💻U.S Big Tech Beat Earnings Estimates as NSE Dividend Drought Continues.
The big tech firms released their earnings last week with majority of them beating earnings estimate. More local firms released earnings, with a majority declaring no dividend.
Hey Hisa fan,
Happy Labour Day! Kenyans enjoyed at least one holiday in three out of the four weeks of April. May has also kickstarted with a holiday! Must be good being Kenyan! Local and global markets moved the past week on earnings releases as local and global firms rushed to beat regulatory deadlines for their various financial reporting periods. Here is how various companies performed.
Top Earnings Brief.
Microsoft Corporation Inc. [NASDAQ: MSFT 0.00%↑] - Microsoft released its 3Q23 earnings, posting a massive growth as the company expanded on its artificial intelligence. The company’s net income was up 9% to $18.3 billion, or $2.45 per share, from $16.73 billion, or $2.22 per share the company posted in the previous year. Total revenue for the company was up 7% to $52.86 billion from $49.36 billion in 2022.
Microsoft also announced its multibillion-dollar investment in OpenAI, the firm responsible for ChatGPT, and that the firm would develop Microsoft’s AI models for its Microsoft 365 productivity software and Bing search engine.
Microsoft’s cloud computing business remains the most profitable business unit, generating $22.1 billion in revenue over the quarter, topping analysts estimates of $21.9 billion.
Fun fact: Traffic for Bing spiked 16% in the six weeks after Microsoft announced it would incorporate ChatGPT into search.
Alphabet Inc. [NASDAQ: GOOG 0.00%↑] - Google’s parent company Alphabet Inc released earnings after trading closed on Tuesday. Google’s advertising revenue stood at $40.4 billion for the quarter, a 5% decline from the $42.6 billion posted in the previous quarter. Net income edged lower to $15.05 billion, or $1.17 per share, from $16.44 billion, or $1.23 per share year-on-year.
YouTube’s Ad revenue stood 2% lower to $6.69 billion but topped views amid lowered expectations. Cloud-computing revenue rose 28% to $7.45 billion. Gross revenue rose 3% to $69.79 billion with earnings per share closing at $1.17 per share a 5% decline year-on-year.
Alphabet said its board had also authorized a $70 billion share buyback, even as the company announced it will continue with laying off more members of its workforce. In January, the company laid off over 12,000 employees, about 6% of its workforce.
WWP Scangroup Plc [NSE:SCAN] - Scangroup posted a KES 75 million profit during the year, a 297 per cent jump from the KES 38 million loss posted in 2021. Despite the increased earnings, the company’s gross revenue declined by 3.67 per cent to KES 7.3 billion from KES 7.6 billion in 2021.
Standard Group Plc [NSE: SGL] - Total revenue for the Group decreased by 13% at KES 2.7 billion from KES 3.1 billion in 2021 while total costs increased by 17% driven by an increase in the cost of production. Further, there was an increase in the provision for expected credit losses, due to pending government bills. Consequently, the Group incurred a loss before tax of KES 1 billion compared to a loss before tax of KES 22 million in 2021.
Flame Tree Group Plc [NSE:FTGH] - Flame Tree Group sales increased by +19% up to KES 4.026 million. Gross margin dropped 9.6 p.p down to 24.2% (FY2021:33.8%) due to exorbitant increased costs of raw material and devaluation of Kenyan shilling. Net loss FY2022 was KES 214.9 million. Net assets increased by +8%.
Other Key Earnings Snapshots.
Amazon Inc. [NASDAQ: AMZN 0.00%↑] - Amazon posted a profit of $3.2 billion for the first quarter, up from a loss of $3.8 billion the company posted over a similar period a year ago. Revenue jumped 9% during the quarter year-on-year. Amazon expects second-quarter net sales to grow between 5% and 10% from the same period the year before, or be between $127 billion and $133 billion.
Chevron Corporation [NYSE: CVX 0.00%↑] - Net profit climbed 5% to $6.57 billion or $3.46 per share. That compares with a Wall Street consensus for flat profit at $3.38 per share, according to figures compiled by Zacks Investment Research.
Exxon Mobil Corp. [NYSE: XOM 0.00%↑] - Exxon Mobil posted earnings of $2.83 per share on revenue of $86.56 billion for the first quarter ended March 2023. The consensus earnings estimate was $2.65 per share on revenue of $83.11 billion.
Meta Platforms Inc. [NASDAQ: META 0.00%↑] - Facebook's parent company Meta had it's revenue up at $28.65 billion versus $27.67 billion estimated by analysts. Earnings per share was at $2.20. 2Q23 revenue for the company was at $29.5 billion from an analysts estimate of $29.48 billion.
Coffee Break
Too much work makes Jack a dull boy they say. Well, at Hisa, too much work brings you new updates! Last week, the team at Hisa rolled up new updates to Hisa App aimed at making your investment journey easier and simpler.
The updates include: Improved KYC process, DRIPÂ feature (automatic dividend reinvestment) for US stocks, dating of orders and transactions and finally, a super cool feature to search and follow other investors on the platform.
Markets
U.S Markets were mixed but mainly edged higher during the week, as tech companies released upbeat earnings to push investor expectation and returns appetite on the market.
The Dow Jones Industrial Average rose 289.20 points, or 2.87%, to close the week at 34,098.16 bps, the S&P 500 gained 35.96 points, or 8.59%, to close Friday at 4,169.48 bps and the Nasdaq Composite Index added 154.13 points, or 16.82%, to end the week at 12,226.58 bps.
Local Markets.
The Nairobi Securities Exchange extended losses as companies closed their books and more earnings came through for companies that had the first quarter deadline for FY2022.
The NSE 20 share index dropped 15.18 points or 0.95% to settle at 1578.88. All Share Index (NASI) down 0.21 points or 0.19% to stand at 107.63. The NSE 25 share index shed 12.93 points or 0.45% to settle at 2855.03.
Listed banks continued to dominate activity on the exchange during the week amidst an extended foreign investors outflow. Equity Group Holdings Plc rose 1.44% to KES.45.80 up from KES.45.15 registered in the previous week with shares valued at KES.111.4M transacted.
The Bonds Turnover increased by 14.42% closing the week at KES. 12.39 billion from KES. 11.2 Billion in the previous week.
What Top Cowries are we collecting this week?
Apple Inc. [NASDAQ: AAPL 0.00%↑] - The largest company in the world by revenue and market capitalisation is due to release their earnings on Thursday this week. The consensus earnings estimate is $1.44 per share on revenue of $92.94 billion, a decline of 4.5% year-over-year.
Bamburi Cement Co. Plc [NSE: BAMB] - Bamburi posted an 86.9% decline in earnings to KES181 million on the back of reduced sales and increased costs. Bamburi stock dropped 24% on Friday. With the CFO leaving a month after the CEO, we watch on the level the company will flat out at.
Global Banking Sector - Banks could face another turmoil this week with the U.S. Federal Deposit Insurance Corporation (FDIC) preparation to place First Republic Bank (FRC.N) under receivership imminently.
The U.S Federal Reserve - This week, we expect from the Fed’s rate decision to come in for the May 2023 meeting which kickstarts on the 2nd May. The FOMC is likely deliver its third consecutive quarter of a percentage point rate increase and continue to allow assets to roll off of its nearly $8.6 trillion.
How about you, what stocks are you watching for the week? Let us know on Hisa App.
Disclaimer: The writer of this article owns SCOM 0.00 , HAFR , EQTY 0.72%↑ , NVDA -0.72%↓ & AAPL 2.08%↑ shares. This article does not constitute any investment recommendations. Investors and the general public are advised to do their own research before making any investment decision.