Company news in brief
Shoprite shares dive after profit warning
South African retailer Shoprite looked set for its biggest fall in almost 20 years on Wednesday after it warned of a steep drop in half-year headline earnings citing foreign exchange setbacks and other factors.
Shoprite in a trading statement released after the market close on Tuesday said it expects headline earnings per share (HEPS) including an adjustment for hyperinflation to fall by as much as 26% to 388.6-441.1 cents for the 26 weeks which ended on Dec. 30.
"The low turnover growth resulting from low food inflation, temporary stock availability challenges and currency devaluations combined with lower non-RSA (non-South Africa) gross margins and inflexible expense growth have adversely affected profitability," Shoprite said in its trading statement.
Last Tuesday, Shoprite, which owns more than 2 800 outlets across Africa, reported flat half-year sales, held back by a strike at its largest distribution centre in South Africa and sharp currency devaluations elsewhere.
In South Africa the retailer has seen cost increases in rent, electricity, security, transport and depreciation, it said. – Nampa/Reuters
Diageo's HY sales rise on India, China demand
Diageo Plc, the world's largest spirits company, reported higher half-year sales yesterday, helped by strength in India and China.
The British maker of Johnnie Walker Scotch and Smirnoff vodka reported net sales of 6.91 billion pounds (US$9.07 billion), up 7% on an organic basis, for the six months ended Dec. 31.
It reported earnings of 77 pence per share, excluding one-time items.
Analysts on average were expecting organic net sales growth of 5.5% and earnings of 71.4 pence per share for the period, according to a company-supplied consensus.
Diageo also said it would buy back 660 million pounds worth of shares, bringing the total buyback programme to up to 3 billion pounds for the year ending June 30. – Nampa/Reuters
Facebook profit beats Wall St
Facebook Inc on Wednesday easily beat Wall Street's profit estimates, soothing investor concerns that increased spending on the privacy of its users would blunt growth.
The world's largest online social media network has pledged to invest heavily in the privacy and security of its users after scandals over improperly shared data and propaganda hurt its image and made it the target of political scrutiny across the globe.
Net income rose to US$6.88 billion, or US$2.38 per share, in the fourth quarter, up from US$4.27 billion, or US$1.44 per share, a year earlier. Analysts on average had expected earnings of US$2.19 per share, according to IBES data from Refinitiv.
Total fourth-quarter revenue rose 30% to US$16.9 billion from US$12.97 billion, compared to analysts' average estimate of US$16.4 billion.
Facebook said on a conference call after reporting earnings that its total revenue growth rate this quarter would decelerate to mid-single digits, excluding currency fluctuations, compared to the fourth quarter, and would continue to slow down throughout the year. It said it continued to expect 2019 total expenses to grow about 40% to 50% compared with 2018. – Nampa/Reuters
Alibaba revenue grows at weakest pace in 3 years
E-commerce giant Alibaba Group Holding Ltd's quarterly revenue grew at its weakest pace in three years, as the impact of a slowing China and a crippling Sino-US trade war kept buyers away during its top-sale season.
Alibaba, the second most valuable public company in Asia after Tencent, posted third-quarter revenue of 117.28 billion yuan (US$17.47 billion), compared to 83 billion yuan a year earlier.
Alibaba typically posts its highest revenue in the December quarter due to its mega "Singles' Day" in November - the world's biggest online sales event that outstrips the sales of US shopping holidays Black Friday and Cyber Monday combined.
In 2018, even though Alibaba netted a record US$30 billion from the Singles' Day, annual growth dropped to the weakest rate in the event's 10-year history as a slowing China and trade tensions chilled sentiment. – Nampa/Reuters
Canon expects first drop in operating profit since 2016
Japan's Canon Inc expects its annual operating profit to drop for the first time in three years, as a Chinese economic slowdown and a stronger yen hit sales of cameras and panel-making equipment.
The camera and printer manufacturer on Wednesday forecast an operating profit of 325 billion yen (US$2.97 billion) for 2019, down 5.2% from 342.95 billion yen a year earlier – the first decline since 2016. That would be below a consensus of 332.35 billion yen of 18 analysts, according to Refinitiv data.
"We are bracing for a number of risk factors this year, including Sino-US trade frictions, an economic slowdown in China and emerging markets, as well as Brexit-driven political turmoil in Europe," chief financial Office Toshizo Tanaka said.
China's economy grew at its slowest in almost three decades in 2018 and the pace is expected to ease further this year.
Canon shares have lost about 30% over the past year as the company slashed its annual profit forecast twice on lean demand for semiconductor and flat panel-producing equipment. – Nampa/Reuters
Volvo releases brake on special dividend
Swedish truckmaker Volvo said on Wednesday it would pay a special dividend of 5 Swedish crowns (US$0.5523) per share after reporting fourth-quarter profit marginally ahead of expectations and repeating its 2019 market demand outlook.
Operating income, adjusted for a 7 billion crowns provision relating to an emissions issue, jumped to 10.60 billion from a year-ago 7.33 billion, slightly ahead of the 10.47 billion forecast in a poll of analysts.
Volvo has been buoyed by robust demand in recent years as truck buyers renew fleets starved of investment during the last downturn but ignited worries in October that markets might have peaked with a forecast of slower demand for trucks in both Europe and China in 2019.
However, the company on Wednesday reiterated its markets outlook for Europe, China and North America, saying it expected European demand to be on "historically good levels" and North American economic growth to support the regional truck market.
The company warned this month its fourth-quarter operating income would be hit by a 7 billion provision to cover costs stemming from some of its engines running the risk of exceeding emission limits due to a fault with externally sourced catalytic converters. – Nampa/Reuters
South African retailer Shoprite looked set for its biggest fall in almost 20 years on Wednesday after it warned of a steep drop in half-year headline earnings citing foreign exchange setbacks and other factors.
Shoprite in a trading statement released after the market close on Tuesday said it expects headline earnings per share (HEPS) including an adjustment for hyperinflation to fall by as much as 26% to 388.6-441.1 cents for the 26 weeks which ended on Dec. 30.
"The low turnover growth resulting from low food inflation, temporary stock availability challenges and currency devaluations combined with lower non-RSA (non-South Africa) gross margins and inflexible expense growth have adversely affected profitability," Shoprite said in its trading statement.
Last Tuesday, Shoprite, which owns more than 2 800 outlets across Africa, reported flat half-year sales, held back by a strike at its largest distribution centre in South Africa and sharp currency devaluations elsewhere.
In South Africa the retailer has seen cost increases in rent, electricity, security, transport and depreciation, it said. – Nampa/Reuters
Diageo's HY sales rise on India, China demand
Diageo Plc, the world's largest spirits company, reported higher half-year sales yesterday, helped by strength in India and China.
The British maker of Johnnie Walker Scotch and Smirnoff vodka reported net sales of 6.91 billion pounds (US$9.07 billion), up 7% on an organic basis, for the six months ended Dec. 31.
It reported earnings of 77 pence per share, excluding one-time items.
Analysts on average were expecting organic net sales growth of 5.5% and earnings of 71.4 pence per share for the period, according to a company-supplied consensus.
Diageo also said it would buy back 660 million pounds worth of shares, bringing the total buyback programme to up to 3 billion pounds for the year ending June 30. – Nampa/Reuters
Facebook profit beats Wall St
Facebook Inc on Wednesday easily beat Wall Street's profit estimates, soothing investor concerns that increased spending on the privacy of its users would blunt growth.
The world's largest online social media network has pledged to invest heavily in the privacy and security of its users after scandals over improperly shared data and propaganda hurt its image and made it the target of political scrutiny across the globe.
Net income rose to US$6.88 billion, or US$2.38 per share, in the fourth quarter, up from US$4.27 billion, or US$1.44 per share, a year earlier. Analysts on average had expected earnings of US$2.19 per share, according to IBES data from Refinitiv.
Total fourth-quarter revenue rose 30% to US$16.9 billion from US$12.97 billion, compared to analysts' average estimate of US$16.4 billion.
Facebook said on a conference call after reporting earnings that its total revenue growth rate this quarter would decelerate to mid-single digits, excluding currency fluctuations, compared to the fourth quarter, and would continue to slow down throughout the year. It said it continued to expect 2019 total expenses to grow about 40% to 50% compared with 2018. – Nampa/Reuters
Alibaba revenue grows at weakest pace in 3 years
E-commerce giant Alibaba Group Holding Ltd's quarterly revenue grew at its weakest pace in three years, as the impact of a slowing China and a crippling Sino-US trade war kept buyers away during its top-sale season.
Alibaba, the second most valuable public company in Asia after Tencent, posted third-quarter revenue of 117.28 billion yuan (US$17.47 billion), compared to 83 billion yuan a year earlier.
Alibaba typically posts its highest revenue in the December quarter due to its mega "Singles' Day" in November - the world's biggest online sales event that outstrips the sales of US shopping holidays Black Friday and Cyber Monday combined.
In 2018, even though Alibaba netted a record US$30 billion from the Singles' Day, annual growth dropped to the weakest rate in the event's 10-year history as a slowing China and trade tensions chilled sentiment. – Nampa/Reuters
Canon expects first drop in operating profit since 2016
Japan's Canon Inc expects its annual operating profit to drop for the first time in three years, as a Chinese economic slowdown and a stronger yen hit sales of cameras and panel-making equipment.
The camera and printer manufacturer on Wednesday forecast an operating profit of 325 billion yen (US$2.97 billion) for 2019, down 5.2% from 342.95 billion yen a year earlier – the first decline since 2016. That would be below a consensus of 332.35 billion yen of 18 analysts, according to Refinitiv data.
"We are bracing for a number of risk factors this year, including Sino-US trade frictions, an economic slowdown in China and emerging markets, as well as Brexit-driven political turmoil in Europe," chief financial Office Toshizo Tanaka said.
China's economy grew at its slowest in almost three decades in 2018 and the pace is expected to ease further this year.
Canon shares have lost about 30% over the past year as the company slashed its annual profit forecast twice on lean demand for semiconductor and flat panel-producing equipment. – Nampa/Reuters
Volvo releases brake on special dividend
Swedish truckmaker Volvo said on Wednesday it would pay a special dividend of 5 Swedish crowns (US$0.5523) per share after reporting fourth-quarter profit marginally ahead of expectations and repeating its 2019 market demand outlook.
Operating income, adjusted for a 7 billion crowns provision relating to an emissions issue, jumped to 10.60 billion from a year-ago 7.33 billion, slightly ahead of the 10.47 billion forecast in a poll of analysts.
Volvo has been buoyed by robust demand in recent years as truck buyers renew fleets starved of investment during the last downturn but ignited worries in October that markets might have peaked with a forecast of slower demand for trucks in both Europe and China in 2019.
However, the company on Wednesday reiterated its markets outlook for Europe, China and North America, saying it expected European demand to be on "historically good levels" and North American economic growth to support the regional truck market.
The company warned this month its fourth-quarter operating income would be hit by a 7 billion provision to cover costs stemming from some of its engines running the risk of exceeding emission limits due to a fault with externally sourced catalytic converters. – Nampa/Reuters
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