Market Update
Europe Movers: Bilfinger, British Land, Novo Nordisk, Phoenix Group, QBeyond, Salzgitter, Tullow Oil
Inga Muller
13 Nov, 2023
Frankfurt
European markets advanced in Monday's trading, and investors awaited the release of inflation data from the eurozone and the U.S.
The DAX index increased 0.5% to 15,309.01, the CAC-40 index advanced 0.7% to 7,093.52, and the FTSE 100 index added 0.6% to 7,406.19.
The yield on 10-year German bonds increased to 2.70%, French bonds traded higher to 3.27%, the UK gilts edged up to 4.31%, and Italian bonds inched lower to 4.53%.
Bilfinger SE added 1.9% to €36.02 after the civil and industrial construction and engineering company reiterated its annual outlook.
Revenue in the third quarter increased 7% to €1.1 billion, driven by a double-digit growth in the engineering and maintenance segment in Europe and the planned decrease in the U.S.
Net income increased 67% to 37 million from 22 million, and diluted earnings per share rose to 98 cents from 56 cents a year ago.
Bilfinger expects 2023 annual revenue of between €4.3 billion and €4.600 billion, compared to €4.3 billion a year ago.
The group’s profitability is expected to increase, with an EBITA margin between 3.8% and 4.1% compared to 1.8% in 2022.
Free cash flow is forecast to be between €50 million and €80 million, compared to €136 million in 2022, because of cash outflows of around €60 million in 2023 to implement the efficiency program, and capital expenditures are expected to return to a normal level of around 1.5% of revenue.
Salzgitter AG jumped 3% to €26.06 after the specialty steel company confirmed its fiscal year 2023 annual estimate.
Revenue in the first nine months declined to €8.4 billion from €9.8 billion, due to a downturn in shipment volumes and the lower average selling prices of many rolled steel products compared with the year-earlier period.
The after-tax result dropped to €193.7 million from €945.8 million, and basic earnings per share fell to €3.51 from €17.40.
Return on capital employed, or ROCE, amounted to 6.5% from 22.9%, and net debt declined by around €400 million from a year ago.
The company forecasted annual sales of 11 billion, operating earnings between €650 million and €700 million, pre-tax profit between €200 million and €250 million, and return on capital "notably below" previous year's level.
Q.Beyond AG decreased 1.6% to €0.60 after the German software company reported a wider loss in the first nine months of the year.
The British Land Company soared 4.8% to 328.70 pence after the real estate company reported strong first-half results.
Tullow Oil plc soared 8% to 32.84 pence after the oil explorer entered into a five-year loan agreement with Glencore Energy UK Ltd.
Phoenix Group Holdings PLC advanced 6% to 492.40 pence after the UK-based insurance company lifted its cash generation target.
The company estimated cash generation at the upper end of the previously announced range between £1.3 billion and £1.4 billion.
The company declared a cash dividend of 26 pence per share, an increase of 5% from a year ago.
Insurance revenue increased to £2.9 billion from £2.6 billion, and loss attributable to shareholders declined to £245 million from £1.2 billion, and diluted loss per share fell to 27.1 pence from 130.4 pence a year ago.
Novo Nordisk AS advanced 3.2% to DKK 713.50 on a report that a trial showed its obesity drug Wegovy lowered the death risk.
The company announced the overall results of the trial in August but released details of the trial on Saturday at an industry conference organized by the American Heart Association.
The company asserted that overall cardiovascular problems declined by 20%, cardiovascular-related death by 15%, and heart strokes by 7%.
The trial covered 17,600 patients with obesity and existing heart disease without diabetes, and the trial did not look at the reasons for cardiovascular benefits and how much of that was contributed by weight loss.
European Markets Advanced, German Current Account Surplus Widened
Bridgette Randall
13 Nov, 2023
Frankfurt
European markets advanced on the first day of this week, and bond yields hovered near two-month lows.
Benchmark indexes in Frankfurt, London, and Paris edged higher after mixed trading in the previous week.
The CAC-40 index declined for the first time after advancing for seven weeks in a row, and market indexes in Frankfurt struggled to extend this year's gain.
Investors also looked ahead to inflation data from the U.S. and Eurozone later in the week.
German Current Account Surplus Expanded
Germany's current account surplus widened to €28.1 billion from €12.5 billion a year ago, the Bundesbank reported Monday.
The goods surplus soared to €22.5 billion from €11.1 billion, reflecting an 18.6% decline in imports and a 9.2% fall in exports, but the service sector deficit declined to €6.1 billion from €6.5 billion.
The primary income surplus rose to €15.8 billion from €12.4 billion, and the secondary income deficit fell to €4.0 billion from €4.5 billion a year ago.
Europe Indexes and Yields
The DAX index increased 0.5% to 15,309.01, the CAC-40 index advanced 0.7% to 7,093.52, and the FTSE 100 index added 0.6% to 7,406.19.
The yield on 10-year German bonds increased to 2.70%, French bonds traded higher to 3.27%, the UK gilts edged up to 4.31%, and Italian bonds inched lower to 4.53%.
The euro rebounded to $1.069, the British pound at $1.22, and the U.S. dollar at 90.20 Swiss cents.
Brent crude increased $0.02 to $81.44 a barrel, and the Dutch TTF natural gas edged lower by €1.76 to €44.86 per MWh.
Europe Stock Movers
Bilfinger SE added 1.9% to €36.02 after the civil and industrial construction and engineering company reiterated its annual outlook.
Salzgitter AG jumped 3% to €26.06 after the specialty steel company confirmed its fiscal year 2023 annual estimate.
Q.Beyond AG decreased 1.6% to €0.60 after the German software company reported a wider loss in the first nine months of the year.
The British Land Company soared 4.8% to 328.70 pence after the real estate company reported strong first-half results.
Tullow Oil plc soared 8% to 32.84 pence after the oil explorer entered into a five-year loan agreement with Glencore Energy UK Ltd.
Phoenix Group Holdings PLC advanced 6% to 492.40 pence after the UK-based insurance company lifted its cash generation target.
The company estimated cash generation at the upper end of the previously announced range between £1.3 billion and £1.4 billion.
The company declared a cash dividend of 26 pence per share, an increase of 5% from a year ago.
Insurance revenue increased to £2.9 billion from £2.6 billion, and loss attributable to shareholders declined to £245 million from £1.2 billion, and diluted loss per share fell to 27.1 pence from 130.4 pence a year ago.
Novo Nordisk AS advanced 3.2% to DKK 713.50 on a report that a trial showed its obesity drug Wegovy lowered the death risk.
The company announced the overall results of the trial in August but released details of the trial on Saturday at an industry conference organized by the American Heart Association.
The company asserted that overall cardiovascular problems declined by 20%, cardiovascular-related death by 15%, and heart strokes by 7%.
The trial covered 17,600 patients with obesity and existing heart disease without diabetes, and the trial did not look at the reasons for cardiovascular benefits and how much of that was contributed by weight loss.
U.S. Movers: Doximity, Trade Desk, Wynn Resorts
Scott Peters
10 Nov, 2023
New York City
Wynn Resorts decreased 5% to $86.0 after the casino operator reported better-than-expected revenue and earnings in its latest quarter but investors focused on the decline in revenue at its Boston property.
Revenue in the third quarter increased to $1.7 billion from $889 million; net loss shrank to $120.5 million from $207.9 million; and diluted loss per share fell to $1.03 from $1.27 a year ago.
Revenue at casino properties located in Macau rebounded following the resumption of travel after the end of COVID restrictions.
Operating revenue at Wynn Palace rose to $524.8 million from $75.2 million, and at Wynn Macau, it jumped to $295.0 million from $40.4 million a year ago.
Las Vegas operations also showed sustained revenue growth in the quarter.
Operating revenue increased to $619 million from $544.4 million, and the table game win percentage for the third quarter was 26%, falling near the upper end of its expected range between 22% and 26%.
Operating revenue at Encore Boston Harbor decreased to $210.4 million from $211.8 million, and table game win percentage decreased to 20.8% from 21.1% a year ago.
Trade Desk plunged 24% to $58.41 after the company reported third-quarter results and offered a cautious outlook.
Revenue increased 25% to $493 million from $395 million, net income advanced to $39 million from $16 million, and diluted earnings per share rose to 8 cents from 3 cents a year ago.
The company repurchased $90 million of Class A common stock in the third quarter, and as of the end of September, the company had $273 million available and authorized for its own stock repurchase.
The company estimated fourth-quarter revenue of at least $580 million, a less-than-expected $600 million by some analysts, and adjusted operating earnings of $270 million.
Chief executive Jeff Green confirmed in the earnings call that advertisers have turned cautious in the automotive and consumer electronics industries.
"We saw some reduction in brand spend in verticals such as automotive and consumer electronics, for instance, specifically around cell phones and media and entertainment,” said Green.
“Some of these industries have been recently impacted by strikes, such as the U.S. auto industry,” Green added during the call with investors.
Doximity increased 16% to $23.81 after the company reported better-than-expected quarterly results.
Revenue in the fiscal 2024 second quarter ending in September increased 11% to $113.6 million from $102.2 million, net income jumped to $30.6 million from $26.3 million, and diluted earnings per share rose to 15 cents from 12 cents a year ago.
The company anticipated revenue in the fiscal third quarter ending in December in the range of $127 million and $128 million and adjusted EBITDA between $61 million and $62 million.
The healthcare professional company updated its full-year guidance to between $460 million and $472 million and adjusted EBITDA to between $207 million and $219 million.
At the time of announcing previous quarterly results, the company had estimated annual revenue between $452 million and $468 million and EBITDA between $193 million and $209 million.
The company's board authorized $70 million of its own stock repurchases over the next year.
U.S. Averages Attempt to Rebound, Treasury Yields In Focus
Barry Adams
10 Nov, 2023
New York City
The rebound in Treasury yields kept stock investors focused on the bond market after the broader market index rallied for eight sessions in a row.
The S&P 500 index and the Nasdaq Composite attempted to rebound after Federal Chair Jerome Powell commented that more work may be needed to cool inflation to 2%.
Chairman Powell reminded investors that interest rates may not be restrictive enough and that more rate hikes may be needed to cool inflation, but the policy committee will review the incoming data in total at one meeting at a time.
The comments halted the eight-day rally in the S&P 500 index and the nine-day advance in the Nasdaq Composite after the yield on 2-year Treasury notes rebounded above 5%.
Market indexes attempted to rebound in early trading and overlook the rise in Treasury yields, led by advances in tech companies and financial services providers.
U.S. Indexes and Yields
The S&P 500 index increased 0.4% to 4,375.14, and the Nasdaq Composite rose 0.4% to 13,682.03.
The yield on 2-year Treasury notes increased to 5.01%, 10-year Treasury notes inched higher to 4.60%, and 30-year Treasury bonds edged up to 4.72%.
Crude oil decreased $0.93 to $76.63 a barrel, and natural gas prices rose 2 cents to $3.03 a thermal unit.
Gold decreased $10.43 to $1,946.45 an ounce after bond yields edged lower and the dollar weakened.
The dollar index, which weighs the U.S. dollar against a basket of foreign currencies, edged lower to 105.52.
U.S. Stock Movers
Wynn Resorts decreased 5% to $86.0 after the casino operator reported better-than-expected revenue and earnings in its latest quarter.
Revenue in the third quarter increased to $1.7 billion from $889 million; net loss shrank to $120.5 million from $207.9 million; and diluted loss per share fell to $1.03 from $1.27 a year ago.
Revenue at casino properties located in Macau rebounded following the resumption of travel after the end of COVID restrictions.
Operating revenue at Wynn Palace rose to $524.8 million from $75.2 million, and at Wynn Macau, it jumped to $295.0 million from $40.4 million a year ago.
Las Vegas operations also showed sustained revenue growth in the quarter.
Operating revenue increased to $619 million from $544.4 million, and the table game win percentage for the third quarter was 26%, falling near the upper end of its expected range between 22% and 26%.
Operating revenue at Encore Boston Harbor decreased to $210.4 million from $211.8 million, and table game win percentage decreased to 20.8% from 21.1% a year ago.
Trade Desk plunged 24% to $58.41 after the company reported third-quarter results and offered a cautious outlook.
Revenue increased 25% to $493 million from $395 million, net income advanced to $39 million from $16 million, and diluted earnings per share rose to 8 cents from 3 cents a year ago.
The company repurchased $90 million of Class A common stock in the third quarter, and as of the end of September, the company had $273 million available and authorized for its own stock repurchase.
The company estimated fourth-quarter revenue of at least $580 million, a less-than-expected $600 million by some analysts, and adjusted operating earnings of $270 million.
Chief executive Jeff Green confirmed in the earnings call that advertisers have turned cautious in the automotive and consumer electronics industries.
"We saw some reduction in brand spend in verticals such as automotive and consumer electronics, for instance, specifically around cell phones and media and entertainment,” said Green.
“Some of these industries have been recently impacted by strikes, such as the U.S. auto industry,” Green added during the call with investors.
Doximity increased 16% to $23.81 after the company reported better-than-expected quarterly results.
Revenue in the fiscal 2024 second quarter ending in September increased 11% to $113.6 million from $102.2 million, net income jumped to $30.6 million from $26.3 million, and diluted earnings per share rose to 15 cents from 12 cents a year ago.
The company anticipated revenue in the fiscal third quarter ending in December in the range of $127 million and $128 million and adjusted EBITDA between $61 million and $62 million.
The healthcare professional company updated its full-year guidance to between $460 million and $472 million and adjusted EBITDA to between $207 million and $219 million.
At the time of announcing previous quarterly results, the company had estimated annual revenue between $452 million and $468 million and EBITDA between $193 million and $209 million.
The company's board authorized $70 million of its own stock repurchases over the next year.
Europe Movers: Allianz, Diageo, Red Row, Resource Stocks, Richemont, SCOR
Inga Muller
10 Nov, 2023
Frankfurt
European markets trimmed weekly gains after interest rate hikes worries resurfaced following comments from central bankers.
The DAX index decreased 0.7% to 15,251.96, the CAC-40 index fell 0.9% to 7,049.25, and the FTSE 100 index fell 1.2% to 7,365.17.
The yield on 10-year German bonds increased to 2.73%, French bonds traded higher to 3.31%, the UK gilts edged up to 4.34%, and Italian bonds inched lower to 4.59%.'
Resource and mining stocks turned lower after prices of copper, iron ore, gold, and silver declined between 0.2% and 1.0%.
Antofagasta plc fell 2.8% to 1,288.0 pence, Anglo American plc decreased 3.5% to 1,288.0 pence, and Glencore PLC declined 1% to 425.65 pence.
Richemont SA declined 6.3% to CHF 105.40 after the Swiss luxury company reported weaker-than-expected third-quarter results.
Diageo plc plunged 16.2% to 2,720.0 pence after the alcoholic beverage maker said operating profit growth will slow in the first half of the fiscal year.
The company said sales in Latin America and the Caribbean, which account for 11% of total sales, are facing macroeconomic headwinds and customers are preferring cheaper alternatives.
Diego stock plunged after the company made a surprise announcement, reversing the earlier forecast of "gradual improvement" in sales growth.
The company still estimates sales growth improvement in North America, but sales in Europe and Asia Pacific continued to grow at a slower pace than in the previous half.
Redrow plc dropped 5.2% to 492.80 pence after the UK-based homebuilder said revenue and profit would be near the lower end of the previously announced range.
Allianz SE rose 2.2% to €227.40 after the German insurance company confirmed its 2023 operating profit target.
SCOR SE declined 5.5% to €26.46 after the tier 1 reinsurance company said quarterly gross premium declined to €4.87 billion from €5.14 billion a year ago.
European Markets Trimmed Weekly Gains, UK Economy Stalled In Third Quarter
Bridgette Randall
10 Nov, 2023
Frankfurt
European markets fell after rate hike worries resurfaced following hawkish comments from central bankers.
Benchmark indexes in Frankfurt, Paris, and London declined between 0.5% and 1.2%, and bond yields rebounded following comments from Federal Reserve Chairman Jerome Powell.
Powell commented during an IMF panel discussion in Washington, DC, that it is too early to conclude that interest rate hikes are not needed to bring down inflation to the target rate of 2%.
His comments sparked a selloff in U.S. Treasury notes in late Thursday's trading, and European bond yields rebounded in Friday's trading.
UK GDP Stagnates in the Third Quarter
In other economic news, the UK's GDP in the third quarter stagnated from the previous quarter, the Office for National Statistics reported Friday.
A year ago, GDP expanded by 0.6%.
The GDP estimate matched the Bank of England's forecast released earlier in the month.
The economy expanded at the slowest pace in four months, and the service output declined by 0.1%, but the production output was nearly flat.
High interest rates and elevated prices kept consumer spending in check and negatively impacted business investments.
On the expenditure side, an increase in the volume of net trade was offset by a 4.2% decline in business investment, a 0.4% fall in household spending, and a 0.5% decrease in government consumption.
Europe Indexes and Yields
The DAX index decreased 0.7% to 15,251.96, the CAC-40 index fell 0.9% to 7,049.25, and the FTSE 100 index fell 1.2% to 7,365.17.
The yield on 10-year German bonds increased to 2.73%, French bonds traded higher to 3.31%, the UK gilts edged up to 4.34%, and Italian bonds inched lower to 4.59%.
The euro rebounded to $1.067, the British pound at $1.22, and the U.S. dollar at 90.18 Swiss cents.
Brent crude increased $0.88 to $80.89 a barrel, and the Dutch TTF natural gas edged lower by €2.04 to €46.09 per MWh.
Europe Stock Movers
Resource and mining stocks turned lower after prices of copper, iron ore, gold, and silver declined between 0.2% and 1.0%.
Antofagasta plc fell 2.8% to 1,288.0 pence, Anglo American plc decreased 3.5% to 1,288.0 pence, and Glencore PLC declined 1% to 425.65 pence.
Richemont SA declined 6.3% to CHF 105.40 after the Swiss luxury company reported weaker-than-expected third-quarter results.
Diageo plc plunged 16.2% to 2,720.0 pence after the alcoholic beverage maker said operating profit growth will slow in the first half of the fiscal year.
The company said sales in Latin America and the Caribbean, which account for 11% of total sales, are facing macroeconomic headwinds and customers are preferring cheaper alternatives.
Diego stock plunged after the company made a surprise announcement, reversing the earlier forecast of "gradual improvement" in sales growth.
The company still estimates sales growth improvement in North America, but sales in Europe and Asia Pacific continued to grow at a slower pace than in the previous half.
Redrow plc dropped 5.2% to 492.80 pence after the UK-based homebuilder said revenue and profit would be near the lower end of the previously announced range.
Allianz SE rose 2.2% to €227.40 after the German insurance company confirmed its 2023 operating profit target.
SCOR SE declined 5.5% to €26.46 after the tier 1 reinsurance company said quarterly gross premium declined to €4.87 billion from €5.14 billion a year ago.