DAILY MARKET REPORTS
- The S&P 500 and the Nasdaq got a boost from Facebook’s stellar earnings on Thursday, while the Dow was weighed down by a bunch of disappointing quarterly results as investors awaited the outcome of the U.S.-China trade talks.
- Investors parsed news that China is pinning its hopes on another meeting between President Trump and Chinese leader Xi Jinping to help solve the trade dispute between the world’s two largest economies.
- Wall Street surged on Thursday after the U.S. central bank said it would be patient in raising rates further this year, reassuring investors concerned about tighter financial conditions crimping economic growth.
- The Fed’s dovish tone, along with heartening results from tech companies including Apple Inc and Facebook set the main U.S. indexes on track for their best month in about three years.
- GE jumped 13% after the struggling conglomerate beat analysts’ revenue estimates despite reporting another quarter of weak profits.
- DowDuPont fell 7.7%, leading decliners on the blue-chip Dow, after the chemical maker’s revenue fell short of expectations.
- In other sectors, Facebook shares surged 11% after posting a record quarterly profit.
- Microsoft fell 1.7% after its post-close release Wednesday while Qualcomm was flat after its own report.
- Fourth-quarter earnings reports have largely exceeded market expectations so far, helping U.S. stocks recover from a December selloff that was fueled by concerns about trade disputes, rising interest rates and fears of diminishing corporate profits.
US FINANCIAL MARKET
Facebook Reports Record Profit
- Facebook posted record profit in the fourth quarter, showing the resilience of the social-media giant’s business even as it battles through a string of challenges.
- Revenue rose 30% to $16.91 billion, exceeding expectations of $16.40 billion.
- Monthly and daily users of the main Facebook app compared to last quarter were up 2.2% to 2.32 billion and 2.0% 1.52 billion, respectively, exceeding estimates for 2.3 billion monthly users and 1.5 billion daily users.
- Overall, more than 2.7 billion people use the company’s family of services—including Facebook, Instagram, WhatsApp and Messenger—each month.
- Total expenses in the fourth quarter surged to $9.1 billion, up 62% compared with a year ago and operating margin fell to 46% in the fourth quarter from 57% a year ago.
- Net income rose to $6.88 billion, up from $4.27 billion a year earlier, helped by a steep reduction in tax rate.
Microsoft Sales Slow in Some Product Lines as Cloud Business Grows
- Microsoft said sales from its cloud-computing business jumped again in its latest quarter, but growth in several other product lines slowed down predominantly due to computer-chip shortages.
- Total revenue rose 12% to $32.47 billion, compared with the $32.54 billion that analysts polled by FactSet expected.
- Azure, Microsoft’s flagship cloud product, had revenue growth of 76% in the final quarter of 2018, down from a 98% surge a year earlier.
- Revenue from Microsoft’s productivity software unit climbed 13% to $10.1 billion, powered by double-digit revenue growth for LinkedIn and Office 365. Wall Street analysts on average had expected revenue of $10.09 billion
- Meanwhile, its personal computing division, home to Windows software and still its largest by revenue, showed revenue growth of 7% to $13 billion, while analysts had expected $13.07 billion.
- Microsoft reported a profit of $8.42 billion in the quarter, compared with a loss of $6.30 billion a year earlier, and just ahead on a per share basis.
Tesla Notches Another Quarterly Profit
- Tesla reported its first-ever consecutive quarterly profit, but it missed Wall Street estimates, drawing concerns whether the auto maker can deliver reliable profits while selling the lower-priced Model 3 car.
- Revenue more than doubled to $7.23 billion in the final three months, beating estimates for $7.12 billion.
- Deliveries of its compact car totaled 63,359 in the fourth quarter compared to 1,550 a year earlier.
- The electric-car maker’s profit in the fourth quarter was $139.5 million, reversing a loss from a year ago but smaller than the $311.5 million posted three months earlier and below consensus on a per share basis.
- The company’s cash stash grew to about $3.7 billion compared with about $3 billion at the end of September.
- Cash remains a concern as Tesla faces a $920 million debt payment in March that the company will have to pay down entirely with cash if its shares remain on average below the strike price of $359.87.
GE Chief Says Making Progress on Turnaround After Tough Year
- General Electric executives said they were making progress in turning around the troubled conglomerate, after the company reported another quarter of weak profits in its core power business and legacy problems in its GE Capital unit.
- Revenue rose 5% to $33.28 billion and beat estimates of $32.6 billion, including a 25% decline in power business, which makes turbines for power plants, and a 21% jump in its aviation business, which manufactures jet engines.
- Fourth-quarter profit was $761 million, compared with a loss of $10.82 billion a year earlier, when it booked a large charge for a shortfall in reserves at a defunct GE Capital insurance business.
- The power division pain continued in the fourth quarter with a segment loss of $872 million, which GE said came from “continued execution and operational issues.”
- The company’s aviation business continued to outshine the other operations—segment profit was higher than all others combined, rising 24% to $1.7 billion in the quarter on revenue of $8.5 billion.
- Cash flow from operations was $6.4 billion for the quarter, down 9% from last year.
- Full-year cash flow from operations dropped 80% to $2.3 billion from $11 billion in 2017.
DowDuPont Sales Flat as Lower Demand Dents Growth
- DowDuPont’s sales were flat in its latest quarter as lower customer demand for its appliances and automotive products as well as the drop in oil prices weighed on the manufacturer’s top line.
- The crop-seed and chemical maker said its sales were $20.1 billion as price and volume gains were offset by foreign-currency translation, coming in below the expected $20.93 billion of revenue in the fourth quarter.
- Net income was $513 million compared to a net loss of $1.2 billion from continuing operations, largely on merger-related costs.
- The company said it expects first-quarter revenue to down in the “mid-single digits%” without giving detailed numbers.
- Analysts were expecting DowDuPont to report revenue of $22.63 billion for the first quarter, 5% higher than the year earlier quarter.
Northrop Grumman profit beats, forecasts 2019 outlook below estimates
- Northrop Grumman topped Wall Street estimates for quarterly profit on Thursday driven by higher sales in its aerospace and mission systems units, but the U.S. weapons maker forecast 2019 profit and revenue below estimates.
- Revenue rose 24.5% to $8.16 billion. Analysts on average had expected revenue of $8.12 billion.
- Sales at Northrop’s aerospace unit climbed 5.9% to $3.19 billion, and Revenue at its mission systems unit rose 2.2% to $3.04 billion.
- Net income fell to $356 million in the fourth quarter, from $672 million a year earlier.
- The company forecast 2019 profit between $18.50 and $19.00 per share, below the average analysts’ expectations of $19.49 per share, and expects revenue of about $34 billion for the full year 2019, slightly below analyst estimates of $34.21 billion.
Raytheon’s mixed quarter and modest forecast hurt shares
- Tomahawk missile maker Raytheon reported an 8.5% rise in fourth-quarter revenue on Thursday, but the lower than expected number along with a conservative 2019 profit and revenue forecast sent shares down.
- Revenue in the quarter rose to $7.36 billion from $6.78 billion a year earlier boosted by higher demand for its weapons by the U.S. and its allies, but it missed estimates of $7.46 billion.
- Raytheon’s net income jumped to $832 million in the quarter, compared with $393 million a year earlier, benefiting from lower taxes related to the U.S. tax overhaul.
- The company expects 2019 net sales to range between $28.6 billion and $29.1 billion, marginally below expectations of $29.01 billion, and forecast 2019 profit in the range of $11.40 to $11.60 per share, below analysts’ average estimate of $11.78 per share.
Qualcomm Expects Another Drop in Revenue Amid Licensing Disputes
- Qualcomm’s revenue is expected to decline for the third consecutive quarter as Apple and others continue to withhold royalty payments amid legal challenges.
- Revenue fell 20% to $4.84 billion versus $4.9 billion expected, as total mobile-chip shipments fell 22% during the quarter to 186 million.
- Revenue from the chip business fell 20% to $3.74 billion, compared with analysts’ projected $3.8 billion.
- Meanwhile, licensing revenue fell another 20% to $1.02 billion, above the company’s forecast but shy of analysts’ $1.06 billion.
- Qualcomm reported a fiscal first-quarter profit of $1.07 billion compared to a loss of $5.98 billion year ago, largely tied to charges related to the U.S. tax overhaul and a fine in Europe.
Consumers’ Move Away from Cash Purchases Boosts Visa Profits
- Visa reported strong earnings driven by ongoing growth in payments volume as more consumers shift to cards from cash for making purchases—but warned that growing political uncertainties could impact consumer spending.
- Net revenue for the three-months totaled $5.5 billion, up 13% from a year earlier. Analysts expected $5.41 billion of revenue.
- Visa processed 33.9 billion transactions in the quarter, up 11% from a year earlier, and total payments volume grew 12%.
- Net income at the world’s largest payment processor rose to $2.98 billion in the first quarter, from $2.52 billion, a year earlier.
Mastercard’s Expenses Rise Faster Than Revenue Due to Litigation Provision
- Mastercard’s profit rose along with revenue despite the credit-card company setting aside $757 million for litigation costs.
- The company said net revenue rose 15% to $3.81 billion in the latest quarter. Analysts were expecting $3.8 billion in revenue.
- The credit-card company’s gross dollar volume—or the value of card transactions—increased 9.4% to $1.55 trillion.
- Profit nearly quadrupled to $899 million, compared with $227 million a year earlier, driven higher by a $941 million drop in income tax expenses from the comparable quarter a year ago.
PayPal shares fall as sales outlook misses Wall Street expectations
- PayPal shares fell after the online payments company forecast revenue for the current quarter short.
- For the fourth quarter, revenue rose to $4.23 billion from $3.74 billion, just missing analysts’ average estimate of $4.24 billion.
- PayPal processed $164 billion in payments over the period, up 23% from a year earlier and added a record 13.8 million new active accounts in the fourth quarter, compared to an increase of 8.7 million a year earlier.
- Venmo, its peer-to-peer payment app popular with younger consumers, processed $19 billion of payments in the fourth quarter, up 80% from the same quarter a year ago.
- Net income fell to $584 million in the fourth quarter, from $620 million a year earlier.
- For the first quarter, PayPal said it expects revenue between $4.08 billion and $4.13 billion, falling short of analysts’ average $4.16 billion estimate. The company reaffirmed its full year outlook.
Internet users help Charter beat revenue estimates
- Charter Communications topped quarterly revenue estimates as the cable operator attracted more customers for its internet services, offsetting a drop in video subscribers.
- Total revenue rose 5.9% to $11.23 billion. Analysts on average had expected revenue of $11.14 billion.
- Charter added 289,000 residential internet customers in the fourth quarter, but reported a loss of 36,000 residential video customers in the quarter, compared with net 2,000 customers it gained last year.
- Net income fell to $296 million, from $9.55 billion a year earlier, when the company booked a huge tax benefit.
Sprint loses fewer phone subscribers and beats on revenue
- Sprint reported fewer-than-expected losses for phone subscribers who pay a monthly bill on a net basis and beat quarterly revenue estimates, as the U.S. wireless carrier has focused on improving profitability.
- Total net operating revenue rose 4.4% to $8.60 billion. Analysts had expected revenue of $8.43 billion.
- The company lost a net 26,000 phone subscribers during the third-quarter, fewer than the 32,000 subscriber losses expected.
- The company warned churn, or the rate of customer defections, could rise in the near-term due to the higher prices.
- Churn for the third quarter increased to 1.84%, up from 1.71% last year.
- Sprint reported net loss of $141 million in the quarter, compared with a net income of $7.16 billion a year earlier, when the company benefited from a change in U. S. tax laws.
UPS Results Ride the Surge in Online Shopping
- United Parcel Service posted higher revenue in the fourth quarter as it handled more packages and squeezed higher prices from shipments, even as costs tied to expanding the network cut into profits.
- Revenue rose 4.6% to $19.8 billion versus expected revenue of $19.97 billion.
- Net income fell to $453 million in the fourth quarter from $1.10 billion a year earlier and included a $1.24 billion after-tax pension charge – profit beat on an adjusted per share basis.
- For the coming year, UPS projects adjusted earnings between $7.45 and $7.75 a share, which is largely below analysts’ average estimate of $7.69 per share. It said operating profits will rise at a rate in the low teens, with all segments up double digits.
Mondelez Continues to Raise Snack Prices
- Oreo cookies maker Mondelez’s revenue slipped 2.8% in the December quarter as the impact of a stronger dollar eroded income from its large overseas business.
- Overall net revenue fell to $6.77 billion in the fourth quarter, matching analysts’ average forecast.
- However, overall organic sales, which exclude the impact from acquisitions and currency fluctuations, rose 2.5%, driven mainly by moves to introduce healthier snacks to better serve fitness freaks and health-minded consumers.
- Net earnings rose to $823 million, from $695 million a year earlier – in line with expectations.
Hershey Looks to New Candy, Higher Prices to Boost Revenue
- Hershey said new candy and packaging will boost sales and profit this year even as it faces tougher competition from a wider range of snack makers.
- Hershey’s total sales increased 2.5% to $1.99 billion, narrowly missing analyst estimates on flat comparable sales growth.
- Net income surged to $336.8 million in the fourth quarter, from $181.1 million a year earlier.
- Hershey said it expects sales to increase by 1% to 3% this year, with earnings per share rising by 5% to 7%—in line with estimates.
Shell Profit Doubles in Boost for Big Oil
- Royal Dutch Shell doubled 2018 profit as strong crude prices and belt tightening have kept Big Oil on track to deliver healthy returns.
- Oil and gas production in the year rose slightly to 3.666 million barrels of oil equivalent per day as new fields that came online offset the effect of disposals.
- Free cash flow – cash available to pay for dividends and share buybacks – rose to $39.4 billion from $27.6 billion in 2017.
- Shell’s 2018 profits jumped 36% to $21.4 billion, beating the $20.98 billion in a company-provided forecast and boosted by a strong second half performance.
ConocoPhillips beats profit estimates on higher production, prices
- ConocoPhillips beat quarterly profit estimates on Thursday as the world’s largest independent oil producer sold more oil at higher prices, sending its shares up 2% before the opening bell.
- Total production, excluding Libya, rose 94,000 barrels of oil equivalent per day (boe/d) to 1.31 million boe/d in the fourth quarter, while total realized price per barrel was $53, compared with $46.10 per barrel a year earlier.
- The company said adjusted net income rose to $1.31 billion in the fourth quarter, from $540 million a year earlier.
- In the first quarter of 2019, ConocoPhillips expects to produce 1.29 million boe/d to 1.33 million boe/d.
Baker Hughes adjusted profit surges 85% on demand for services
- Baker Hughes, General Electric’s oilfield services arm, posted an 85% jump in adjusted quarterly profit on Thursday, boosted by surging demand for its services.
- Total revenue increased 8% year over year to $6.3 billion Revenue in Baker Hughes’ oilfield services, which accounts for roughly half of total sales, rose 10% to $3.1 billion in the reported quarter.
- The company reported $6.9 billion in orders, up from $5.7 billion last year and the largest in roughly three years. Orders in its oilfield equipment business more than doubled from the prior year to over $1 billion.
- The company reported an adjusted net income of $120 million in the fourth quarter, in line with analysts’ expectations, compared to last year’s net income of $65 million.
Valero Energy adjusted profit rises on higher margins
- Independent U.S. refiner Valero Energy reported a higher fourth-quarter profit on Thursday as refining margins got a boost from lower domestic crude prices.
- Total revenue increased 9% to $28.7 billion compared to $26.4 billion a year ago, beating expectations.
- Valero said refining margins rose 26% to $3.05 billion in the last three months of 2018.
- On an adjusted basis, income rose to $900 million in the fourth quarter, from $509 million a year earlier.
Altria says Juul sales quintupled to $1 billion in 2018
- Marlboro-maker Altria on Thursday reported fourth-quarter financial results that matched analyst expectations and gave investors more insight on its new e-cigarette and marijuana investments as its core cigarette business shrinks.
- Net sales rose 1.5% to $4.79 billion slightly below expectations of $4.81 billion.
- Total domestic cigarette industry volumes fell by an estimated 4.5% in 2018, Altria said.
- Altria reported fourth-quarter net income of $1.25 billion, down from $4.97 billion a year earlier but matching consensus.
- For the full year of 2019, Altria forecasts adjusted earnings within the range of $4.15 and $4.27 per share versus $4.24 expected.
- Altria said its affiliate e-cigarette maker Juul Labs posted $1 billion in revenue in 2018, up from $200 million a year earlier.
Celgene profit beats as psoriasis drug sales surge
- Celgene, which is being bought by Bristol-Myers Squibb for $74 billion, reported a better-than-expected fourth-quarter profit on Thursday, driven mainly by higher sales of psoriasis drug Otezla.
- Total revenue rose nearly 16% to $4.04 billion, higher than the $3.99 billion analysts had expected.
- Sales of Celgene’s biggest drug Revlimid rose 16.5% to $2.55 billion, in line with expectations, while Otezla brought in revenue of $448 million in the quarter, up 21% and well above the estimates of $430.2 million.
- The drugmaker, which also reaffirmed its forecast for 2020, posted a net profit of $1.07 billion, for the quarter, compared with a loss of $81 million a year earlier, when it took a $1.21 billion charge related to the U.S. tax law overhaul.
ServiceNow Stock Pops as Q4 Earnings, Billings Blow Past Estimates
- ServiceNow reported fourth-quarter profit that blew past Wall Street views as subscription billings also topped views.
- Revenue rose 30% to $715.4 million from $546.4 million a year earlier. Analysts expected sales of $717.8 million.
- ServiceNow said fourth-quarter subscription revenue rose 33% to $666 million, edging estimates of $665 million.
- Subscription billings jumped 38% to $952 million. Analysts had projected billings of $904 million.
- The company reported fourth-quarter net income of $7 million, compared with a loss of $17.3 million in the year-ago period, well above consensus on a per share basis.
Abiomed Tops Quarterly Estimates, Raises 2019 Outlook
- Abiomed beat estimates for revenue and profit after strong demand for its Impella heart pump devices and drove growth.
- Total revenue increased 30% to $201 million from $154.0 million a year ago, beating expectations of $196 million.
- Net income more than tripled to $44.8 million compared to $13.45 million in the same period a year ago, modestly ahead of expectations on a per share basis.
- Abiomed increased its 2019 revenue guidance to $780 million, up from a range of $765 million to $770 million, an increase in revenue of approximately 31% from the prior year.
- The company also updated its fiscal year 2019 guidance for GAAP operating margin to the range of 29% to 29.5%. This compares to the company’s prior fiscal 2019 guidance of 28% to 30%.
Blackstone Posts Fourth-Quarter Loss, Hurt by Falling Markets
- Blackstone reported a quarterly loss, its first since the third quarter of 2015, as volatile fourth-quarter markets hurt the value of its private-equity investments.
- Blackstone’s distributable earnings fell to $722.1 million from $1.24 billion a year earlier, but beat estimates.
- Blackstone said its assets under management were $472.2 billion, up from $434.1 billion a year earlier. The private-equity firm has set a goal of reaching $1 trillion in assets by 2026 and is expanding into new business lines to achieve that.
- The firm posted a net loss of $10.9 million in the fourth quarter, compared with a profit of $304.1 million a year earlier.
Blue Apron Sheds Customers Again
- Blue Apron said it lost more customers in the latest quarter as the maker of subscription food boxes cut back on advertising and marketing for its meal-kits.
- Revenue fell 25% to $140.7 million year-over-year for the quarter ended in December.
- The company on Thursday reported 557,000 users at the end of December, down 25% from the previous year’s period. It was the seventh consecutive quarter of losses.
- For the fourth quarter, the company beat expectations with a smaller reported loss of $23.7 million, compared with a loss of $39.1 million a year earlier.
US ECONOMY & POLITICS
Jobless Claims Jumped Last Week
- The number of Americans filing applications for new unemployment benefits rose sharply last week, although claims filed by federal employees ticked down during the fourth week of a monthlong partial government shutdown.
- Initial jobless claims, a proxy for layoffs across the U.S., increased by 53,000 to a seasonally adjusted 253,000 in the week ended Jan. 26, the Labor Department said Thursday.
- Economists expected 215,000 new claims last week. Claims for the previous week were revised to 200,000.
- Thursday’s report showed the number of claims workers made for longer than a week increased by 69,000 to 1,782,000 in the week ended Jan. 19. The figure, also known as continuing claims, is reported with a one-week lag.
U.S. New-Home Sales Surged in November
- New-home sales rose 16.9% from a month earlier to a seasonally adjusted annual rate of 657,000.
- Economists had expected new-home sales to reach an annual rate of 571,000.
- Despite the November increase, sales of new homes were down 7.7% compared to a year earlier, suggesting a bumpy housing market over the broader term.
- The average rate on a 30-year, fixed-rate mortgage rose about 1 percentage point to nearly 5% from the start of 2018 to last November, according to Freddie Mac. The average rate has since fallen half a point to just under 4.5%.
Fed Signals Hold on Rate Increases
- The Federal Reserve indicated Wednesday that it was done raising interest rates for now, fueling a market rally.
- Officials voted to hold their benchmark rate steady and delivered an about-face from their policy stance six weeks earlier.
- “The case for raising rates has weakened somewhat,” Fed Chairman Jerome Powell said at a news conference after the central bank’s latest policy meeting.
- On Wednesday, Mr. Powell cited growing risks of a sharp U.S. economic slowdown due to cooling growth in Europe and Asia.
- He also said officials were paying close attention to policy-related headwinds from trade disputes, Brexit and the potential for future U.S. government shutdowns.
U.S. Employment Costs Rose 0.7% in the Fourth Quarter
- The employment-cost index, a measure of wages and benefits for civilian workers, rose a seasonally adjusted 0.7% from October through December, the Labor Department said Thursday.
- The gain was slightly short of expectations of economists and was below the 0.8% increase in the third quarter.
- From a year earlier, compensation increased 2.9% in the fourth quarter, continuing an upward march.
China Is Counting on Trump-Xi Meeting to Settle Trade Fight
- China is pinning its hopes on another meeting between President Trump and Xi Jinping to help solve the trade dispute between the world’s two largest economies as a wide gap remains between U.S. demands and what Beijing is willing to offer.
- The Chinese delegation led by Vice Premier Liu He has proposed to the U.S. that Mr. Trump meet with Mr. Xi in the seaside Chinese resort city of Hainan after his planned summit with Kim Jong Un, in late February.
- In a tweet Thursday morning, Mr. Trump indicated he is open to a new meeting with Mr. Xi. “No final deal will be made until my friend President Xi, and I, meet in the near future to discuss and agree on some of the long standing and more difficult points,” Mr. Trump wrote.
Polar Vortex Strains Systems; General Motors Halts Factories
- Deadly Arctic temperatures strained infrastructure across the Midwest for a second day Thursday, stalling transportations systems, closing factories, cramming hospital emergency rooms and prompting energy providers to ask customers to turn thermostats lower.
- At least eight deaths have now been linked to the polar freeze, including a University of Iowa student found dead on Wednesday and a 55-year-old Milwaukee man who died shoveling snow.
- General Motors said it halted production at 13 plants in Michigan, after a fire at one of the utility’s facilities and strains on the natural gas supply.
- Temperatures again flirted with or reached record lows, dropping into the negative 20s Fahrenheit in Chicago on Thursday morning with windchills closer to negative 50.
EUROPE & WORLD
Samsung Electronics forecasts weaker 2019 earnings as chip sales slow
- Samsung Electronics warned of weaker earnings in 2019 as it posted a 29% drop in fourth-quarter operating profit on Thursday, hit by a slowdown in demand for memory chips.
- Revenue fell 10% to 59.3 trillion won. Samsung said memory demand was expected to remain weak in the first quarter before improving gradually from the second, helped by sales to cloud-computing companies.
- Fourth-quarter operating profit for Samsung’s chip division fell 29% to 7.8 trillion won, while its mobile division logged a 1.5 trillion won profit, down 38% from a year ago.
- Samsung said operating profit was 10.8 trillion won ($9.7 billion), in line with its estimates earlier this month.
Roche sees 2019 sales, profit rise despite competition from copies
- Roche expects sales and earnings to rise in 2019 as new drugs more than offset competition from copies of its $20 billion-plus per year trio of cancer medicines Rituxan, Herceptin and Avastin, the Swiss drugmaker said on Thursday.
- Sales rose 7% to 56.8 billion francs, just ahead of the 56.4 billion francs average estimate in a Reuters poll.
- Sales of Ocrevus more than doubled to 2.4 billion francs, while Hemlibra in its first full year on the market reached 224 million francs, which Schwan called “beyond expectations.”
- Net profit rose 24% to 10.9 billion francs, as the company was helped by U.S. tax reform that lowered its tax rate.
Unilever Faces Squeeze in North America
- Unilever reported disappointing quarterly revenue growth and warned of a tough year ahead amid fierce competition in North America and volatile emerging markets, underscoring the challenge facing new Chief Executive Alan Jope.
- Overall, Unilever reported a fall of 5.1% in full-year revenue to €50.98 billion ($58.54 billion), which it attributed to the sale of its spreads business and currency headwinds
- Net profit jumped to €9.39 billion from €6.05 billion, boosted by the sale of its spreads business.
- For 2019, it forecast underlying growth at the lower half of its long-term guidance of 3% to 5%, citing uncertainty in several countries. The downbeat tone prompted the company’s shares to fall more than 3%.
Nokia Gets Small Signal Boost From 5G
- Nokia forecast growing, if sporadic, demand for 5G gear this year and next, but said near-term sales are likely to be flat as the Finnish telecom equipment maker struggles to emerge from years of cost cutting and profit warnings.
- Reported sales were €6.87 billion compared with €6.65 billion a year earlier, and above expectations of €6.65 billion.
- Nokia reported a net profit of €193 million ($222 million) compared with a loss of €386 million a year earlier.
- Nokia shares fell 6% Thursday after a dim outlook for the first half of the year overshadowed better than expected full-year sales.
Japan’s Nintendo slashes Switch hardware forecast after bumper third quarter
- Japan’s Nintendo slashed its full-year hardware forecast for the hybrid home-portable Switch console, revising a figure that had been treated with skepticism by investors and added to pressure on its share price.
- Revenue grew 26% over the same period a year earlier, but the Kyoto-based gaming company said it expected to sell 17 million Switch consoles in the year ending March, down from 20 million.
- At the same time, Nintendo smashed profit estimates and upgraded its Switch software forecast to 110 million units from 100 million previously, announcing that hit titles “Super Smash Bros. Ultimate” and “Pokemon: Let’s Go” have shifted over 10 million copies each.
- Operating profit for October-December was 158.6 billion yen ($1.46 billion), the highest in nine years and the second consecutive third-quarter rise. That was well above the 149 billion yen average estimate.
Ferrari fourth-quarter core earnings up 6%, shares rise
- Italian luxury maker Ferrari on Thursday posted an expected 6% rise in fourth-quarter core earnings, helped by positive performance from across its regions.
- Sales were up 1% at 845 million euros.
- Adjusted EBITDA rose to 274 million euros ($314 million), in line with an analyst consensus.
- For 2019, Ferrari forecast adjusted EBITDA rising around 10% to between 1.2-1.25 billion euros compared to last year, while full-year revenues are seen growing more than 3% to more than 3.5 billion euros.
Spirits firm Diageo hits new high as China sales surge
- Diageo, the world’s largest spirits company, beat half-year earnings and sales forecasts on stronger demand from China and India and said it would buy back 660 million pounds ($866 million) of shares, sending its stock to a new high on Thursday.
- First-half organic net sales rose 7.5% to 6.91 billion pounds ($9.07 billion), beating analysts’ average forecast for a 5.5% rise.
- Earnings of 77 pence per share also beat forecasts of 71.4 pence, according to a company-supplied consensus.
- Diageo stuck to its overall forecast for mid-single-digit organic net sales growth for the year, and for a 175 basis point increase in its operating margin for the three years to that date.
Death Toll from Brazilian Dam Collapse Jumps to 99
- The death toll from the Brumadinho tailings dam disaster in Brazil rose to 99 on Wednesday, with another 259 missing and feared dead, the country’s civil-defense authorities said.
- The dam, owned by Brazilian iron-ore giant Vale, burst on Friday, burying the company’s local offices, a busy lunchroom and a nearby village under a thick layer of reddish-brown muck.
- Rescue workers have said that there is little chance any of the people still buried under the sea of sludge are alive and that the number of dead is expected to rise over coming days, as rescue efforts shifted to where the lunchroom swept away by a tide of mud probably settled.
TODAY in HISTORY
- Robert E. Lee was appointed commander-in-chief of the Confederate forces. (1865)
- The first social security check was issued to Ida Fuller for $22.54. (1940)
- The first McDonald’s opened in Russia. (1990)
This information has been prepared from sources believed to be reliable, but no representation is being made as to its accuracy or completeness. The information provided should be used only as general information and is not intended to provide specific advice or recommendations for any individual. The economic forecasts set forth in the material may not develop as predicted. All indices, such as the S&P 500, are unmanaged and may not be invested into directly. Sources: Reuters, Bloomberg, the Wall Street Journal.
Content posted by third parties on this site is screened in order to protect clients’ privacy and comply with regulatory requirements. Content containing sensitive personal information, inappropriate language, information about specific investments, misleading information, information about other companies or websites, or information related to litigation will be removed. Content posted by third-parties on this site remains the responsibility of the party posting the content and is not adopted or endorsed by Pence Wealth Management or LPL Financial. Any opinions or statements posted by third parties are their own and may not be representative of the experience of others and are not indicative of future performance or success. Third party content on this site does not reflect the views of LPL Financial and have not been reviewed by LPL Financial as to accuracy or completeness.