BHP Billiton end marginally lower yesterday, down 0.26%, at R197.53, after the group released an update on the Samarco disaster. The detailed report into the reasons for the dam’s failure, which comes after a 10-month investigation, ultimately did not assign blame for the disaster. However, the report did highlight a series of issues starting with construction flaws in 2009. These required design changes and the incorporation of greater water saturation. The increased water saturation, which resulted in liquefaction, was a key element which led to the failure of the dam. The group has already undertaken studies of its ten largest and most significant dams in order to review their safety.
Apple ended marginally lower on Monday, down 0.11% at $106.82 per share, weighed down by news that the European Commission is likely to rule against Ireland’s tax dealings with Apple later today. This comes after the European Commission accused Ireland of dodging international tax rules in 2014, by way of letting Apple shelter profits from tax collectors in return for maintaining jobs. In response, both Apple and Ireland have rejected the accusation, stating that they would both appeal any ruling that goes against them. As it stands, the Commission is likely to recommend a figure in back taxes that it expects to be collected, around €1bn, but it will be up to Irish authorities to determine exactly what is owed by Apple.
News broke on Friday that Anheuser-Busch InBev expects to cut around 3% of its workforce, in the next three years, following the takeover of SABMiller. This culling, of up to 5,500 jobs, will be done in an attempt to maximise savings from the combination of the world’s largest brewers. The cuts will be implemented gradually and will form a part of the $1.4bn savings sought by AB InBev. Although this is a substantial amount, this level of savings is actually less than some of AB InBev’s other combinations. Lastly, the group announced that SABMiller’s head office will be integrated into its headquarters in Leuven, Belgium, and its management office in New York.
On Thursday, Discovery ended marginally higher, up 1.29% at R121.25, following the release of a trading statement for the year ended 30 June 2016. In it, the group advised shareholders it expects normalized headline earnings to increase by between 5% and 10%. However, on a per share basis, normalized earnings per share are set to increase by between 0% and 5%, to between 672.2 cents and 705.8 cents, up from 672.2 cents in 2015. However, it must be noted that the group’s results were affected by increased investment in new initiatives, including the investment in the planned expansion of its business model into banking, and costs arising from growth in its international operations.
On Wednesday, HP released its latest quarterly results, with group beating both earnings and revenue expectations. For the quarter ended 31 July, the group reported a 3.8% decline in revenue to $11.89bn, but slightly higher than expectations of a decline to $11.46bn. In addition, HP reported adjusted earnings of 48 cents per share, beating estimates of 44 cents per share. The decline in revenue was mainly attributable to a 14% drop in its printing business, but this was partly offset by a 4% increase in PC sales. Lastly, for the current quarter, the group expects to report adjusted earnings of between 34 cents and 37 cents per share, sharply lower than estimates of between 43 cents and 46 cents per share.
On Tuesday, a UK court ruled that SAB’s shareholders can be treated as two separate groups when they vote on the brewer’s £79bn takeover by Anheuser Busch InBev. This comes after SABMiller made a request that Altria and Bevco be treated as a separate class in order to make the voting as fair as possible. In the Judge’s opinion, the request from SAB was understandable as it lowers the risk of a challenge from dissenting shareholders who might oppose the vote, considering that Altria and Bevco have agreed to a different offer arrangement. Following the ruling, the deal will require 75% approval by SAB shareholders, excluding Altria and Bevco, who together control about 40% of the shares.
On Monday, RLF ended sharply higher, up 5.71%, after the group released a trading statement for the year ended 30 June 2016. In it, the group advised shareholders that it expects its earnings per share to come in at between 50.4 cents and 54 cents, representing an increase of between 38% and 48% compared to the 46.5 cents reported in 2015. Meanwhile, headline earnings per share are set to increase by between 35% and 45%, to between 51.6 cents and 55.4 cents, up from 38.2 cents reported in the previous corresponding period. Lastly, the group’s results for the period are set to be released on or around the 19th of September 2016.
Estee Lauder ended lower on Friday, down 3.54%, following the release of its latest quarterly results. During its 4th quarter, the group reported revenue of $2.65bn, marginally lower than expectations of $2.66bn. This was partly due to a 0.7% drop in skin-care sales, which would have increased by 3% if currency effects were excluded. Overall, the group reported earnings, excluding certain items, of 43 cents per share, beating expectations of 40 cents per share. However, the group’s full-year profit forecast came in slightly lower than analysts’ estimates. Lastly, in the year through June, EL expects profits to come in at between $3.38 per share and $3.44 per share, compared to estimates of $3.53 per share.
On Thursday, the world’s largest retailer, Wal-Mart, reported quarterly results which beat analysts’ estimates. During the quarter, the group recorded a 0.5% increase in revenue to $120.85bn, marginally higher than expectations of an increase to $120.16bn. In addition, Wal-Mart saw its earnings for the 2nd fiscal quarter come in at $1.07 per share, slightly lower than the $1.08 per share recorded a year ago, but beating estimates of $1.02 per share. Lastly, the group’s results were boosted by a 1.6% increase in Wal-Mart’s same-store sales in the US, better than estimates of a 1% increase and higher than the 1% growth recorded during the 1st quarter.
On Wednesday, Cisco Systems traded sharply lower in after-hours trade, despite the release of better-than-expected quarterly results. This decline was mainly due to the group’s plans to cut up to 5,500 jobs, or up to 7% of its workforce, as it makes the shift from its legacy hardware to higher margin software. For the 4th quarter, the group reported a 1.6% decrease in revenue to $12.64bn, slightly higher than expectations of $12.57bn. Despite the decline in revenue, the group’s net profit increased to $2.82bn, or 56 cents per share, up from $2.32bn, or 45 cents a share, a year earlier. Lastly, excluding certain items, Cisco reported earnings per share of 63 cents, beating analysts’ estimates of 60 cents.