But shares in the company have fallen 11.8 per cent at the time of writing after the company reduced its operating-margin expansion outlook for this year to at least 100 basis points from 125 basis points from previous guidance.
Management said growth in its unbranded payment-processing business, Braintree, had lower margins than its branded business despite payment volume rising 30.0 per cent as opposed to the branded business volume rising 6.5 per cent over the previous year.
Biotechnology firm Novavax expects to earn between US$1.4 billion and US$1.6 billion in 2023, mainly from its Covid-19 vaccine Nuvaxovid.
Management plans to update its protein-based technology vaccine in the fall (September to November) of 2023, targeting individuals who may be uncomfortable with the mRNA vaccines from Pfizer and Moderna. In the first quarter of 2023, Novavax’s revenue came in at US$81 million, down 88.5 per cent year on year.
Management announced it is cutting its workforce by 25.0 per cent as part of restructuring to reduce costs and extend cash. Novavax’s stock rose 29.0 per cent at the time of writing.
Healthcare company DaVita reported its first quarter results and increased its 2023 guidance. The company now expected adjusted operating income of US$1.475 billion to US$1.625 billion and adjusted diluted net income per share of US$6.20 to US$7.30.
DaVita’s net income for the first quarter fell by about 28.0 per cent compared to the previous year’s comparative quarter, while revenue per treatment rose to US$366.14 and care costs per treatment increased to US$257.34.
The company’s cash and cash equivalents at the end of their first quarter were US$411.4 million, down by about 2.0 per cent from 31 March 2022. DaVita’s stock rose 15.2 per cent at the time of writing.
Rest of the World
China’s imports fell sharply in April while exports rose at a slower pace, indicating weak domestic demand and a long path to regaining pre-pandemic momentum at home. Inbound shipments to China fell 7.9 per cent year on year in April, extending the 1.4 per cent decline in March, while exports grew 8.5 per cent, easing from the 14.8 per cent surge in March, according to customs data.
Swedish real estate company SBB’s shares continued to decline on Tuesday (down 24.2 per cent) after SBB announced it will suspend dividend payments and cancel a planned share issue.
This follows the credit rating downgrade to “BB+” from “BBB-” by S&P Global on Monday. The rating agency also warned a further downgrade deeper into junk territory was possible over the next six to twelve months if the company did not secure sufficient funding.
The decision to halt dividends and share issue came after SBB’s market reaction to the downgrade made it impossible to proceed. The declining real estate sector in Sweden has led policymakers to consider it a risk to financial stability, with the Swedish central bank raising its policy rate to 3.50 per cent in April.
Commodities
Chinese iron ore prices have hit a five-month low, falling 23.0 per cent since March to US$102.7. This drop is being attributed to weak demand and a slowdown in construction and manufacturing sectors, which are major consumers of steel.
While China’s steel production rose in the first quarter of 2023 compared to the same period last year, orders haven’t kept pace, leading to the collapse in the steel market.
Australia
Commonwealth Bank of Australia, the largest home loan provider in the country, reported its unaudited quarterly net profit increased by 10.0 per cent compared to last year, but had decreased 2.0 per cent since December.
The company also reported it would no longer be offering cash payments to attract new borrowers due to customer and lender feedback, with competitors expected to follow suit. The bank pointed out that, while third quarter home loan arrears remained low, there may be an increase in arrears as borrowers face higher living costs.
CBA’s business banking unit delivered around 40.0 per cent of profit for the the third fiscal year quarter, with business loan volumes also growing.
Australian Bureau of Statistics data revealed retail sales volumes fell by 0.6 per cent in the March quarter of 2023, marking the largest fall since September 2009. The decline follows a 0.3 per cent fall in the previous quarter.
According to the National Australia Bank, a “consumer recession” has arrived, with transaction data falling by around 0.4 per cent for the second straight month in April.
New Zealand
Retail card spending in New Zealand increased by 0.7 per cent in April 2023 compared to March 2023, after adjusting for seasonal effects, with consumables and durables leading the growth.
The total card spending on consumables increased by 2.3 per cent while card spending on durables rose by 1.0 per cent.
In actual terms, total retail card spending increased by 6.4 per cent while the total card spending rose by 7.8 per cent from April 2022 to April 2023.
Spending in the hospitality industry increased by 15.5 per cent ($171 million) between April 2022 and April 2023. The services category was down by 0.6 per cent.
Coming up today
Scheduled for today in Australia, CSR Limited is set to release its fiscal year earnings results, while Iluka Resources AGM and GPT Group AGM are also scheduled. In New Zealand, there is no news expected to be released, however, it is worth noting Pushpay will be exiting the NZX50 and Hallenstein Glassons Holdings will enter at the end of the trading period today.
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