimistic is a remarkably high number, considering inflation continues to plague them, they continue to face access to capital challenges and workforce-related issues … all of those challenges have been very sticky for the last few years with no real progress,” Joe Wall, managing director of government affairs at Goldman Sachs, told CNBC.

The survey was conducted nationally in mid-January among more than 1,400 small business owners.

‘Growth opportunities’ despite challenges

Jill Bommarito, CEO of Detroit-based Ethel’s Baking Company, said she has seen solid consumer spending, and noted that supply-chain issues and inflation are easing. The wholesale baking company, which launched in 2011 and now has 26 employees, specializes in dessert bars and sells in Whole Foods, Target and Costco.

“There’s growth opportunities. It doesn’t mean we’re not up against headwinds … there’s no question about that. However, the demand for real, authentic brands and services is there, and more so than ever,” said Bommarito, a graduate of the Goldman Sachs 10,000 Small Businesses program, which provides business education and support services.

The survey also asked respondents to rank the difficulty of the last four years. Interestingly, small business owners found 2023 nearly as hard as 2020 — the peak of the pandemic and a time when many companies could not operate. Thirty-five percent of respondents said 2020 was their most challenging year, while 33% picked 2023.

“I don’t think most people appreciate the fact that last year was, for a third of small businesses, they would say that was the toughest year they’ve had,” Wall said, citing the inflation and supply-chain issues owners faced.

Inflation is still a major concern for business owners, even as the rate of price increases falls. Seventy-one percent of those surveyed reported inflationary pressures had increased over the last three months.

Rising prices jumped to the top of the list of small business concerns in the National Federation of Independent Business’ monthly read on sentiment in December, outpacing labor woes and regulations.

Some of the economic optimism in Goldman’s data could be due to expected rate cuts from the Federal Reserve in the year to come, Wall said. On Wednesday, the Fed left interest rates unchanged and signaled it would not start trimming rates yet.

Main Street is also focused on the lending environment amid high interest rates. About three-fourths, or 77%, of respondents to Goldman’s survey said they are concerned about their ability to access capital.

The poll also asked about Basel III Endgame plans, which will increase capital holding requirements for larger and regional banks. The survey found that 86% of respondents said their growth forecast would take a hit if it continues to get harder to access capital.

Goldman Sachs has come out against the Basel III Endgame proposal.

In addition, just about one-third of owners polled said they believe they can afford to take out a loan. Of the 35% of those surveyed who applied for a loan in the last year, nearly 80% found it difficult to access affordable capital. And 40% received all of the funding they requested.

In addition, 28% of respondents who applied for loans said they’d taken out a loan or line of credit with payment terms they found to be predatory.

The NFIB’s recent polling also found business owners were paying high interest rates, as the average rate paid on short-term loans hit 9.8% in December, up from 7.6% in January 2023.

Bommarito said access to working capital is her top issue for 2024.

“We’re the foundation of this economy,” she said of small businesses like hers. “In general, we are just considered the riskier bet.”

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As America Sleeps, Republicans Advance Mayorkas Impeachment

There will be a vote to impeach DHS Secretary Mayorkas after Republicans voted to send articles of impeachment to the full House.

Republicans on the House Homeland Security Committee tweeted:

BREAKING: The House Committee on Homeland Security has voted to advance articles of impeachment against DHS Secretary Alejandro Mayorkas out of committee.

— House Homeland GOP (@HomelandGOP) January 31, 2024

The sham of these articles was best expressed by committee ranking member Rep. Bennie Thompson (D-MS) who said, “The extreme MAGA Republicans who are running the House of Representatives are deeply unserious people. They don’t want progress, they don’t want solutions. They want a political issue and most of all they want to please their disgraced former president House Republicans take their marching orders from Donald Trump who has directed them to reject a bipartisan border bill and urge Republican governors to defy a United States Supreme Court order ensuring the border patrol can do its job including members of this committee.

Do Republicans Have The Votes To Impeach Mayorkas?

According to a CNN report, House Republicans do not have the votes necessary to impeach Alejandro Mayorkas, House Republicans are still working on getting the votes required to impeach Mayorkas:

Jake Tapper asks if House Republicans have the votes to impeach Mayorkas. The reply, “Well, that is something they are still working on.” pic.twitter.com/7wmUpK7UYN

— Sarah Reese Jones (@PoliticusSarah) January 30, 2024

Republicans don’t have the votes to impeach Mayorkas, but they are sending the articles to the floor anyway, Unserious people are abusing their power because they think it will help get Donald Trump back into the White House.

House Republicans advanced these impeachment articles while most of the country was asleep because they were trying to hide the dirty work that they were doing for Donald Trump.

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We have been honored to be able to put your interests first for 14 years as we only answer to our readers and we will not compromise on that fundamental, core PoliticusUSA value.

Jason is the managing editor. He is also a White House Press Pool and a Congressional correspondent for PoliticusUSA. Jason has a Bachelor’s Degree in Political Science. His graduate work focused on public policy, with a specialization in social reform movements.

Awards and  Professional Memberships

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Merck, J&J CEOs comply with testify in Senate listening to on drug costs

Sen. Bernie Sanders, I-Vt., holds his news conference with Sen. Ed Markey, D-Mass., in the Capitol on Thursday, January 25, 2024, on issuing subpoenas for pharmaceutical company CEOs to testify regarding drug prices.

Bill Clark | Cq-roll Call, Inc. | Getty Images

The CEOs of Merck and Johnson & Johnson have voluntarily agreed to testify at an upcoming Senate hearing on high drug prices in the U.S., Sen. Bernie Sanders announced Friday, as lawmakers ramp up efforts to rein in health-care costs for Americans. 

The Senate Health, Education, Labor and Pensions Committee’s hearing is scheduled for Feb. 8 at 10 a.m. ET.  

The panel had planned to vote to subpoena J&J CEO Joaquin Duato and Merck CEO Robert Davis to testify after both executives declined earlier requests to appear at the hearing. Those subpoenas would have been the first issued by the committee since 1981. 

Meanwhile, Bristol Myers Squibb CEO Chris Boerner and another unnamed pharmaceutical CEO agreed to initial invitations to testify. 

The panel will ask each executive to provide testimony about why their companies charge substantially higher prices for medicine in the U.S. than in other countries. The push to cut drug prices is one of the rare issues that has united both major political parties in recent years — though they have often backed different approaches to doing so.

Sanders, who chairs the Senate Health panel, noted that all three companies manufacture some of the most expensive drugs sold in the U.S., including Merck’s diabetes drug Januvia, J&J’s blood cancer treatment Imbruvica and Bristol Myers Squibb’s blood thinner Eliquis. 

All three of those treatments will be subject to the first round of Medicare drug price negotiations, a key policy under President Joe Biden’s Inflation Reduction Act that aims to make costly medications more affordable for seniors. J&J, Merck and Bristol Myers Squib are all suing to halt the talks, which will establish new prices that will go into effect in 2026. 

“I hope very much that the CEOs of these major pharmaceutical companies will take a serious look at these incredible price discrepancies and work with us to substantially reduce the prices they charge the American people for these and other prescription drugs,” Sanders said in a statement Friday. 

In a statement, a Merck spokesperson said “we trust that this will be a productive hearing aimed at enhancing the committee’s understanding of the pharmaceutical industry and finding common sense solutions to the challenges facing patients.”

The company had offered its U.S. president as a witness, arguing that official was better equipped to field questions about drug pricing, according to the spokesperson. But the committee declined.

A spokesperson for J&J said the company looks forward to “building an understanding of our longstanding efforts to improve affordability and access to medicines.”

Last year, the Senate Health Committee similarly heard testimony from the CEOs of Moderna, Eli Lilly, Novo Nordisk and Sanofi on high drug prices. 

Trump should pay E. Jean Carroll $83.three million in defamation trial

E. Jean Carroll and her attorneys Shawn Crowley and Roberta Kaplan react outside the Manhattan Federal Court, after the verdict in the second civil trial after she accused former U.S. President Donald Trump of raping her decades ago, in New York City, U.S., January 26, 2024. 

Brendan Mcdermid | Reuters

A federal jury on Friday said Donald Trump must pay E. Jean Carroll a total of $83.3 million in damages for defaming her in statements he made as president after the writer said he had raped her in a New York department store in the 1990s.

The massive civil verdict — which comes on top of a $5 million sexual abuse and defamation verdict that Carroll won against Trump last year — was delivered less than three hours after the nine-member jury began deliberating in U.S. District Court in Manhattan.

Trump was not in court for the reading of the unanimous verdict on compensatory and punitive damages by the anonymous jury at 4:40 p.m. ET.

But shortly afterward, he said in a social media post that he would appeal it.

“This is a great victory for every woman who stands up when she’s been knocked down, and a huge defeat for every bully who has tried to keep a woman down,” Carroll said in a statement.

E. Jean Carroll hugs her team after the verdict was read during the second civil trial where Carroll accused former U.S. President Donald Trump of raping her decades ago, at Manhattan Federal Court in New York City, U.S., January 26, 2024, in this courtroom sketch. 

Jane Rosenberg | Reuters

Her attorney Roberta Kaplan said, “Today’s verdict proves that the law applies to everyone in our country, even the rich, even the famous, even former presidents. There is a way to stand up to someone like Donald Trump who cares more about wealth, fame, and power than respecting the law.”

Jurors awarded Carroll $7.3 million in compensatory damages for emotional harm, and an additional $11 million in compensatory damages for harm to her reputation. Compensatory damages are awarded for actual losses suffered by someone.

They awarded her an additional $65 million in punitive damages after finding that Trump in a June 21, 2019, statement about Carroll had “acted maliciously, out of hatred, ill will or spite, vindictively or out of wanton, reckless, or willful disregard of Ms. Carroll’s right.”

Trump in those comments and others since then has denied ever meeting Carroll, suggested she made her claim to sell a book, and said she was not “my type.”

Punitive damages are meant to punish wrongdoing by a defendant.

Earlier Friday, Carroll’s lawyer in her closing argument had urged jurors to award her a “very large” amount of money, to make the billionaire former president “stop” slandering her.

“He doesn’t care about the law or truth but does care about money, and your decision on punitive damages is the only hope that he stops,” Kaplan said.

Former U.S. President Donald Trump gestures to his supporters, as he departs for his second civil trial after E. Jean Carroll accused Trump of raping her decades ago, outside a Trump Tower in the Manhattan borough of New York City, U.S., January 26, 2024. 

Eduardo Munoz | Reuters

“How much will it take to make him stop? You cost him lots and lots of money,” she said.

Trump in a social media post on his TruthSocial site after the verdict wrote, “Absolutely ridiculous!”

“I fully disagree with both verdicts, and will be appealing this whole Biden Directed Witch Hunt focused on me and the Republican Party,” wrote Trump, who is the frontrunner for the GOP presidential nomination.

“Our Legal System is out of control, and being used as a Political Weapon. They have taken away all First Amendment Rights. THIS IS NOT AMERICA!”

Trump so far has not received much help from appeals courts in challenging the two separate lawsuits by Carroll before they went to trial.

But it is possible that on appeal of the verdicts he could at least win a reduction in the amount of money he owes her.

Last month, the 2nd Circuit U.S. Court of Appeals rejected Trump’s argument that he was immune from damages in the current case because he was president at the time he defamed Carroll.

The appeals court ruled that Trump had waived the potential defense of presidential immunity for not raising it for years after Carroll first sued him in 2019.

Trump last year posted $5.6 million as security while he appeals the verdict in the prior sex abuse and defamation case.

When he appeals the current case’s verdict, he will likely have to post more than $90 million in security.

Until the appeals are resolved, Carroll will not collect any money from Trump.

Former U.S. President Donald Trump walks out during attorney Roberta Kaplan’s closing argument, during E. Jean Carroll’s second civil trial as Carroll accused Trump of raping her decades ago, at Manhattan Federal Court in New York City, U.S., January 26, 2024, in this courtroom sketch.

Jane Rosenberg | Reuters

Judge Lewis Kaplan, who is not related to Roberta, told jurors before dismissing them from court: “My advice to you is that you never disclose that you were on this jury, and I won’t say anything more about it.”

Before their deliberations began, Judge Kaplan instructed them that they had to accept as facts that Trump “sexually assaulted” Carroll in the mid-1990s and defamed the writer in 2019.

“What remains for you to decide,” the judge said, is whether “Mr. Trump acted maliciously when he made his two statements” about Carroll.

“You must accept as true the facts as I explained to you as they have already been decided,” the judge said, referring to Trump’s sexual assault of Carroll and his slandering of her decades later.

Trump looked on during the instructions with a frown.

Earlier, Trump stalked out of the courtroom after Carroll’s lawyer began her closing argument, in which she urged jurors to award monetary damages “large enough that it will finally make him stop” slandering the writer.

Trump’s dramatic departure came minutes after the judge warned his lawyer Alina Habba that she was risking being tossed into jail before summations began in the case.

“The record will reflect that Mr. Trump just rose and walked out of the courtroom,” the judge said.

Trump returned about an hour later, after Carroll’s attorney finished her summation and just before his attorney began her closing argument.

Former U.S. President Donald Trump looks on as his attorney Alina Habba, delivers closing arguments during E. Jean Carroll’s second civil trial as Carroll accused Trump of raping her decades ago, at Manhattan Federal Court in New York City, U.S., January 26, 2024, in this courtroom sketch. 

Jane Rosenberg | Reuters

Carroll in a 2019 New York magazine article wrote that in the mid-1990s, Trump had raped her in a dressing room at Bergdorf Goodman department store on Fifth Avenue, just up the street from the Trump Tower, where he lived and worked.

Trump denied her allegation at the time, saying she had made it up.

Another Manhattan federal court jury last year found he had sexually abused Carroll in the attack and had defamed her in statements he made in late 2022 denying her claims.

Kaplan ruled later in 2023 that that jury’s verdict meant that jurors in the current trial would have to accept as legally established that Trump had sexually assaulted Carroll and had defamed her in his 2022 statements.

Trump on Friday posted several social media messages attacking Kaplan for rulings in the case, accusing the judge of having “absolute hatred of Donald J. Trump (ME!).” Trump’s Truth social account posted 14 times about Carroll when he was in the courtroom.

In her closing argument, Carroll’s lawyer Kaplan asked jurors to impose punitive damages on Trump for refusing to stop defaming Carroll even after a jury last year held him liable for doing so and ordered him to pay her $5 million.

Trump’s comments have sparked death threats and vicious emails and tweets directed at Carroll, the lawyer said.

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“The dollar amount has to be very large,” Roberta Kaplan said. “It is at least as much and probably much more than the $12 million” that the lawyer noted an expert witness had testified it could cost to repair Carroll’s reputation after Trump accused her of inventing her claim.

“Last trial, Donald J. Trump didn’t even bother to show up, but this trial where it is about damages he has been sure to be here and the one thing he cares about his money,” Kaplan said.

Trump “is worth billions of dollars, he said that under oath, he could pay a million dollars a day for 10 years and still have money in the bank,” Kaplan said.

“When you begin deliberations I encourage you to step back and think of bigger picture, a former president of the United States who sexually assaulted, defamed and continues to defame.”

Earlier, Trump’s lawyer Habba, who had already irked Judge Kaplan for showing up late in court, angered him when she persisted in arguing that defense lawyers should be able to show a slide to jurors during their summation that represented some tweets related to Carroll.

“You are not going to use a slide to represent how many tweets there were, you are not using that slide, period,” Judge Kaplan said.

When Habba said, “I need to make a record,” referring to putting her argument on the record, the judge issued his warning.

“You are on the verge of spending time in the lockup, now sit down!” the judge told Habba.

Kaplan snapped at Habba several more times during her closing argument, at one point telling her that if she continued pressing a particular point “there will be consequences.”

Former U.S. President Donald Trump’s attorney Alina Habba delivers closing arguments during E. Jean Carroll’s second civil trial, as Carroll accused Trump of raping her decades ago, at Manhattan Federal Court in New York City, U.S., January 26, 2024 in this courtroom sketch.

Jane Rosenberg | Reuters

In her summation, Habba said that Carroll “has failed to show she is entitled to any damages at all.”

“It is Ms. Carroll’s burden, not President Trump’s, to prove that his statements caused harm, and she failed to meet that burden, it is common sense,” Habba said.

The attorney also suggested that Carroll had made up her claims of receiving “thousands of threats.”

Carroll had testified that she deleted most of those threats, making them unavailable as evidence.

“Either Ms. Carroll is lying to you and those messages never existed in the first place or she deleted them and wants you to rely on them, and guess what, they are not here, and she has to give them to you to support her claim for damages, and that is a fact,” Habba said.

Habba also said that not only did Carroll “not suffer any emotional harm” after publishing her claim in 2019 about Trump raping her, “she was happier than ever.”

“She told Vanity Fair [magazine] that the support she received walking down the streets was heartwarming,” Habba said. “One of the most carefree and happy times of her life, that she was in a cocoon of love … does this sound like someone whose world has come crashing down, who can’t sleep?”

“She was enjoying the newfound attention she was receiving,” the lawyer said.

Before the arguments began and jurors entered the courtroom, the judge issued a warning.

“During closing arguments, no one is to say anything other than opposing counsel,” said Kaplan. “There are to be no interruptions or audible comments by anyone else and that will apply when I charge the jury and that will apply to counsel then as well.”

Carroll’s lawyers have complained during the trial about Trump making comments that were audible to jurors while sitting with his attorneys at the defense table.

Kaplan previously ruled that because of the prior verdict, there was no legal question that Trump defamed Carroll. That ruling left only the question of monetary damages remaining for the jury.

Trump during his very brief testimony in the trial Thursday said of Carroll’s claim, “I consider it a false accusation.”

Kaplan struck that testimony, in light of the prior jury’s verdict which found he had sexually abused Carroll.

Trump earlier this week defeated former United Nations Ambassador Nikki Haley in the Republican presidential primary in New Hampshire. Last week, he won the Iowa GOP caucuses.

Why children streaming content material is significant to subscriber development

Tinky-Winky, Laa-Laa, Dipsy and Po pose for a photo as the Teletubbies celebrate their 25th anniversary with the Lighting of the Iconic Empire State Building on April 26, 2022 in New York City.

John Lamparski | Getty Images Entertainment | Getty Images

“Tinky Winky. Dipsy. Laa-Laa. Po!”

Those four names, the iconic sing-song intro to the “The Teletubbies,” have graced household TVs for nearly 30 years. While the library of episodes hasn’t changed in decades, their role in American media has taken on new meaning in the age of streaming.

“Back in the day TV was a little simpler,” said Dean Koocher a television expert, who spent years bringing international kids shows, including “Teletubbies” and “The Wiggles,” to the Americas.

“Back then there were less gatekeepers, you know, there was PBS, Disney and Nickelodeon was kind of an upstart coming up,” Koocher told CNBC. “The good thing was, if you ever could get their eyeballs, you had a much bigger piece of the market, because there weren’t that many choices for kids.”

Now, shows aren’t just on traditional TV and there are far more places for parents and kids to find content. From YouTube and TikTok to dozens of streaming options, audiences don’t need to wait to watch their favorite shows. Saturday morning cartoons are now everyday-anytime cartoons.

And that’s good for streamers, too, especially as Wall Street profitability pressures mount.

Kids represent a unique demographic for the entertainment industry. Age-specific advertising laws mean companies can’t market directly to them in many cases, but their viewing habits — often favoring repetition of content — makes them exceptionally loyal consumers.

At a time when streaming services are eager to lure in new subscribers and decrease churn, having a hub for family-friendly content is one way to ensure paying members (i.e. parents) stick around.

“Kids and family-friendly content is critically important to both streaming acquisition and retention,” said Peter Csathy, founder and chair of advisory firm Creative Media. “Franchise family-friendly brands are welcomed by exhausted parents looking for some down time as their kids get their screen time.

“Once those kids are hooked on a show, they never leave and will not let their parents even think of leaving,” he added.

That’s vitally important for streaming services, especially as consumers grow more cost-conscious and weigh which services to keep month after month and which services to ditch before the next billing cycle.

In recent years, legacy media companies — like Disney, Warner Bros. Discovery, Universal and Paramount — have scrambled to compete with Netflix in the streaming realm. For a while, Wall Street was satisfied with high subscriber growth and the promise of profitability in the future. However, as ad revenue from linear TV continued to decline significantly, investors quickly reversed course, demanding more immediate earnings growth.

Rinse, repeat

The unique thing about kids content is that streamers don’t need a lot of it to keep kids occupied, said Koocher, who now runs Kidstream, a streaming service focused on providing kids aged 2 to 9 with appropriate, enriching content.

“Young kids don’t mind repetition,” he said, noting that while adults will watch a new season of a show and then largely move on to another, kids aren’t opposed to repeat viewings in a short span of time.

“Kids are notoriously obsessed with the franchise movies, shows and characters they love, and will watch them over and over and over again,” Csathy echoed.

This means streamers don’t need to license or create as much content to keep these viewers coming back each month.

Currently, adult-only original entertainment on streaming services outnumbers TV-G or TV-PG rated content by nearly 270%, according to a study from the Parents Television and Media Council published in October.

“Seeing that less than 15% of titles on the major streamers is reportedly family-friendly, seems to me that most major streamers don’t fully embrace this reality,” said Csathy. “Franchise content is something that would be smart to prioritize. Very smart.”

A number of major streaming services have kid-centric sections of their platforms for their proprietary kids TV productions, but many have also looked outside of Hollywood to license content from international production companies for U.S. audiences.

“A child in the U.K. or a child in France or a child in Australia or the U.S. have similar wants and needs at that young age,” said Koocher. It’s only as they mature that their taste in content begins to differ.

That’s why shows like “Bluey,” an Australian production, “Peppa Pig,” a British production, “Masha and the Bear,” a Russian production and “Miraculous: Tales of Lady Bug and Cat Noir,” a French production, have managed to perform well in their native countries as well as in America.

Girl watches “Peppa Pig” on iPad tablet laying in the sofa at home.

Artur Debat | Moment Mobile | Getty Images

Meanwhile, Koocher has found that kids today are still interested in old classics like “Barney,” “Thomas the Tank Engine,” “Madeline” and “Wallace and Gromit,” all of which are available on Kidstream.

Koocher’s platform, which costs $4.99 a month, is also home to newer programming like “Dot” from Randi Zuckerberg, sister of Meta founder Mark Zuckerberg; the animated problem-solving duo of “Bitz & Bob;” and the live-action animal show “Gudrun: The Viking Princess.”

The future of kids content

Amid a desire from parents for more content and educational options, there’s an opportunity for artificial intelligence to help speed up the animation process.

AI not only has the potential to hasten the animation process, but it also democratizes entry into the animation space.

“Generative AI will enable the streamers to generate new kid programming much faster and cheaper, which they absolutely will do,” Csathy said. “Originality and quality is sure to suffer, but the streamers will bank on the hope that kids won’t notice.”

For Kidstream, the focus remains on quality over quantity, Koocher said.

“We’re motivated by the parent or the caregiver, whoever’s buying the services, just to be happy,” he said.

The platform, which has been around since 2017, has more than 25,000 subscribers, a fraction of the major streaming platforms. But the company can get away with fewer viewers in part because it doesn’t need to spend exponentially on new content.

Koocher, who has three decades of experience in the kids TV space, has seen the transition away from linear programming and says that audiences don’t want to return to a time-based schedule in order to watch their favorite programs, with the exception of sports.

“I can see more niche channels developing where you can really super serve your customers, whether it’s, in our case, for parents of young children or for European crime dramas,” he said, alluding to established services like BritBox and horror streamer Shudder.

“On-demand streaming, I think, is definitely the way to go.”

Disclosure: Comcast is the parent company of NBCUniversal and CNBC.