T - Wall Street Breakfast Podcast: Epic Games Wins Antitrust Fight Against Google

2023-12-12 06:52:46 ET

Summary

• Epic Games wins its antitrust case against Google, with the jury finding that Google's app store operates as an illegal monopoly.
• Hasbro announces plans to cut 900 positions as part of a cost-cutting plan.
• Nokia lowers its profit margin target after losing a contract with AT&T.

Listen below or on the go on Apple Podcasts and Spotify

Epic Games wins antitrust fight against Google ( GOOG ) ( GOOGL ) over app store monopoly. (00:23) Hasbro ( HAS ) to cut 900 jobs as it seeks to cut expenses. (01:51) Nokia ( NOK ) trims 2026 profit margin target after losing AT&T ( T ) contract. (02:37)

This is an abridged transcript of the podcast.

The trial lasted four weeks but the verdict took only three hours.

Epic Games, which makes the popular video game Fortnite, has won its high-profile antitrust case against Alphabet's (NASDAQ: GOOG ) (NASDAQ: GOOGL ) Google.

The jury found that Google’s app store is operating as an illegal monopoly.

The jury on Monday found that Google ( GOOG ) ( GOOGL ) had monopolized the Android app distribution and payments market by charging app developers high fees of up to 30% and striking side deals with rivals to fend off competition.

The court will now decide if Google ( GOOG ) ( GOOGL ) should allow payment and app distribution outside the Play store.

"The verdict is a win for all app developers and consumers," said Epic on its website . "The evidence presented in this case demonstrates the urgent need for regulations that address Apple ( AAPL ) and Google ( GOOG ) ( GOOGL ) strangleholds over smartphones."

Google ( GOOG ) ( GOOGL ) intends to appeal the verdict. "We will continue to defend the Android business model," a company spokesperson said in a statement.

Epic's legal victory threatens the billions of dollars of revenue that Google ( GOOG ) ( GOOGL ) earns through its app store. If the jury's verdict is upheld, developers could have more power over the distribution of and profits from their apps.

The win is also important in light of Epic's loss last year against Apple ( AAPL ) in a similar antitrust case, after a judge ruled that there was not enough evidence of the iPhone maker having unlawful monopoly power.

Hasbro Inc. (NASDAQ: HAS ) has announced plans to eliminate 900 "incremental" positions as part of a cost-cutting plan.

The 900 positions will be eliminated over the next 18 to 24 months, the toymaker disclosed in an 8-K filing on Monday.

In connection with the cost-cutting efforts, Hasbro ( HAS ) accrued $94 million of expenses related to severance, stock compensation, and employee benefits and expects to accrue $40 million of incremental severance-related expenses.

The newest round of job cuts comes after Hasbro ( HAS ) announced in January the elimination of approximately 15% of its global workforce this year as part of a large-scale organizational restructuring.

Premarket Hasbro is down 3.9%.

Nokia (NYSE: NOK ), which recently lost a major U.S. contract, has lowered its comparable operating margin target to at least 13% by 2026 from at least 14% previously, citing ongoing 5G market challenges.

Nokia ( NOK ) said it still sees a path to achieving the "at least 14% comparable operating margin target but considering the current market conditions in Mobile Networks, this is deemed a prudent change."

Shares of the Finnish telecom equipment maker fell to their lowest point in 3.5 years last week, after it lost out on AT&T's ( T ) Open RAN contract for up to $14B of cell tower equipment to Swedish supplier Ericsson ( ERIC ).

Nokia ( NOK ) said AT&T's ( T ) decision to concentrate its radio network around a single vendor will lower its Mobile Networks' net sales next year.

Nokia ( NOK ) added that the spending environment for its Mobile Networks business remains challenging due to market decline in 2023 and a normalization in India in 2024 after rapid 5G deployment.

Premarket Nokia is up 2.2%.

Other articles to look out for on Seeking Alpha:

Walgreens slips as Moody’s cuts rating to junk

Harbor Custom Development files for Chapter 11 bankruptcy

Warren Buffett's Berkshire Hathaway halves stake in HP

COP28 draft agreement said to avoid fossil fuel ‘phase out’

On our catalyst watch for the day,

• The IPO lockup period for blocks of shares of CAVA Group ( CAVA ) will expire. Shares of CAVA have seen some selling pressure already ahead of the lockup expiration on concerns that some insiders will cash out.

U.S. stocks on Monday kicked off a packed week with small gains, as investors prepared for key inflation data along with a host of central bank decisions.

The Nasdaq ( COMP.IND ) added 0.20%. The S&P 500 ( SP500 ) climbed 0.39%. The Dow ( DJI ) rose 0.43%.

Ten of the 11 S&P sectors ended in the green. Communication Services was the exception.

Now let’s take a look at the markets as of 6 am. Ahead of the opening bell today, Dow, S&P and Nasdaq futures are pointing higher. The Dow is up 0.1%, the S & P 500 is up 0.1% and the Nasdaq is up 0.1%. Crude oil is down 0.1% at more than $71 per barrel. Bitcoin is down 1.3% and less than $42,000.

In the world markets, the FTSE 100 is up 0.3% and the DAX is down 0.1%.

The biggest movers for the day premarket: Blue Bird (NASDAQ: BLBD ) is up 7% after the company exceeded expectations in FQ4 results with top-line growth of ~18% Y/Y. And Oracle (NYSE: ORCL ) is down 9% after reporting mixed 2Q24 results , missing the top-line consensus mark.

On today’s economic calendar:

• 8:30 a.m. The consumer price index report for November will be released. Economists forecast a drop in the November year-over-year inflation rate to +3.1% from +3.2% in October. Core CPI is seen coming at +4.0% year-over-year.

• FOMC meeting begins today

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