Despite challenges, American Airlines recorded strong fourth-quarter revenue and its first full-year profit since 2019. Photo / AP
Keeping you up to date with the latest market moves, in association with Investment firm Jarden.
International
US
Airline operator American Airlines reported fourth-quarter profit that beat analysts’ expectations due to strong travel demand and high fares.
The company reported an adjusted earnings per share of US$1.17, compared to the expected $1.14 according to Bloomberg consensus, and total revenue of US$13.19 billion, up 16.6 per cent from the same period in 2019.
Despite operating at 6.1 per cent less capacity, the company recorded record fourth-quarter revenue.
For the full year, the company reported US$127 million in net income, its first full-year profit since 2019.
The company’s chief executive officer, Robert Isom, said mainline pilot constraints should ease this year but regional pilot shortfalls should last several more years.
The company plans to hire 2,000 pilots for its mainline operation this year.
Payment processing company Mastercard reported better-than-expected earnings when compared to Bloomberg analyst consensus for the fourth quarter of 2022 with US$2.65 in earnings per share and a 17 per cent increase in net revenue on a currency-neutral basis.
The company saw a boost from China’s reopening after three years of Covid-19 lockdowns and increased travel.
However, the outlook is uncertain due to the Federal Reserve’s interest-rate increases.
Mastercard’s chief executive said despite uncertainty, consumer spending has been resilient and the company is prepared to adjust investments if needed.
In the first weeks of January, cross-border travel surpassed 2019 levels and the company is confident in continued growth throughout the year, particularly in the Asia-Pacific region.
Rest of World
In the first trading day following the Lunar New Year break, the benchmark Hang Seng Index in Hong Kong jumped 2.4 per cent to close at its highest since March 1, 2022.
The offshore yuan also strengthened against the dollar as onshore markets remain closed for the week.
Traders were encouraged by strong holiday travel and box office data in China.
The holiday period also saw tourism rebound in Hong Kong and Macau as cross-border travel increased.
Car manufacturing company Toyota Motor Corporation announced its first CEO transition in 14 years.
Koji Sato will become president and chief executive officer on April 1 and Akio Toyoda will step down to become chairman.
Bank of America called the transition surprising, as Toyoda is a member of the founding family and won confidence both inside and outside Toyota for the earnings recovery staged after the East Japan Earthquake.
Toyota is said to have decided to accelerate change in an auto industry undergoing structural change, with the first focus appearing to be the new executive structure.
Car manufacturer Hyundai Motor expects to have solid backorder demand in major car markets and forecast robust growth in electric vehicle sales, including in the United States.
The South Korean automaker is targeting a 54.0 per cent jump in Electric Vehicle sales in 2023 to 330,000 globally, and said it wants its US electric car sales to climb 150.0 per cent to 73,000 to account for 9.0 per cent of its United States’ vehicle sales.
It also reported a tripling of net profit for the last quarter ended December 2022. The automaker said it was cancelling treasury shares equivalent to 1.0 per cent of its outstanding stock.
Commodities
Oil prices rose per cent on Thursday, driven by expectations of stronger global demand as China reopens its economy and positive United States economic data.
Brent futures increased by US$1.18, or 1.4 per cent, to US$87.30 a barrel, while West Texas Intermediate crude rose US$1.12, or 1.4 per cent, to US$81.27.
Both were on track for their highest closing levels since January 23rd, 2021.
Australia
Australia Day is a public holiday in Australia observed yesterday. The ASX stock market was closed and there was little to no news flow as most of the financial institutions, companies and businesses were closed.
New Zealand
Telecommunications company Chorus announced total fibre connections increased by 17,000 to 997,000. It completed the Ultra-Fast Broadband rollout in December with uptake remaining at 71.0 per cent.
However, fibre connection growth in this period was affected by field workforce constraints. The company also achieved its target of 1 million total fibre connections in mid-January. It also reported a reduction of 2k in total broadband connections, but added 3k broadband connections in Chorus Ultra-Fast Broadband areas.
Copper broadband and voice connections declined by 29,000 and the total fixed line connections declined by 12,000. Average monthly data usage on fibre was 555 Gigabytes in December and 15.0 per cent of fibre connections consumed more than 1,000 Gigabytes a month.
Electricity company Mercury confirmed its full year 2023 ebitda and change in fair value and other significant items guidance of $620 million, or a normalised figure of $795 million after adjusting for the non-cash unwind of acquired swaps relating to the Norske Skog, Tilt and Trustpower transactions.
The company’s hydro production forecasts have been increased to 4,700 gigawatt hours for this period due to very wet conditions in the Waikato catchment.
The integration of the Mercury and Trustpower retail businesses is ahead of schedule, but this has resulted in higher integration costs to come in 2023.
In December 2022, Mercury acquired the remaining shares of NOW New Zealand Limited, which provides telecommunications and broadband services to 24,000 residential and small commercial customers throughout New Zealand.
The company saw connection growth across all product lines and commercial & industrial yields rose due to rising electricity forward curve repricing contract renewals. Guidance may change and remains subject to any material events, significant one-off expenses or other unforeseen circumstances including changes to hydrological conditions.
Coming up today
ANZ’s economic team will publish its New Zealand Business Outlook for January 2023 at 1:00pm.
In Australia, medical equipment company Resmed will announce its second quarter result ending December 2022. Australian Bureau of Statistics will be publishing Producer Price index data for the fourth quarter of 2022.
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All market pricing and announcements are sourced from Refinitiv, NZX and ASX.
The New Zealand sharemarket has fallen 5% in the first half, while others have gained.