Good morning, CFOs. Big banks beat profit and revenue forecasts; Royal Philips’ CFO talks tariffs; and Walmart is forming a partnership with OpenAI to let shoppers buy its products directly within ChatGPT.

Earnings at the big banks are pummeling expectations.

Dealmaking, trading and corporate lending are gaining steam and fueling profits at the nation’s biggest banks, with Goldman Sachs, JPMorgan Chase, Citigroup and Wells Fargo all beating third-quarter profit and revenue forecasts, according to my colleagues AnnaMaria Andriotis, Alexander Saeedy and Ben Glickman.

Goldman is on pace for its best year ever in its main investment-banking and markets division. JPMorgan is on track to make over $50 billion in annual profit for the second year in a row. And BlackRock is sitting on a record $13.5 trillion in assets under management. The strength is evident across many of the banks’ businesses, reflecting the enthusiasm in the stock market and corporate boardrooms.

• Goldman Sachs Plans Layoffs Despite Surging Profits
• JPMorgan’s Profit Jumps as Business Booms on Main Street, Wall Street
• BlackRock’s Assets Hit Record $13.5 Trillion After Market Rally, Dealmaking Spree

📆 Earnings

• Abbott Laboratories
• ASML Holding
• Bank of America
• Citizens Financial Group
• J.B. Hunt Transport Services
• Morgan Stanley
• PNC Financial Services Group
• Prologis
• United Airlines Holdings

📈 Economic Indicators

The Federal Reserve releases the beige book for the seventh of eight times this year.

Charlotte Hanneman, finance chief of Dutch healthcare-technology company Royal Philips, spoke to me recently about navigating President Trump’s tariffs, their biggest impact on her company and how it is managing inventory. Edited excerpts follow.

What’s been the tariff impact for the company so far?

Hanneman: Tariffs have impacted us quite significantly. Initially, earlier in the year, we announced an impact of €250 million to €300 million of tariffs after substantial mitigation. After the U.S. and EU trade agreements, we've been able to bring that down to €150 to €200 million, still very significant for 2025. So we are working very hard, as you can imagine. All kinds of mitigation strategies, including, for example, inventory forward-stocking, but also looking at our manufacturing footprint. We announced in August a $150 million expansion of our facility in Reedsville, Pa. The Reedsville plan certainly is part of that mitigation strategy.

How have you gone about reducing inventory?

Hanneman: For the past few years, we've been reducing inventory year over year over year. We thought that the tariff situation would increase our inventory and actually it hasn't. We've been managing that quite well, including making sure that any of the inventory forward stocking that we did was backed up by demand planning.

What are the most impactful ways in which you’re offsetting tariff costs?

Hanneman: The one I'd pull out is really the focus that we have on driving cost productivity. We had announced a few years ago already a productivity plan of €2 billion from 2023 to the end of 2025. In the beginning of this year, we upped that to €2.5 billion, meaning that we're finding productivity savings in cost savings of €800 million in 2025, which is very significant for us.

And how do we do that? Various different ways. We drive further simplification of our supply chain. We, for example, have reduced the number of transducers we sell in our ultrasound machines by 50%. That drives less quality costs, less R&D cost, less manufacturing costs.

Increasingly, we're also working on AI. On the one hand, we use it for AI-enabled simplicity, and as a result, cost savings. On the other hand, AI is really in almost every single one of our products that we sell, which also drives innovation and further efficiency there.

Walmart is forming a partnership with OpenAI to let shoppers buy its products directly within ChatGPT, the artificial-intelligence chatbot. It is a signal by the biggest U.S. retailer that online shopping is going to become a different experience from the retail websites we are used to.

For years, shoppers have used a search bar and browsed a long list of items, Walmart Chief Executive Doug McMillon said Tuesday. “That is about to change,” he said.

📰 Other headlines

• Trade Tensions Weigh on IMF’s Outlook for Global Economy
• China, Betting It Can Win a Trade War, Is Playing Hardball With Trump
• Embraer’s CEO Hopes for U.S.-Brazil Deal to Eliminate Aircraft Tariffs
• Grindr Confirms Buyout Interest From Top Investors
• How U.S. Pressured Netherlands to Oust CEO of Chinese-Owned Chip Maker
• Ford Cuts Production of Five Trucks, SUVs After Fire at Aluminum Supplier
• Powell Keeps Fed on Track to Lower Rates Again
• EU Antitrust Enforcer Fines Gucci, Chloe, Loewe More Than $180 Million After Pricing Probe
• Steven Rosenbush: AI Economics Are Brutal. Demand Is the Variable to Watch.
• Boeing’s $4.7 Billion Spirit Deal Cleared in EU, With Conditions
• Exclusive: Flexport Launches AI Tools to Tackle Tariffs
• Grocery Prices Keep Rising. Frustrated Consumers Are Trying to Adapt.
• The Rest of the World Is Following America’s Retreat on EVs

📈Earnings wrapup

• Domino’s Sales Rise as Stuffed Crust Pizza Boosts U.S. Orders
• Albertsons Lifts Outlook as Price Cuts, Private-Label Push Boost Sales
• LVMH Sales Pick Up in Ray of Light for Beleaguered Luxury Sector

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The Wall Street Journal's CFO Journal offers corporate leaders and professionals CFO analysis, advice and commentary to make informed decisions. We cover topics including corporate tax, accounting, regulation, capital markets, management and strategy.

Follow us on X @WSJCFO. The WSJ CFO Journal Team comprises reporters Kristin Broughton, Mark Maurer and Jennifer Williams, and Bureau Chief Walden Siew.

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