Market Update
Movers: Credit Suisse, Philips, Salzgitter, Software AG
Bridgette Randall
24 Apr, 2023
Frankfurt
Philips NV gained 11.2% to €19.28 after the consumer electronics and technology company reported higher operating earnings and sales in its first quarter.
Group sales increased 2% to €4.17 billion from €3.92 billion and adjusted EBITA increased to 359 million from 243 million a year ago.
Comparable sales increased 6% driven by a rise in double-digit sales in its diagnostics and treatment unit and low single-digit increase in sales in connected care businesses.
Net loss increased after the company set aside 575 million related to the settlement of a class action lawsuit stemming from the Respironics recall in the U.S.
Net loss expanded to 665 million from 151 million and loss per share rose to 75 cents from 14 cents a year ago.
Software AG soared 49.4% to €29.84 after the German software company agreed to a deal from the private equity firm Silver Lake.
Credit Suisse Group AG increased 2.1% to CHF 0.81 after the Swiss bank said net asset outflow in the first quarter was CHF 61 billion or $68 billion.
Revenue in the first quarter soared to CHF 18.5 billion from CHF 4.4 billion and net income attributable to shareholders swung to CHF12.4 billion from a loss of CHF273 million a year ago.
Diluted earnings per share was CHF3.08 compared to a 10 cents loss year ago.
The result primarily reflected the write-down to zero of CHF 15 billion of Additional Tier 1 capital notes as ordered by the Swiss Financial Market Supervisory Authority (FINMA) in light of the planned merger with UBS.
Adjusted revenue in the first quarter plunged 40% to CHF 2.7 billion from CHF 4.5 billion and the bank swung to a pre-tax net loss of CHF 1.3 billion from CHF 300 million a year ago.
"Customer deposits declined CHF 67 billion in the first quarter. These outflows, which were most acute in the days immediately preceding and following the announcement of the merger, stabilized to much lower levels, but had not yet reversed as of April 24, 2023," Credit Suisse noted in the earnings release.
Assets under management declined 19% to 1.25 trillion compared to 1.55 trillion a year ago.
Resource and energy companies traded lower after crude oil and natural gas prices eased on the demand worries.
BP Plc, TotalEnergies SE, Repsol SA, Shell Plc and Eni SpA dropped between 0.5% and 1.3% after Brent crude oil and natural gas prices eased.
Salzgitter AG decreased 0.2% to €36.82 after the German steel company said first quarter earnings plunged nearly 50% but the company reaffirmed its full-year outlook.
The company estimated profit in the first quarter of €183 million compared to €465 million in the similar period in 2022.
The company reiterated its 2023 sales of €13 billion compared to €12.6 billion in 2022 and earnings before interest, taxes, amortization and depreciation or EBITDA between €750 million and €850 million.
European Markets On Hold, German Business Confidence Improved
Bridgette Randall
24 Apr, 2023
Frankfurt
European markets traded in a tight range and investors digested a fresh batch of earnings amid lingering economic slowdown worries.
Market sentiment was cautious in trading in Paris, Frankfurt and London and investors reacted to domestic corporate earnings.
In cautious trading, resource and energy stocks led the decliners and tech stocks were in focus ahead of the release of earnings from mega-cap companies Meta, Alphabet, Amazon and Microsoft this week.
Across Europe, banks were in focus ahead of the earnings releases this week from Barclays, Credit Suisse, Deutsche Bank, Santander and UBS.
In the region's economic news, German business confidence showed an improvement for the sixth month in a row, Ifo Institute reported Monday.
The overall German IFO business climate index increased to 93.6 in April from 93.2 in March, the highest level since February last year.
The current situation index eased to 95.0 from 95.4 and expectations index, which tracks business outlook in the coming months, improved to 92.2 from 91.0 in March.
Indexes & Yields
The DAX index decreased 5.12 points to 15,876.54, the CAC-40 index dropped 9.51 points to 7,567.49 and the FTSE 100 index declined 4.73 points to 7,909.40.
The yield on 10-year German Bunds edged higher to 2.49%, French bonds to 3.05%, the UK gilts to 3.78% and Italian bonds to 4.36%.
The euro inched higher to $1.101, the British pound to $1.24 and Swiss franc to 88.96 cents.
Brent crude oil fell 14 cents to $81.51 and the Dutch TTF natural gas futures fell 74 cents to $39.42 per MWh.
Europe Stock Movers
Philips NV gained 11.2% to €19.28 after the consumer electronics and technology company reported higher operating earnings and sales in its first quarter.
Group sales increased 2% to €4.17 billion from €3.92 billion and adjusted EBITA increased to 359 million from 243 million a year ago.
Comparable sales increased 6% driven by a rise in double-digit sales in its diagnostics and treatment unit and low single-digit increase in sales in connected care businesses.
Net loss increased after the company set aside 575 million related to the settlement of a class action lawsuit stemming from the Respironics recall in the U.S.
Net loss expanded to 665 million from 151 million and loss per share rose to 75 cents from 14 cents a year ago.
Software AG soared 49.4% to €29.84 after the German software company agreed to a deal from the private equity firm Silver Lake.
Credit Suisse Group AG increased 2.1% to Sfr 0.81 after the Swiss bank said net asset outflow in the first quarter was Sfr 61 billion or $68 billion.
Resource and energy companies traded lower after crude oil and natural gas prices eased on the demand worries.
BP Plc, TotalEnergies SE, Repsol SA, Shell Plc and Eni SpA dropped between 0.5% and 1.3% after Brent crude oil and natural gas prices eased.
Salzgitter AG decreased 0.2% to €36.82 after the German steel company said first quarter earnings plunged nearly 50% but the company reaffirmed its full-year outlook.
The company estimated profit in the first quarter of €183 million compared to €465 million in the similar period in 2022.
The company reiterated its 2023 sales of €13 billion compared to €12.6 billion in 2022 and earnings before interest, taxes, amortization and depreciation or EBITDA between €750 million and €850 million.
U.S. Investors Confront Weak Economic Growth and Weaker Earnings
Barry Adams
21 Apr, 2023
New York City
Investors appeared to be in no hurry to buy stocks amid growing realization that higher interest rates are likely to stay longer and corporations may have to operate with lower margins.
While investors debated the health of the U.S. economy and how that will impact future earnings streams, some of the largest companies reported weakening sales and falling margins this week.
Most companies have been reporting surging sales for the last two years in a row and many have benefitted by passing on price hikes greater than the increase in input costs.
But the cycle of double strikes, rising volumes and prices, appears to have started reversing, with the decline in unit sales most often mentioned in the earnings announcements.
If the economy enters into a recession, then the second strike of lower price will also dent earnings one more time, knocking the overall earnings lower than in 2019, pre-Covid levels.
Investors are still in the early guessing game of how far corporate profits have to decline and how low market valuations have to adjust to reflect new and lower future earnings trajectory.
Benchmark indexes are set to close down for the week but still up for the year as more economic data suggested this week that the U.S. economy is heading for a contraction.
Market averages are little changed after a week of earnings where most companies are reporting earnings that met lowered expectations.
About 210 companies have released earnings this week, but investor expectations may have to be revised lower in the event the economy slows down or even heads into a milder recession.
Jobless claims inched slightly higher, indicating labor market tightness but Conference Board's index of leading indicators declined suggesting that the economy is heading into a contraction.
Investors have still not adjusted earnings estimates in the event of an economic slowdown or even a mild recession, rendering broader averages vulnerable to more declines.
U.S. Indexes & Yields
The S&P 500 index edged up 1.24 points to 4,132.55 and the Nasdaq Composite index inched lower 2.43 points to 12,054.76.
The yield on 2-year Treasury notes inched lower to 4.11%, 10-year Treasury notes edged down to 3.50% and 30-year Treasury bonds traded at 3.73%.
Crude oil edged higher 72 cents to $78.11 a barrel and natural gas held at $2.24 a thermal unit.
U.S. Stock Movers
Procter & Gamble rose 3.7% to $156.50 after the consumer products maker reported better-than-expected quarterly results.
P&G said revenue in the fiscal third quarter ending in March increased 4% to $20.1 billion, driven by 10% increase in prices and 3% decline in volume.
Net income attributable to common stockholders increased 1% to $3.39 billion from $3.35 billion and diluted earnings per share rose to $1.37 from $1.33 a year ago.
The company revised its full-year sales guidance to increase 1% from the previous estimated range between decline of 1% and in-line.
CSX Corporation increased 2.8% to $31.69 after the railroad operator reported first quarter results.
Revenue increased 9% to $3.7 billion and net earnings rose 15% to $987 million from $859 million and diluted earnings per share rose to 48 cents from 39 cents a year ago.
PPG Industries increased 0.8% to $142.55 after the company lifted its full-year outlook.
Revenue increased 2% to $4.3 billion and net income soared to $264 million from $18 million and diluted earnings jumped to $1.11 from 8 cents a year ago.
The company guided flat sales in the second quarter and earnings per share between $1.92 and $2.02 and adjusted earnings per share in the full-year 20223 between $6.95 and $7.25, excluding amortization charges and non-cash pension settlement charges.
5th Weekly Gains In European Markets, Private Sector Activities Expanded
European markets struggled and investors digested a fresh batch of earnings amid growing economic anxieties.
The latest PMI surveys in the Euro Area and UK showed service sector growth accelerated in April but manufacturing remained under pressure on weakening demand for goods.
The HCOB Eurozone Composite PMI increased to 54.4 in April, highest in 11 months.
The HCOB Germany Composite PMI rose to 53.9 in April from 52.6 in March, indicating accelerating business activities in the private sector after service sector activities rose to a 12-month high.
The S&P Global/CIPS UK Composite PMI increased to 53.9 in April from 52.2 in March, indicating the fastest pace of expansion since April 2022.
The index above 50 indicates expansion and below 50 shows deceleration.
Investors also welcomed positive quarterly results from EssilorLuxottica and Mercedes Benz reported sharply higher industrial free cash flow.
Poor Weather Contributed to March Retail Sales Decline In UK
Retail sales in the U.K. fell more than expected in March, the Office for National Statistics reported Friday.
Poor weather contributed to stretched consumer budgets, negatively impacting retail sales.
March retail sales, including motor fuel, decreased 0.9% from the previous month after rising for two months in a row.
February retail sales growth was downwardly revised to 1.1% from the previous estimate of 1.2%.
Retail sales, excluding motor fuel, declined 0.6% from the previous month, after rising 2.1% in February.
Retail sales volume in the three months to March increased 0.6% from the previous three-month period.
Europe Indexes & Yields
European markets were in holding patten in Friday's trading but benchmark indexes are set to close higher for the fifth week in a row.
The DAX index increased 0.5% to 15,881.66, the CAC-40 index increased 0.5% to 7,577.0 and the FTSE 100 index added 0.1% to 7,914.13.
The yield on 10-year German Bunds eased to 2.44%, French bonds decreased to 2.96%, the UK gilts to 3.71% and Italian bonds to 4.32%.
The euro held at $1.096, the British pound at $1.284 and the Swiss franc
Brent crude edged up 6 cents to $81.16 a barrel and the Dutch TTF natural gas futures rose 24 cents to Є40.90 per MWh.
Europe Stock Movers
Glencore Plc decreased 1.1% to 496.54 pence and the resource company reported first quarter production that met investors' expectations.
Coal production declined 6% to 26.9 million tons and zinc production fell 15% to 205.3 kt or (thousands of tons) and copper production eased 5% to 244.1 kt.
Holcim AG declined 0.3% to Sfr 58.74 and the Swiss cement and construction materials company reiterated its full-year outlook.
Tele2 AB declined 1.1% to SEK 104.70 after the company reported less-than-expected 3% increase in first quarter revenue from a year ago.
Mercedes Benz Group AG rose 0.4% to €68.46 after the luxury automaker reported "strong" first quarter preliminary results.
Earnings before interest and taxes rose to €5.5 billion, largely driven by vans division and industrial free cash flow increased to €2.2 billion, surpassing market expectation of €1.2 billion.
SAP SE increased 1.3% to €117.14 after the German software company lowered its annual outlook following the sale of its Qualtrics unit.
EssilorLuxottica SA increased 6.6% to €187.0 after the French-Italian company reported a first quarter sales increase driven by the sales rebound in China.
Movers: CSX, HCA Healthcare, PPG Industries, Procter & Gamble, SLB
Scott Peters
21 Apr, 2023
New York City
CSX Corporation increased 2.8% to $31.69 after the railroad operator reported first quarter results.
Revenue increased 9% to $3.7 billion and net earnings rose 15% to $987 million from $859 million and diluted earnings per share rose to 48 cents from 39 cents a year ago.
HCA Healthcare Inc increased 5.1% to $284.67 after the hospital operator reported quarterly results that exceeded expectations.
Revenue in the first quarter increased 3% to $15.6 billion from $14.95 billion and net income edged up to $1.54 billion from $1.46 billion and diluted earnings per share advanced to $4.85 from $4.14 a year ago.
The company lifted its full-year revenue range between $62.5 billion and $64.5 billion from the previous outlook to between $61.5 billion and $63.5 billion.
Net income range was revised higher to between $4.76 billion and $5.16 billion from $4.525 billion and $4.895 billion.
Earnings per share range was revised higher to between $17.25 and $18.55 from the previous outlook between $16.40 and $17.60.
Procter & Gamble rose 3.7% to $156.50 after the consumer products maker reported better-than-expected quarterly results.
P&G said revenue in the fiscal third quarter ending in March increased 4% to $20.1 billion, driven by 10% increase in prices and 3% decline in volume.
Net income attributable to common stockholders increased 1% to $3.39 billion from $3.35 billion and diluted earnings per share rose to $1.37 from $1.33 a year ago.
The company revised its full-year sales guidance to increase 1% from the previous estimated range between decline of 1% and in-line.
PPG Industries increased 0.8% to $142.55 after the company lifted its full-year outlook.
Revenue increased 2% to $4.3 billion and net income soared to $264 million from $18 million and diluted earnings jumped to $1.11 from 8 cents a year ago.
The company guided flat sales in the second quarter and earnings per share between $1.92 and $2.02 and adjusted earnings per share in the full-year 20223 between $6.95 and $7.25, excluding amortization charges and non-cash pension settlement charges.
Schlumberger NV decreased 5.2% to $49.33 after the offshore oil field contractor said revenue increased 30% to $7.7 billion.
Net income in the quarter soared 83% to $934 million from $510 million and diluted earnings per share rose to 65 cents from 36 cents a year ago.
The oilfield services provider guided full-year 2023 capital expenditure between $2.5 billion and $2.6 billion, higher than $2.3 billion in 2022.
During the quarter the company repurchased 4.4 million of its shares at an average price of $52.65 a share totaling $230 million.
The company's board approved a quarterly cash dividend of $0.25 per share of outstanding common stock, payable on July 13 to stockholders of record on June 7.
Benchmark Indexes Head for Weekly Losses On Weakening Earnings Outlook
Barry Adams
21 Apr, 2023
New York City
Stocks on Wall Street rested as investors mulled over a week of earnings releases and economic data.
Benchmark indexes are set to close down for the week but still up for the year as more data suggest that the U.S. economy is heading for a contraction.
Market averages are little changed after a week of earnings where most companies are reporting earnings that met lowered expectations.
About 300 companies have released earnings so far but investor expectations may have to be revised lower in the event the economy slows down or even heads into a milder recession.
Jobless claims inched slightly higher, indicating labor market tightness but Conference Board's index of leading indicators declined suggesting that the economy is heading into a contraction.
Investors have still not lowered earnings estimates in the event of an economic slowdown or even a mild recession, rendering broader averages vulnerable to more declines.
Indexes & Yields
The S&P 500 index edged up 1.24 points to 4,132.55 and the Nasdaq Composite index inched lower 2.43 points to 12,054.76.
The yield on 2-year Treasury notes inched lower to 4.11%, 10-year Treasury notes edged down to 3.50% and 30-year Treasury bonds traded at 3.73%.
Crude oil edged higher 72 cents to $78.11 a barrel and natural gas held at $2.24 a thermal unit.
Stock Movers
Procter & Gamble rose 3.7% to $156.50 after the consumer products maker reported better-than-expected quarterly results.
P&G said revenue in the fiscal third quarter ending in March increased 4% to $20.1 billion, driven by 10% increase in prices and 3% decline in volume.
Net income attributable to common stockholders increased 1% to $3.39 billion from $3.35 billion and diluted earnings per share rose to $1.37 from $1.33 a year ago.
The company revised its full-year sales guidance to increase 1% from the previous estimated range between decline of 1% and in-line.
CSX Corporation increased 2.8% to $31.69 after the railroad operator reported first quarter results.
Revenue increased 9% to $3.7 billion and net earnings rose 15% to $987 million from $859 million and diluted earnings per share rose to 48 cents from 39 cents a year ago.
PPG Industries increased 0.8% to $142.55 after the company lifted its full-year outlook.
Revenue increased 2% to $4.3 billion and net income soared to $264 million from $18 million and diluted earnings jumped to $1.11 from 8 cents a year ago.
The company guided flat sales in the second quarter and earnings per share between $1.92 and $2.02 and adjusted earnings per share in the full-year 20223 between $6.95 and $7.25, excluding amortization charges and non-cash pension settlement charges.
5th Weekly Gain In European Markets, Private Sector Activities Rebounded
Bridgette Randall
21 Apr, 2023
Frankfurt
European markets struggled and investors digested a fresh batch of earnings amid growing economic anxieties.
The latest PMI surveys in the Euro Area and UK showed service sector growth accelerated in April but manufacturing remained under pressure on weakening demand for goods.
The HCOB Eurozone Composite PMI increased to 54.4 in April, highest in 11 months.
The HCOB Germany Composite PMI rose to 53.9 in April from 52.6 in March, indicating accelerating business activities in the private sector after service sector activities rose to a 12-month high.
The S&P Global/CIPS UK Composite PMI increased to 53.9 in April from 52.2 in March, indicating the fastest pace of expansion since April 2022.
The index above 50 indicates expansion and below 50 shows deceleration.
Investors also welcomed positive quarterly results from EssilorLuxottica and Mercedes Benz reported sharply higher industrial free cash flow.
Poor Weather Contributed to March Retail Sales Decline In UK
Retail sales in the U.K. fell more than expected in March, the Office for National Statistics reported Friday.
Poor weather contributed to stretched consumer budgets, negatively impacting retail sales.
March retail sales, including motor fuel, decreased 0.9% from the previous month after rising for two months in a row.
February retail sales growth was downwardly revised to 1.1% from the previous estimate of 1.2%.
Retail sales, excluding motor fuel, declined 0.6% from the previous month, after rising 2.1% in February.
Retail sales volume in the three months to March increased 0.6% from the previous three-month period.
Europe Indexes & Yields
European markets were in holding patten in Friday's trading but benchmark indexes are set to close higher for the fifth week in a row.
The DAX index declined 0.3% to 15,755.08, the CAC-40 index decreased 1.09 points to 7,537.62 and the FTSE 100 index added 7.48 points to 7,910.09.
The yield on 10-year German Bunds eased to 2.44%, French bonds decreased to 2.96%, the UK gilts to 3.71% and Italian bonds to 4.32%.
The euro held at $1.096, the British pound at $1.284 and the Swiss franc
Brent crude edged up 11 cents to $81.09 a barrel and the Dutch TTF natural gas futures rose 36 cents to Є40.92 per MWh.
Europe Stock Movers
Glencore Plc decreased 1.1% to 496.54 pence and the resource company reported first quarter production that met investors' expectations.
Coal production declined 6% to 26.9 million tons and zinc production fell 15% to 205.3 kt or (thousands of tons) and copper production eased 5% to 244.1 kt.
Holcim AG declined 0.3% to Sfr 58.74 and the Swiss cement and construction materials company reiterated its full-year outlook.
Tele2 AB declined 1.1% to SEK 104.70 after the company reported less-than-expected 3% increase in first quarter revenue from a year ago.
Mercedes Benz Group AG rose 0.4% to €68.46 after the luxury automaker reported "strong" first quarter preliminary results.
Earnings before interest and taxes rose to €5.5 billion, largely driven by vans division and industrial free cash flow increased to €2.2 billion, surpassing market expectation of €1.2 billion.
SAP SE increased 1.3% to €117.14 after the German software company lowered its annual outlook following the sale of its Qualtrics unit.
EssilorLuxottica SA increased 6.6% to €187.0 after the French-Italian company reported a first quarter sales increase driven by the sales rebound in China.