On Tuesday, news reports surfaced that US-based Praxair had made a fresh approach to merge with Linde, the German industrial gases group. This comes after the two parties walked away from talks in September, after failing to agree on where important functions would be located and who would occupy key positions. In addition, Linde’s CEO announced last month that the reopening of talks was not an option and that the group would rather proceed with a restructuring process. Now, the executive board of Linde is allegedly reviewing the new proposal, which could result in the creation of a $60bn market leader. Praxair closed sharply higher following the news reports, up 2.94%.
On Monday, Oakbay released a trading statement for the six months ended 31 August 2016, whereby it advised shareholders that it expects its results to differ by at least 20% compared to the previous corresponding period. As a result, the group currently expects to report a loss of R65.174mn during the period, a deterioration of 49.8% compared to the loss of R43.5mn reported a year ago. As a result, ORL expects both its basic loss per share and headline loss per share to increase by 26.2% to come in at 5.3 cents, up from 4.2 cents previously. The group’s results for the period are set to be released on or around the 30th of November 2016.
On Friday, BHP Billiton released a SENS whereby it announced that an additional $181mn has been approved by the group in order to fund the remediation and compensation programs relating to last year’s Samarco tailings dam disaster in Brazil. Furthermore, the amount will come out of the $1.2bn provision that BHP Billiton has already recorded in its accounts, but will only be released to Samarco as required and subject to the achievement of key milestones. Samarco’s operations are set to be restarted sometime next year, but no formal timeline has been set as the joint venture still needs to receive approval from the relevant local authorities.
On Wednesday, Microsoft shed 1.18% to settle at $60.40 per share, following news reports that the group is set to receive approval from EU regulators in its $26bn bid to acquire LinkedIn. This comes after Microsoft made certain concessions regarding competition concerns, including the decision to allow LinkedIn’s rivals to retain access to its software such as Outlook. In addition, Microsoft would need to give hardware makers the option of installing competing professional social networks on computers after the acquisition. Should the deal go through, the group will be able to add a suite of marketing, sales and recruiting services to its core business products.
On Tuesday, HPE shed 1.08% to settle at $22.87, following the release of mixed results for its fiscal 4th quarter. During the period, HPE saw revenue decline by 7.2% to come in at $12.5bn, slightly lower than expectations of $12.8bn. This decline was partly attributable to a 34% drop in networking revenue, while server revenue fell by 7%. In addition, the group reported a 78% drop in net income to $302mn. However, on an adjusted basis, earnings came in at 61 cents per share, slightly higher than estimates of 60 cents per share and in-line with the group’s forecast of between 58 cents and 63 cents a share. HPE expects to report adjusted earnings of between 42 cents and 46 cents for the current quarter, in-line with estimates.
On Monday, Astral gained 0.16% to settle at R121.50 per share, following its latest results. During the period, the group reported a 6.1% increase in revenue to R11.953bn, up from R11.265bn previously. However, despite the increase in revenue, gross profit declined by 25.8%, while the group’s operating profit fell by 50.1%. Overall, Astral reported a 52.1% drop in headline earnings per share to 965 cents, while earnings per share declined by the same margin to 964 cents. This sharp decline can be partly attributed to higher feed costs and an adverse operating environment at the group’s Mozambique operations. The board declared a final dividend of 100 cents per share.
On Friday, Facebook shed 0.65% to close at $117.02 during the normal session, before gaining more than 1% in after-hours trade following its announcement that it would launch its first share buyback program. As it stands, the social media giant will set up a $6bn buyback program, with the program set to start during the 1st quarter of 2017. This comes as the group seeks to appease shareholders who are waiting for results in some of the group’s new potentially risky growth areas. Facebook currently has around $26bn in cash and marketable securities and will deploy some of that in its buyback program, while using the rest to grow the business.
On Thursday, Wal-Mart, the world’s largest retailer, released its latest results for the quarter. In it, the group missed revenue estimates, but surpassed earnings expectations. During the period, the group saw sales come in at $118.08bn, 0.7% higher than the previous corresponding period, but slightly lower than expectations of an increase to $118.7bn. This revenue miss was partly due to weaker-than-expected US comparable store sales which increased by 1.3%, slightly lower than estimates of 1.2%. Overall, Wal-Mart saw its earnings come in at 98 cents per share, slightly lower than the 99 cents a share recorded a year ago, but surpassing estimates of a decline to 96 cents per share.
On Wednesday, PPC released its results for the six months ended 30 September 2016, with the group reporting a 15% increase in revenue to R5.2bn. In addition, PPC saw its gross profit came in 6% higher, despite product pricing pressures, while its EBITDA was flat at R1.146bn, up from R1.144bn previously. Overall, PPC’s reported a 76% decline in its earnings per share to 13 cents, down from 54 cents at the end of March, while headline earnings per share declined by 66% to 14 cents. This can be mainly attributed to increased finance costs, revaluation losses on foreign currency monetary items and the non-recurrence of the previous period’s exceptional profit on the sale of non-core assets.
On Tuesday, Home Depot shed 2.56% following the release of its latest quarterly results, despite the group surpassing estimates for both earnings and revenue. During its fiscal 3rd quarter, Home Depot recorded sales of $23.2bn, up from the $21.82bn reported in the previous corresponding period and better than estimates of $23.05bn. This increase in sales was primarily due to a 5.5% increase in same-store sales during the period, easily beating estimates of a 4.4% increase. The group saw earnings come in at $1.60 per share, better than estimates of an increase to $1.58 per share and higher than the $1.36 per share recorded a year ago.