Boeing's new aircraft include the 737 MAX, pictured, 787-10 Dreamliner and 777X. But new jet deliveries have not compensated for higher costs as the company tries to climb out of pandemic-induced doldrums. Photo / AP
Boeing's new aircraft include the 737 MAX, pictured, 787-10 Dreamliner and 777X. But new jet deliveries have not compensated for higher costs as the company tries to climb out of pandemic-induced doldrums. Photo / AP
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
International
US
Technology company Microsoft reported its second quarter results ending December 2022, which showed its profit exceeded analysts’ estimates, thanks to the strength of its Azure cloud-services business.
Adjusted net income wasUS$2.32 per share in the period, and overall revenue rose 2.0 per cent to US$52.7 billion, which compared to the average analysts’ projections for US$2.30 per share in adjusted net income and US$52.9 billion in revenue.
Sales of Azure increased by 38.0 per cent, higher than the 37.0 per cent increase predicted by analysts.
However, the company also announced it was cutting 10,000 jobs and recorded a charge of US$1.2 billion in the latest quarter, with US$800.0 million of that related to the job cuts.
Despite the job cuts, management remains optimistic about the cloud computing market and will continue to invest in long-term opportunities such as artificial intelligence.
Aircraft company Boeing reported a loss for the fourth quarter of 2022, its sixth consecutive losing quarter, as higher costs slowed its recovery despite a late increase in jet deliveries which drove a surge in cash inflow.
Adjusted earnings were negative US$1.75 per share and revenue was US$20 billion. The results highlight the work that Boeing still needs to do to return its factories to full capacity and take advantage of the surging demand for air travel.
Despite the loss, the company generated US$3.1 billion in cash flow during the quarter, better than the US$2.9 billion per analysts’ consensus on Bloomberg.
Chief executive Dave Calhoun said that challenges remain and the company still has work to do to drive stability in its operations and within the supply chain.
Rest of World
Netcompany, a Danish Technology company, reported fourth quarter 2022 results showing strong growth in revenue, adjusted ebitda, and free cash flow.
Revenue grew 31.9 per cent to 1.519b Danish Krone (NZ$344m), with organic growth at 18.9 per cent.
Adjusted earnings increased 46.4 per cent to DK348.9 million and the margin was 23.0 per cent.
Free cash flow was DK323.4 million , an improvement of 140.0 per cent from the corresponding quarter in 2021.
For the full year 2022, total revenue was DK5,544.6, an increase of 52.7 per cent compared to 2021. The company’s chief executive officer André Rogaczewski said despite a challenging economic outlook for 2023, the company expects to grow between 8-12 per cent and have margins of 15-18 per cent.
Shares in companies tied to India’s Adani Group lost US$10.8 billion in value after a report by short seller Hindenburg Research targeting the conglomerate controlled by billionaire Gautam Adani was released.
Gautam Adani, the founder India’s Adani Group. Photo / M. Scott Brauer, The New York Times
The report alleged Adani Group engaged in stock price manipulation and accounting fraud over the course of decades and presented a list of 88 questions related to these allegations.
Adani Group chief financial officer Jugeshinder Singh said the report was “a malicious combination of selective misinformation and stale, baseless and discredited allegations” and that it was timed to “undermine the Adani Group’s reputation” and damage demand for a share offer by Adani Enterprises.
Commodities
Cold weather is forecast for the Western United States and Upper Midwest in early February. The National Weather Service’s eight to 14-day forecast shows the cold front spreading across the Northeast.
Standard & Poor Global’s gas supply-demand model for the week ending January 26 projects a below-average withdrawal of 137 billion cubic feet from United States inventory.
Natural gas prices are down 4.3 per cent on today’s close.
Australia
The Australian Bureau of Statistics said the Consumer Price Index in Australia has risen by 7.8 per cent year-over-year for the quarter ended December 2022, the highest level since 1990 and beating market expectations.
The quarterly headline CPI increased by 1.9 per cent quarter-over-quarter, driven by holidays and travel, electricity and rents.
Trimmed mean CPI, a measure preferred by the Reserve Bank of Australia (RBA), also exceeded expectations at 6.9 per cent year-over-year, well above the RBA’s target range of 2 to 3 per cent.
Factors contributing to the rise in inflation included elevated input costs for farmers and producers of packaged goods, as well as strong Christmas demand.
Essentials remained the largest driver of inflation at 8.4 per cent year-on-year, while discretionary spending also increased at 7.1 per cent year-on-year.
Core goods moderated to 7.3 per cent annualized while core services increased to 10 per cent annualized.
Woodside, an oil and gas company, reported a 12.0 per cent decline in quarterly revenue to A$5.16b for the fourth quarter of 2022.
The decline was due to an 8.5 per cent drop in sales volumes to 52.2 million barrels equivalent and a 4.0 per cent decrease in the average realized price per barrel equivalent.
Despite this, the company reported record full-year revenue of A$16.85b, a 142.0 per cent increase from the previous year, due in part to the merger with the petroleum assets of BHP Group.
Woodside also reported a full-year production of 158 billion barrels equivalent, which surpassed its guidance range.
The Woodside share price closed 1.2 per cent below the day’s opening price. Chief executive Meg O’Neill said the company’s strong performance was due to consistent operational performance and favourable operating conditions.
Woodside’s guidance for their fiscal year 2023 remains unchanged, targeting production of 180 to 190 million barrels of oil equivalent.
New Zealand
Stats NZ announced consumer prices increased by 1.4 per cent quarter-on-quarter and 7.2 per cent year-on-year, which was in line with the economic poll on Refinitiv Eikon and below the Reserve Bank’s forecast of 1.7 per cent for the quarter and 7.5 per cent for the year.
Tradables inflation came in at 8.2 per cent for the quarter driven by the 18.9 per cent increase in international airfare prices.
New Zealand’s inflation is rotating towards services prices and away from goods, with services inflation being more persistent and difficult to bring down.
Quick service restaurant operator Restaurant Brands’ reported its fourth quarter sales for the period ending December 2022 at $332 million, a 16.9 per cent increase from the same period in 2021.
The sales recovery is attributed to the return of normal operations after the impacts of the Covid-19 outbreak in New Zealand and Australia.
However, the company is still facing worldwide inflationary pressures and significant cost inflation across all regions, driving price increases and putting pressure on margins.
Full year sales reached $1.239b, a 16.0 per cent increase from the prior year.
Same store sales across all regions increased by 4.5 per cent in New Zealand, 7.4 per cent in Australia, 3.2 per cent in Hawaii and decreased by 2.4 per cent in California.
The company will release its annual trading results for the year ending December 31, 2022 on February 28, 2023.
• For more information on the latest market moves, get in touch with Jarden.
All market pricing and announcements are sourced from Refinitiv, NZX and ASX.
The Jarden Brief is provided for general information purposes only. It reflects views and research available at the time of publication, using external sources, systems and other data and information we believe to be accurate, complete and reliable at the time of preparation. We make no representation or warranty as to the accuracy, correctness and completeness of that information, and will not be liable or responsible for any error or omission. The Jarden Brief is not to be relied upon as a basis for making any investment decision. Please seek specific investment advice before making any investment decision. Jarden Securities Limited is an NZX Firm. A financial advice disclosure statement is available free of charge at https://www.jarden.co.nz/our-services/wealth-management/financial-advice-provider-disclosure-statement/.
