A slowdown in vaccine sales contributed to a 25 per cent drop in sales revenue for Johnson & Johnson. Photo / CFOTO, Future Publishing, Getty Images
Keeping you up to date with the latest market moves, in association with Investment firm Jarden
International
US
Multinational giant Johnson & Johnson announced its fourth quarter results for 2022, showing a 25.0 per cent drop in earnings at US$1.33 per share, down from US$1.77 per share the previous year.
This is because it had incurred costs preparing to separate its consumer health business into an independent company named Kenvue and costs related to its Covid vaccine.
Revenue for the quarter decreased by 4.4 per cent over the previous year’s quarter at US$23.7 billion due to a slowdown in vaccine sales and a stronger dollar.
Management forecasted sales to rise about 5.0 per cent, between US$96.9-97.9 billion in 2023, and have flagged staffing shortage headwinds as the key pressure on sales.
Inflation in 2022 has carried over some costs into 2023 which remain elevated. Chief Financial Officer Joseph Wolk said sales and earnings growth will be stronger in the second half of 2023 as a result.
American multinational General Electric also reported its fourth quarter result for 2022, showing an increase in quarterly revenue and earnings than 2021.
Quarterly profit came in at a US$2.1 billion and a 7.0 per cent increase in revenue beat analyst expectations.
A 25.0 per cent increase in quarterly aerospace revenue drove this, as demand for jet engines and power equipment rose in the fourth quarter, with a 26.0 per cent rise in orders due to increased demand in air travel after pandemic restrictions lifted.
Chief Executive Larry Culp also flagged inflation as a pressure that won’t be going away in 2023, saying pricing has caught up with cost increases.
The group expects a free cash flow of US$3.4-4.2 billion in 2023 that is expected to shift over 2023, a decrease from the previous range given in the middle of last year of US$5.5-6.5 billion.
Rest of World
Swiss watch and jewelry manufacturing company Swatch Group reported its full year earnings for its fiscal year 2022, where net income increased 6.3 per cent and net sales grew 2.5 per cent.
Swatch said it expects a resurgence in luxury demand from China going into 2023.
This result showed all regions except China demonstrating domestic sales growth, due to Covid lockdowns that resulted in a shortfall in sales volume. Shares closed at 3.4 per cent ahead of their open.
Another Swiss manufacturing company, Logitech, reported its quarterly performance ending December 2022, showing sales decreasing to US$1.3 billion by 22.0 per cent from the previous year’s quarter.
Reaffirmed was the 13.0 to 15.0 per cent decline in expected sales in their fiscal year 2023.
Quarterly earnings per share declined 26.4 per cent and Logitech cut its full year outlook for the remaining quarter due to the weaker results and uncertainty in supply availability related to the current Covid outbreak in China.
Commodities
Crude oil decreased 1.5 per cent amid concerns of a global economic slowdown in 2023 and an expected rise in United States oil inventories.
There are hopes of higher Chinese demand driving oil price increases as an OPEC panel is likely to endorse the current oil output policy when it meets next Tuesday.
Australia
Department store operator Myer announced a trading update for the five months ended December 2022 which was received positively by the market as shares closed 5.3 per cent up for the day.
Total sales increased 24.8 per cent over the previous consecutive period, which is to be considered alongside the 18.9 per cent and 14.3 per cent increase when compared to the half year total sales for 1H20 and 1H19 respectively.
The company said the stocktake sale period after Christmas has continued to strongly outperform the prior corresponding period.
Net profit after tax guidance has been issued for the 26 weeks ended 28th January 2023 of A$61-66 million, noting the strength of the performance after Christmas.
Buy now pay later technology company Zip’s shares closed 15.6 per cent down for the day as the company released the second quarter results for its fiscal year ending June 30th 2023.
While group revenue was up 12.0 per cent year-on-year for the quarter to a record A$188 million, group subscribers remained flat at 7.4 million users from the previous quarter.
Cash transaction margin increased from the previous quarter, going from 2.2 per cent to 2.6 per cent which the company said was “in line with medium term targets” of 2.5 to 3.0 per cent.
The cash balance had decreased from A$140.7 million on September 30th last year to A$78.5 million, which management has flagged and is expected to be sufficient to support the company.
Management reassured the path to profitability in the first half of the fiscal year ending June 30th 2024.
As part of the company’s strategic review, operations in the United Kingdom and Singapore have been successfully closed as operations in Mexico have proceeded to close, and as of early this month the Middle East begins to wind down operations.
New Zealand
Real estate company Auckland Real Estate Trust announced it would be presenting a proposal to delist from the NZX and ASX stock exchanges to its shareholders pending approval at the AGM in early March.
Management also provided updates on the progress of the sale of its assets, such as the confirmation of the Harbour Collection being sold for approximately $52.5 million in the Viaduct and due to complete in March 2023.
1700 W Higgins, an asset located in the United States has had its sale delayed and terms revised due to the impact of the domestic market conditions but the US$15.0 million portion is set to be completed as stated.
Coming up today
Statistics New Zealand will publish the 4th quarter Consumers Price Index for 2022, where expected year-on-year growth is to be 7.1 per cent for the quarter, flat from the 3rd quarter’s year-on-year growth of 7.2 per cent.
The Reserve Bank will also publish credit card spending data in New Zealand for December 2022.
The Australian Bureau of Statistics will publish Australia’s final quarterly Consumer Price Index for 2022. A range of mining and exploration companies uch as Fortescue and Woodside Energy will publish on their quarterly performance.
• 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/.
Full disclaimer available at: https://www.jarden.co.nz/wealth-sales-and-research-disclaimer
All market pricing and announcements are sourced from Refinitiv, NZX and ASX.
Scales Corporation shares are up after it upgraded guidance.