Sephaku Holdings: Growth under construction

After releasing a trading statement for the 6 months ended 30 September 2015, Sephaku ended sharply lower yesterday, down 4.93%. This was despite the group advising shareholders it expected to report an increase of between 559% and 579% in earnings per share to between 9 cents and 9.4 cents. In addition, the group expects to deliver headline earnings per share of between 8.92 cents and 9.32 cents, an increase of between 546% and 566%, up from a headline loss of 2 cents per share in the previous corresponding period. Lastly, the group expects to release its results on or about the 5th of November 2015.
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British American Tobacco: Shrugs off disappointing volumes

Yesterday, British America Tobacco settled nearly 1% higher, despite releasing a disappointing update for the 9 months ended 30 September 2015. In the release, BTI reported a decline in its 3rd quarter revenue, mainly due to a decline in smoking rates and adverse currency fluctuations. At current exchange rates revenue fell by 6.5% compared to a year ago, with the number of cigarettes sold declining by 1.8% to 487bn. Looking forward, the group expects to the results to moderate in the 4th quarter, boosted by an increase in advertising spend and its expansion into new generation products.
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Apple Inc: Massive cash stash

After U.S. markets closed yesterday, Apple beat expectations with results for its fiscal 4th quarter. For the period, revenue came in at $51.5bn, marginally higher than expectations of $51.11bn, while earnings came in at $1.96 per share, above expectations of $1.88 per share. This was partly due to a 99% increase in revenues from greater China, which came in at $12.52bn. iPhone shipments jumped by 87% over the past year. In addition, Apple’s cash pile now sits a colossal $206bn, but Apple still has no firm plans on how to use it. To put this in perspective, Apple now has enough cash to give every American $657 apiece – which is remarkably close to the retail price of an iPhone. Lastly, the group expects revenues of between $75.5bn and $77.5bn for the holiday quarter, in line with expectations of $77.17bn.
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MTN: A fine share

Yesterday, negative headlines from MTN sent the stock plunging 12.49% after the Nigerian Communications Commission imposed a fine of $5.2bn, or around R70bn, on MTN Nigeria. This fine relates to the timing of the disconnection of 5.1mn MTN Nigeria subscribers who were disconnected between August and September 2015. The fine’s calculation is based on a fee of N200,000 (R13,700) for each unregistered subscriber. MTN Nigeria is currently in discussions with the NCC to resolve the matter. Aside from the fine, it was MTN’s communication with stakeholders that left much to be desired, as the obligatory SENS announcement came out only hours after the news broke via regular media channels.
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American Airlines: Sky-high results

American Airlines, the world’s largest airline by fleet-size and revenue, released better-than-expected results on Friday. Despite the positive numbers, the group’s share price fell as much as 4.7%, before recovering most of the losses to end 0.7% lower. For the third quarter, the group saw revenues decline by 3.9%, as airlines slashed prices across the board. However, it was a 43% decline in the AA’s fuel bill, which saved $1.46bn and the quarter. As a result, the group increased its net income by 80% to $1.69. Excluding special items, the group posted an adjusted profit of $1.9bn, the highest quarter in AA’s history. Lastly, this translated into earnings per share of $2.77, beating expectations of a rise to $2.72.
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McDonald’s: Stock hits record highs

Yesterday, McDonald’s surged 8.12% to a new all-time high after the group posted better-than-expected results for the third quarter. Despite currency headwinds, causing revenue to fall 5% to $6.62bn, from $6.99bn previously, it was still much higher than estimates of a decline to $6.41bn. This unexpected boost was partly attributed to a strong recovery in China, following a supplier issue last year. For the period, earnings rose to $1.40 per share, up from $1.09 a year ago, largely surpassing estimates of an increase to $1.27. This is clear evidence that the reorganization of the business, which includes a conversion to franchised restaurants, is gaining traction.
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General Motors: The ‘General’ leads the way

Yesterday saw General Motors jump 5.8%, following results that crushed expectation. Revenue for the period came in at $38.8bn, higher than expectations of $38.55bn, boosted by strong demand for trucks in North America. In addition, with the help of improved profit margins in China and North America, the group posted adjusted earnings of $1.50 per share, up from $0.97 a year earlier and much higher than expectations of an increase to $1.18 per share. However, it must be noted, that with a host of once-off items, including a recall and a $1.5bn settlement to the Justice Department, the group only delivered a net income of $0.84 cents per share.
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iPhones help boost Verizon’s subscriber numbers

Verizon, the largest wireless communications provider in the United States, released better-than-expected results yesterday, as heavy promotional activity helped the company attract subscribers to the launch of Apple’s new iPhone. In response, the group added 1.3mn postpaid retail subscribers in the quarter, up from 1.1mn in the second quarter. As a result, this helped the group increase its total operating revenue by 5% to $33.16bn, beating estimates of $32.94bn. Verizon thus saw net attributable income increase by 9.3% to $4.04bn. Lastly, excluding items, the company reported earnings of $1.04 per share, marginally higher than the $1.02 expected by analysts.
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Morgan Stanley: Another disappointing big bank result

Yesterday, Morgan Stanley’s shares dropped 4.8% following a massive miss in its results. For the third quarter, Morgan Stanley posted adjusted earnings of $0.42 per share, down from $0.65 a year ago, and much lower than expectations of a decline to $0.62. In addition, revenues for the period came in at R7.33bn, way below expectations of $8.54bn. This was, in part, due to a 17% fall in trading revenues, as investors fled the bond, currency and commodity markets. This result capped a generally disappointing quarter for the six big U.S. banks, with only Wells Fargo managing to increase revenue during the quarter.
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General Electric: Meets and beats expectations

On Friday, General Electric delivered results that beat expectations and sent the stock 3.4% higher to trade at a 12-month record. For the third quarter, the group declared earnings of 29 cents per share, above expectations of 26 cents a share, but much lower than the 38 cents per share a year ago. In addition, the group saw revenues decline by 1.3% to $31.68bn, weighed down by a 16% fall in its segment which supplies equipment and services to oil and gas customers. Despite the decline, revenue also beat expectations of a decline to $28.57bn, thanks to a strong performance in its aviation and its power and water segments.
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