Watch CNBC's full interview with Johnson & Johnson chairman and CEO Joaquin Duato
CNBC's Angelica Peebles and Johnson & Johnson chairman and CEO Joaquin Duato join 'Squawk Box' to discuss the company's 5-year multiple myeloma treatment study, the company's cancer treatments, M&A outlook, 'most favored nation' pricing, and more.
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CNBC
2 hours ago
- CNBC
The global economy faces many headwinds, but the aviation industry is expected to defy them
The global economy may be facing an uncertain 2025 in light of trade tensions and geopolitical conflicts, but there's a bright spot that investors can take solace in: aviation. The profitability of the aviation industry is expected to improve in 2025, despite global gross domestic product growth being forecast to drop to 2.5% in 2025 from 3.3% in 2024, according to the International Air Transport Association. In a report released on Monday, the IATA said revenue, operating profits and net profits of the industry are expected to increase from 2024, although some of those were lower than projections made in December. For example, net profits for the industry are projected at $36 billion for 2025, up from the $32.4 billion earned in 2024, but slightly lower than the December projection of $36.6 billion. The aviation industry's net profit margin is also forecast to rise to 3.7% in 2025, from 3.4% the previous year. Total revenues are projected to hit a record high of $979 billion, 1.3% higher than the previous year, but down from the $1 trillion in its last forecast. The IATA attributed the better results mainly to two factors: lower jet fuel costs and greater efficiency. It expects passenger load factors will reach an all-time high in 2025 with a full-year average of 84%, "as fleet expansion and modernization remains challenging amid supply chain failures in the aerospace sector." PLF shows how efficiently an airline is filling its seats. Jet fuel costs are expected to average $86 per barrel in 2025, down from $99 in 2024, the IATA noted, saying it will translate into a total fuel bill of $236 billion, $25 billion lower than the $261 billion incurred in 2024. "Recent financial data show minimal fuel hedging activity over the past year, indicating that airlines will generally benefit from the reduced fuel cost. It is not expected that fuel will be impacted by trade tensions," IATA said. Airline CEOs told CNBC that airlines are holding up despite the uncertainty. Air India CEO Campbell Wilson told CNBC's Monica Pitrelli at the World Air Transport Summit over the weekend that 2025 has been "a year of surprises" for the airline, "whether it's politics, tariffs, geopolitics, [or] closer to home, some conflict issues."India and Pakistan recently closed their airspace to each other's aircraft after military strikes carried out by both sides in May. Pakistan planes are banned from Indian airspace till June 23, and Indian planes are barred from Pakistan till June 24. "Uncertainty is not helpful for business, but the underlying fundamentals of this market ... and the upside we see ahead of Air India is driving us forward, because we think there's massive opportunity to be realized," Wilson added. He said India is the third-largest air travel market in the world, and estimated that it's growing at an annual growth rate of 8% to 10%. "So if Indians start traveling... at the intensity of China, it's going to absolutely explode in volume internationally," he said. Adrian Neuhauser, president and CEO of Colombian flag carrier Avianca, said in an interview Sunday "When the world sneezes in any way ... Airlines just get sick very quickly."However, he said, Avianca's passenger load factors are still holding up and revenue has improved. "So the concern is there, but as of today, we're still seeing the numbers be there." North America is expected to generate the highest absolute profit among all regions in 2025, and the Asia-Pacific region is set to see the largest demand growth in 2025, with revenue per passenger kilometer projected to grow 9% year on year, the IATA said. Revenue passenger kilometers, or RPK, is a measure of the volume of passengers carried by an airline. The metric is used to assess airline performance and passenger demand. The IATA said that "if an airline sees a consistent increase in RPKs on a particular route over several months, this might prompt the carrier to increase flight frequency or deploy larger aircraft to meet growing demand — potentially boosting revenue and market share." It attributed strong passenger demand in the Asia-Pacific to the relaxation of visa requirements in several Asian countries, especially China, Vietnam, Malaysia and IATA did note, however, that the economic landscape poses some challenges, with the GDP forecast for the region, particularly China, having been lowered.
CNBC
8 hours ago
- CNBC
Oil giant BP seeks buyers for one of its crown jewels as it looks to stave off a takeover
Britain's BP appears to be attracting a number of possible buyers for its Castrol lubricants business as the struggling oil giant seeks to fend off a prospective takeover . Energy companies including India's Reliance Industries and Saudi Arabia's oil behemoth Aramco , as well as private equity firms Apollo Global Management and Lone Star Funds, have all been touted as suitors for BP's Castrol unit, according to Bloomberg , citing people familiar with the matter. It's thought the sale of Castrol could fetch between $8 billion to $10 billion. BP, which launched a strategic review of its Castrol unit in late February, declined to comment on the speculation. The reports come as BP remains firmly in the spotlight as a prime takeover target. The London-listed oil company recently sought to restore investor confidence by launching a fundamental strategic reset. BP's new direction included a green strategy U-turn and the divestment of $20 billion of assets by the end of 2027. Analysts described BP's Castrol unit as one of the "crown jewels" of its portfolio, noting that reports of interested buyers should be viewed positively as the firm's management look to deliver on the new strategy. Read more Oil giant BP is seen as a prime takeover target. Is a blockbuster mega-merger in the cards? BP to slash renewable spending and double down on fossil fuels BP profit falls sharply but CEO says oil major 'off to a great start' in strategy reset Maurizio Carulli, energy and materials analyst at wealth manager Quilter Cheviot, told CNBC that it remains unclear whether the divestment of Castrol would stave off a potential takeover, however. He cited three considerations an industrial buyer might look at. Firstly, Carulli said the level of BP's debt would decrease with the sale of its high-performance lubricants business, potentially making the firm more attractive to a prospective buyer. Ongoing macroeconomic uncertainty could also make it difficult for BP to sell Castrol at an attractive valuation, he added. This could subsequently have a negative effect on BP's valuation, making it a cheaper proposition for any possible suitor. Thirdly, Carulli cited the level of cost and revenues that another energy firm could extract from the purchase, adding that the sale of Castrol is unlikely to substantially affect BP given that it is a small part of its overall business. 'Point of maximum weakness' BP, which reported weaker-than-expected first-quarter profit, has faced renewed pressure from activist investors in recent months. In late April, for instance, U.S. hedge fund Elliott Management went public with a stake of more than 5% in the company. Elliott was first reported to have assumed a position in BP back in February, driving a share price rally amid expectations that its involvement could pressure the firm to shift gears back toward its oil and gas businesses. BP CEO Murray Auchincloss told CNBC's " Squawk Box Europe " on April 29 that the company was "off to a great start" in delivering on its strategic reset. He cited the firm's "highest upstream operating efficiency in history" and six recent oil and gas exploration discoveries. Lydia Rainforth, head of European energy, equity research at Barclays, said BP's future appears to be "really bright" — if the company can get through the next six months. "The sum of the parts is, I think, much greater than where the current share price is, but if I think about when that point of maximum weakness is for BP, it is over the next six months," Rainforth told CNBC's Steve Sedgwick on May 22. "As I get towards the end of the year, hopefully we will see some divestments taking down debt. Things like, they've talked about selling their lubricants business — that could raise $12 to $15 billion," she added. On the right track? Shares of BP, which have underperformed industry peers, are more than 20% lower over the last 12 months. The ongoing weakness has stoked speculation of a prospective tie-up with domestic rival Shell . U.S. oil giants Exxon Mobil and Chevron have also been touted as possible suitors. Shell has declined to comment on the speculation, while spokespersons for Exxon Mobil and Chevron have not previously responded to a request for comment. Russ Mould, investment director at AJ Bell, said shareholders are looking for BP to provide evidence that it can generate more cash to ensure net debt doesn't keep rising and buybacks and dividends can continue at current levels at the very least. Plans for $3 billion to $4 billion in asset sales and lower capital investment in 2025 are clearly part of BP's push to bring down net debt to between $14 billion and $18 billion by the end of 2027, Mould said. "Delivery here, perhaps via a successful disposal of Castrol, would help convince shareholders that BP is on the right track," Mould told CNBC via email. "But too many more quarters of weak cash flow and lower share buybacks may not help management's cause and lead to further engagement by the usually indefatigable Elliott."
Yahoo
11 hours ago
- Yahoo
Elon Musk caps off DOGE exit by leaving Trump and Johnson unpleasant parting gift
Elon Musk departed Washington this week, bringing one of the weirdest sagas in the history of the presidency to a close. Not everyone leaves DC with their reputation intact. But most people manage to get through it without their bladder control abilities making it into a New York Times exposé. So ends the Elon show. On Sunday, Washington saw its last gasp — a final, awkward sitdown between Musk and CBS Sunday Morning. Despite an awkward attempt by Musk to change the terms of the interview last-minute and bar any mention of politics, he answered questions about the end of DOGE and the budget reconciliation plan endorsed by Donald Trump, Speaker Mike Johnson and the majority of House Republicans. In his interview, Musk made it clear he hadn't gotten the memo that Johnson and other Republicans want their caucus to lie about the Congressional Budget Office (CBO) score, which the speaker and others are now unconvincingly pretending is a group of liberal activists. Meanwhile, conservatives in their own caucus — the same deficit hawks who held Johnson to cuts of nearly $1 trillion affecting Medicaid — continue to cite the CBO's methodology as they hammer Johnson and their colleagues for insufficient deficit spending cuts. Musk's comments on that budget bill, released in the lead-up to CBS's interview last week, set off a firestorm in Washington. There was an obvious reason: Musk, in one fell swoop, undermined the entirety of the budget plan and essentially made Johnson out to be a liar — if you believe Musk, who no longer has a reason to play nice in Washington. "I was, like, disappointed to see the massive spending bill, frankly, which increases the budget deficit, doesn't decrease it, and undermines the work that the DOGE team is doing,' Musk told CBS News. Musk's demeanor was similar to the eyebrow-raising performance he delivered during his final press conference this week with Donald Trump — when he seemed visibly distracted by the gold ornamentation of the room and stood in a decidedly odd manner next to the (literally) sitting president of the United States. "I think a bill can be big or it can be beautiful," he went on. "But I don't know if it could be both. My personal opinion." Oops. With that quote, Musk did damage that was still being felt on Sunday, when the rest of his interview aired. At practically the same moment that his comments were re-broadcast, Speaker Mike Johnson was facing an uncomfortable grilling from NBC's Meet the Press about the bill and whether it cut the deficit significantly, or even at all. "I sent my good friend Elon a long text message explaining it can be big and beautiful," Johnson claimed. He repeated his insistence that the bill is 'not going to add to the debt' during his own interview, despite the CBO's outlook. Certainly, the guy who brought the motto 'move fast and break things' to Washington is going to read that text. Regardless of how that particular conversation turns out, the damage is done. Johnson's problem is simple: his own caucus does not believe his insistence about the 'big, beautiful bill' being deficit-neutral. Why should anyone else? Johnson wishes it were as simple as convincing Americans (and the media) that Democrats are the only ones opposed to his deficit math. In reality, some of the staunchest debt hawks in Washington — all conservatives — are in the same camp. If one needs proof, they can simply ask Chip Roy, one of the leaders of those debt hawks. Roy, in his final statement about the bill's passage in May, explained that he voted for the bill to achieve deficit cuts — but even he lamented that the bill did not go further in that regard. 'The good news is that the bill technically held true to that framework by yielding modest deficit reduction over a 10-year budget window,' said Roy. 'Importantly, it does this by cutting spending $1.5 trillion over 10 years, reforming programs like Medicaid and SNAP with work requirements.' It should be obvious, but just to be clear: 'modest deficit reduction' does not equal a budget that is deficit-neutral. The 'one big, beautiful bill' is still projected to add nearly $4 trillion to the deficit after those cuts, according to the CBO and other analysts. This offhand comment from Musk won't make his life any harder. He returns to Tesla, now bearing the brunt of a stunning drop in profits tied directly to his political activism. By doing so, he exits an unfamiliar arena: Washington, a place where public perception matters and can change on a dime. It will, however, make things a lot harder for Johnson and Senate Republican leadership, the latter of whom will now oversee the bill's fate for the next month. Already, Republicans are talking about changing the bill — including, potentially, by splitting 'one' big beautiful bill into several. Those Senate Republicans only acquired more ammunition to defy the White House and Johnson on Sunday. One of those Republicans is Ron Johnson, who, like his conservative allies in the House, has been one of the most vocal deficit spending watchdogs in Congress. Even before Musk's latest comments, Johnson was publicly prepared to buck the White House over the bill's price tag. After Sunday, the combination of the Musk interview and the Senate's hair-thin margin may give him all the political cover he needs. 'Republican leaders repeatedly say, 'We don't have a revenue problem, we have a spending problem,'' Johnson tweeted before the bill passed the House. 'Right now, it doesn't appear that they are willing to fix it.' 'I am going to insist that we do,' he warned.
