Microsoft tops trillion-dollar mark for first time
April 25 2019 05:22 PM
Microsoft

AFP/New York

Microsoft hit the trillion-dollar value mark on Thursday for the first time, becoming the third technology giant to reach the symbolic milestone.

A share rally gave Microsoft a market capitalisation of just over $1tn, before dipping back slightly.

At its current levels, Microsoft is the world's most valuable company, ahead of Apple and Amazon, which last year topped $1tn before slipping back.

On Wednesday, Microsoft said profits in the quarter to March 31 rose 19% to $8.8bn on revenues of $30.8bn, an increase of 14% from the same period a year earlier.

The results were driven by growth in cloud computing and business services, the new focus for Microsoft after a long run as a leader in consumer software.

3M

US industrial products manufacturer 3M announced on Thursday it will cut 2,000 jobs worldwide, citing weakness in key markets that led to a drop in first-quarter sales.

3M, which makes a wide variety of industrial goods and tools as well as everyday items such as the ubiquitous stick-and-remove Post-It notes, also slashed its full-year profit forecast.

Total sales fell 5% to $7.9bn and included a 7.4% drop in Asia Pacific and a 9.4% decline in Europe, the Middle East and Africa.

Job cuts, which will result in annual savings of $225-250mn, will span all business groups, with an emphasis on "underperforming areas," the company said.

3M had 93,516 employees at the end of 2018.

Despite the weak sales, net income jumped 48% to $891mn because of a $897mn legal charge that dented profits in the comparable period of the prior year.

But 3M disclosed $548mn in new legal costs in the first quarter to build reserves for environmental litigation related to chemical waste disposal and for health care claims for coal miners, who have blamed the company for respiratory problems.

Bayer

German chemicals giant Bayer said its first quarter net profit slumped by more than a third, as it booked a big charge amid a flood of lawsuits over its subsidiary Monsanto's Roundup weedkiller.

Hit by the legal entanglements and ongoing costs of integrating Monsanto, Bayer's first quarter earnings slumped 36% to €1.24bn ($1.38bn). Bayer, which bought Monsanto for $63bn in June last year, said it now faced lawsuits from 13,400 plaintiffs over the glyphosate weedkiller in Roundup. It booked a charge of €51mn for "litigations and legal risks" in the first three months of 2019, up sharply from €4mn a year ago.

A third trial is underway in Alameda County, while another four are scheduled in Missouri and Montana for 2019, Bayer said.

Norwegian

Troubled low-cost airline Norwegian said on Thursday its net losses deepened in the first quarter of the year as the grounding of its Boeing 737 MAX 8 aircraft could cost it $58mn.

The net loss swelled to 1.48bn kroner ($171mn, 154mn euros) from 46mn kroner in the same period last year, when it booked an exceptional capital gain.

The winter period is traditionally slower for airlines, especially so this year as the Easter holiday fell in April. But Norwegian managed to improve its operating performance, reducing its operating losses to 1.46bn kroner from 2.23bn last year. Sales were up 14% at nearly eight billion kroner.

Norwegian was forced to raise more than $300mn in a share issue early this year to shore up its finances and embarked on a vast cost-cutting programme.

Nintendo

Nintendo said on Thursday its full-year net profit jumped nearly 40%, lifted by strong sales of blockbuster game titles for its popular Switch console.

The Kyoto-based games giant said "Pokemon" and "Super Smash Bros" gave an extra boost for the year as its shares surged on expectations of its launch of Switch games in China.

Nintendo's net profit for the fiscal year to March rose 39.0% from a year earlier to ¥194bn ($1.7bn), on sales of ¥1.2tn, up 13.7%.

Ultimate" recorded sales of nearly 14mn units, while "Pokemon Let's Go, Pikachu!", and "Pokemon Let's Go, Eevee!" sold more than 10mn units, it said.

For the current fiscal year to March next year, Nintendo forecasts its bottom-line profit would decline by 7.2% but set a higher sales target.

Nokia

Intensifying competition and delays in rolling out 5G equipment for the next generation of mobile phone networks pushed Nokia deeper into the red in the first quarter, the company said on Thursday.

Net losses more than doubled from the same period last year to hit €446mn ($497mn), and compared to a 193mn euros profit in the final three months of last year.

Chief executive Rajeev Suri acknowledged that the quarter was weak for the Finnish firm, which is widely seen as trailing China's Huawei and Sweden's Ericsson in the race to supply operators with the equipment needed to build next-generation 5G networks.

Nokia said it delayed booking €200mn in revenues it had expected in the first quarter.

Nevertheless sales edged up 2% to €5.0bn in the three months period.

UBS

Swiss banking giant UBS said on Thursday that revenue and profits both slid in the first quarter when a chill ran through the global economy and markets, but its performance beat analyst expectations.

Net profits slid 27% from the same quarter last year to $1.1bn (€1bn), with the bank benefiting from some exceptional items that boosted performance last year.

Revenues contracted by 12% to $7.2bn.

Both numbers beat the consensus of analysts surveyed by the Swiss financial news agency AWP, which was a net profit of $873mn on revenues of $6.9bn.

SK Hynix

South Korea's SK Hynix, the world's second-largest memory chip maker, saw operating profits plunge more than two-thirds in the first quarter in the face of lower prices, it said on Thursday.

Korean chipmakers — led by the behemoth Samsung Electronics — have enjoyed record profits in recent years as prices for their products soared.

But demand has started to decline while global market supply is increasing after manufacturers invested billions in new factories.

SK Hynix supplies to companies from Apple to China's Huawei Technologies, and recorded operating profits of 1.4tn won ($1.21bn) in the January to March period, it said — down 69% year-on-year.

Revenues dropped 22% and net income slumped 65%.

Shipments of DRAM chips — commonly used in smartphones and computer servers — dropped 8% quarter-on-quarter, because of a "seasonal slowdown and conservative server purchases", the chipmaker said in a statement.

Average selling prices dropped 27%, it added.

Tesla

Electric car maker Tesla on Wednesday announced a heavy loss in the first quarter as car deliveries sputtered overseas and a US tax credit that made its prices more attractive was reduced.

The California-based company reported a loss of $702mn in the first three months of this year after two consecutive quarters of profit.

Tesla produced about 63,000 Model 3 vehicles in the period, an increase of 3% from the same quarter a year earlier but fewer than had been anticipated.

The company attributed its disappointing financial results to Model 3 shipping delays, particularly in Europe and China.

Overall company revenue in the period rose 33% to $4.5bn in a year-over-year comparison, but fell far short of Wall Street forecasts.

Facebook

Facebook said Wednesday its profit took a hit from setting aside billions of dollars for an anticipated fine from US regulators, in a quarterly report that sent shares higher.

The leading social network logged a profit of $2.4bn — down 51% from a year earlier — on revenue that climbed 26% to $15.1bn in the first three months of this year.

The number of monthly active users of Facebook at the end of March was 2.38bn, up 8% from a year ago.

Facebook estimated that it will be hit with a fine of $3bn to $5bn by the US Federal Trade Commission for "user data practices," and factored that into its earnings report.

Freeport-McMoRan

Freeport-McMoRan Inc, the world's largest publicly traded copper producer, posted a lower-than-expected quarterly profit on Thursday due to slipping production and prices for the red metal, sending shares down more than 9%. The results come amid a more than $15bn project to expand Indonesia's Grasberg copper and gold mine from an open pit to an underground operation, a complex and time-intensive process that is nevertheless essential to help Freeport stem an erosion in production.

The Phoenix-based company posted first quarter net income of $31mn, or 2 cents per share, compared with net income of $692mn, or 48 cents per share, in the year-ago quarter.

Excluding onetime items, Freeport earned 5 cents per share.

Newmont Goldcorp

Newmont Goldcorp, the world's biggest gold miner, reported a higher-than-expected first-quarter profit on Thursday, as a boost in gold production and lower costs countered lagging gold prices.

Net income adjusted for costs related to the Goldcorp deal and the creation of a joint venture with Barrick Gold Corp fell to $176mn, or 33 cents per share, for the quarter, from $185mn, or 35 cents per share, in the same period last year.

Total sales fell to $1.80bn from $1.81bn.

Analysts' on average had estimated profit of 27 cents per share on revenue of $1.83bn, according to IBES data from Refinitiv.

Newmont said it would pay a dividend of 14 cents per share for the quarter.

Banco Bradesco

Brazil's No 2 private-sector lender Banco Bradesco SA posted a 22% gain in quarterly recurring net income, meeting forecasts, as default ratios hit all-time lows.

Bradesco's first quarter profit rose to 6.238bn reais ($1.56bn), roughly in line with a Refinitiv analyst consensus.

Declining losses on bad loans also boosted Bradesco's results.

Loan-loss provision fell by 8.4% from the same quarter a year earlier.

The bank's loan book reached 548.3bn reais, up 3.1% in the quarter, as lending to both individuals and companies increased.

Bradesco expects its loan book to grow between 9% and 13% in 2019.

Valero Energy

US independent refiner Valero Energy Corp reported less bearish than feared quarterly revenue and profit numbers on Thursday, as it sought to offset the impact of higher prices of heavy Canadian crude following Alberta's mandatory production cuts.

Net income attributable to Valero fell to $141mn, or 34 cents per share, in the quarter ended March 31, from $469mn, or $1.09 per share, a year earlier.

Analysts on average had expected the company to post a profit of 23 cents per share, according to IBES data from Refinitiv.

The company's quarterly revenue for the quarter was $24.26bn, beating expectations of $21.51bn.

Maruti Suzuki

Maruti Suzuki India Ltd said on Thursday it would stop making all diesel cars beginning April next year and forecast a weak rate of growth for the current fiscal year, blaming uncertain fuel prices and the onset of stricter emission norms.

Carmakers will need to invest in upgrading their technology, including for diesel cars, to meet India's stricter emission norms that come into effect next year.

Maruti Suzuki saw fourth-quarter EBITDA margins falling to 10.8% from about 12.5% in the same quarter last year.

EBITDA margins for the year fell to 14% from 15.9% a year ago.

The car maker said it sold 458,479 vehicles in the three months ended March 31, down 0.7%.

Southwest Airlines

Southwest Airlines Co beat Wall Street's lowered estimates for first-quarter profit on Thursday, as higher passenger revenue reduced the impact of more than 10,000 flight cancellations caused by winter storms, maintenance disruptions and the grounding of Boeing Co 737 MAX jets.

Dallas, Texas-based Southwest, the world's largest MAX operator with 34 jets in its fleet and dozens more on order, said closely-watched unit revenue grew 2.7% in the quarter, helped by its loyalty program.

Southwest reported net profit of $387mn, or 70 cents per share, compared with $463mn, or 79 cents per share, in the year-ago quarter.

Bristol-Myers Squibb

US drugmaker Bristol-Myers Squibb Co, which is set to buy biotechnology company Celgene Corp for $74bn, posted slightly better-than-expected first-quarter earnings on Thursday on strong sales of its blockbuster blood thinner Eliquis.

Net earnings in the quarter rose to $1.71bn, or $1.04 a share, from $1.49bn, or 91 cents a share, a year earlier.

Excluding one-time items, the company said it earned $1.10 a share.

That beat the average analyst estimate by a penny, according to IBES data from Refinitiv.

D R Horton

D R Horton Inc, the biggest US homebuilder, on Thursday was the latest to show strong quarterly results from the lowering of US mortgage interest rates, while giving a forecast for 2019 revenue that fell short of analysts' expectations.

Net income attributable to the company was $351.3mn, or 93 cents per share, in the second-quarter ended March 31, from $351.0mn, or 91 cents per share, a year earlier.

Revenue rose to $4.13bn from $3.79bn.

Excluding items, the company reported a profit of 87 cents, according to IBES data from Refinitiv.

Analysts, on average, expected a profit of 86 cents per share on revenue of $4.05bn.

Acacia Mining

Acacia Mining Plc reported a slump in underlying core earnings on Thursday as it struggled with production issues at its North Mara gold mine in Tanzania, where it said pressure was building for a settlement of its row with the government.

Acacia, majority-owned by Barrick Gold, is embroiled in a long-running tax dispute with Tanzania.

It has cut output by a third since the government banned the export of mineral concentrates in 2017.

Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) slipped to $24mn for the three months ending March 31, from $44 a year earlier.

Gold output dropped 13% to 104,899 ounces during the quarter, due to problems preventing access to higher-grade ore at the North Mara Gokona underground mine, the company said.

Iberdrola

Leading wind energy producer Iberdrola raised its 2019 guidance for net profit and dividend growth on Thursday, and said it might bid for UK distribution network operator Electricity North West (ENW).

It said a buoyant first quarter performance was led by a strong showing at its network businesses. That enabled it to raise its full-year net profit and dividend percentage growth target from the mid- to the high single-digits, it said.

First quarter net profit at Iberdrola, which supplies energy to more than 30mn people globally, rose 15% to €964mn ($1.08bn).

Core profit increased 12% to €2.6bn thanks to improved profit margins in its home market and strong growth in its Brazilian and US grid divisions after tariff revisions.

Iberdrola said over 11% of core profit came from the networks of Neoenergia, the Brazilian unit it is trying to float on the Sao Paulo market this year.

Zozo

Japanese online fashion retailer Zozo Inc said it expects its profit to recover in the current fiscal year, after booking its first-ever annual drop in earnings on a failed experiment with bespoke tailoring and clashes with fashion brands.

But Zozo's results also showed its liabilities mounting and cash position dwindling, underscoring worries about the finances of the company that runs the popular Zozotown online mall.

Zozo's operating profit for the year ended March fell 21.5% to ¥25.7bn ($229mn). That was worse than its most recent forecast of ¥26.5bn, which had been marked down from an initial projection of ¥40bn.

PSA Group

Peugeot maker PSA Group reported a 1.1% decline in first-quarter revenue, as a sales decline outside Europe and currency challenges outweighed pricing improvements.

The French car maker's shares fell on Thursday after it said revenue dropped to €17.98bn ($20.05bn) in the January-March quarter from 18.2bn a year earlier.

Global sales volumes fell 15.7% to 886,400 vehicles in the quarter.

Excluding Iran, deliveries fell 6.1%, weighed down by a 30% decline in Latin America.

Overall revenue was broadly in line with analyst estimates in an Infront Data poll, and PSA reiterated its medium-term guidance for an average 4.5% automotive operating margin over the 2019-2021 period.

SKF

Sweden's SKF reported forecast-beating first quarter operating earnings boosted by strong results in its main industrial business, showing its ability to handle slowing demand ahead.

The company, which competes with companies such as Germany's Schaeffler, said its first-quarter operating profit rose to 2.66bn crowns ($282mn) from 2.63bn a year ago, beating the 2.42bn crowns expected in a poll of analysts.

SKF said its automotive business in the quarter was hit by significantly reduced sales volumes in North America and lower sales volumes in Europe and Asia.

Stora Enso

Finnish paper firm Stora Enso reported higher-than-expected first quarter profit on Thursday helped by its biomaterials division.

The pulp, paper and packaging board maker said its adjusted operating profit in the quarter was €324mn, landing in the upper end of forecasts of 285-326mn in a Reuters analyst poll.

That was down 12.3% from a year earlier.

In February Stora Enso said it would cut annual costs by €120mn and lower capital expenditure by €50mn due to increased market uncertainty.

SNB

The Swiss National Bank reported a first-quarter profit of 30.7bn Swiss francs ($30.10bn) on Thursday, highlighting the volatility its massive balance sheet creates for the central bank's earnings.

Its made a profit on foreign currency positions of 29.3bn, recorded a valuation gain of 0.9bn on gold holdings and generated profit on Swiss franc positions of 0.6bn, it said in a statement.

The result contrasted with a 6.8bn franc loss in the first quarter of last year.

Swedbank

Swedish bank Swedbank reported first-quarter profit above market expectations on Thursday but admitted to past anti money-laundering shortcomings and said it was cooperating with authorities, including those of the United States.

Operating profit rose to 6.63bn Swedish crowns ($703mn), from 6.39bn a year earlier.

Analysts on average were expecting operating earnings of 6.09bn, according to a poll.

Swedbank is the subject of a joint investigation by the Swedish and Baltic financial watchdogs.

Broadcaster SVT reported the bank processed gross transactions worth up to €20bn a year from high-risk, non-resident clients, mostly Russian, through its Estonian branch between 2010 and 2016.

Visa

Visa Inc reported higher expenses and lower spending by people using its cards abroad on Wednesday even as increased overall consumer spending drove quarterly profit 14% higher.

Excluding the impact of currency fluctuations, growth in cross-border volume shrank to 4% from 11% a year earlier.

Total transaction volumes in Europe fell to $536bn in the reported quarter from $558bn a year earlier.

The company also spent more on rewards and incentives such as airport lounge access, roadside assistance programs and travel insurance, which pushed up operating expenses by 7%.

However, overall revenue rose 8% to $5.49bn, beating analysts' average estimate of $5.47bn, largely helped by higher transaction volume in the United States, its largest market.

Barclays

British bank Barclays rebounded into net profit in the first quarter, as a year-earlier heavy US fine was not repeated this time around, it said on Thursday.

Profit after taxation hit £1.04bn ($1.34bn, €1.20bn) in the three months to the end of March, Barclays said in a results statement.

That contrasted with a net loss of £764mn a year earlier, when it had faced a huge $2bn fine to resolve a US fraud case involving mortgage derivatives sold in the run-up to the 2008 global financial crisis.

However, the lender added on Thursday that underlying pre-tax profits sank 10% to £1.5bn, after suffering a tough quarter for investment banking.

Last updated: April 25 2019 09:38 PM


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