On Tuesday, Coca-Cola released a mixed set of results for the first quarter. Revenues for the period came in at $9.118bn, beating estimates of $8.874bn, but net revenues declined by 11% over the quarter. The group also recorded a 20% decline in quarterly profit, mainly due to higher costs related to the refranchising efforts of Coca-Cola’s North American bottling operations. As a result, adjusted earnings per share dropped to 43 cents, slightly lower than estimates of 44 cents. Despite the tough quarter, Coca-Cola remains optimistic for the rest of the year, with the group now expecting full-year earnings to only decline by between 1% and 3%, which would be slightly better than previous estimates of a drop of between 1% and 4%.
On Monday, Halliburton released its latest quarterly results, with the group beating analyst estimates for both earnings and revenue. During the period, the company saw revenues come in at $4.279bn, 2% higher than the $4.198bn reported a year ago and marginally higher than expectations of an increase to $4.267bn. Furthermore, Halliburton reported a net loss of $32mn, or 4 cents per share, for the quarter, a sharp improvement compared to the loss of $2.4bn, or $2.81 per share, recorded a year ago. Excluding costs related to the extinguishment of debt, Haliburton saw earnings come in at 4 cents per share, slightly higher than estimates of 3 cents per share.
On Friday, General Electric released its latest quarterly results, with the industrial giant surpassing analysts’ estimates for both earnings and revenue. In the first quarter, GE saw revenues come in at $27.66bn, slightly higher than expectations of $26.41bn, but 1% lower than that reported a year ago. The drop was partly due to lower sales in the group’s oil and gas and lighting businesses. Nevertheless, the group saw earnings from operations attributable to GE shareholders surge to $858mn, sharply higher than the $248mn recorded a year ago. Adjusted earnings per share were flat however at 21 cents, although this was more than enough to beat estimates of a decline to 17 cents.
On Tuesday, Bank of America reported strong results, with the group surpassing expectations for both earnings and revenue. During the first quarter of 2017, the group saw total revenues increase by 7% to come in at $22.2bn, higher than estimates of $21.61bn. This better-than-expected figure was partly due to a 29% surge in fixed-income trading revenue and a 7% increase in equities trading revenue. Meanwhile, net interest income was in line with expectations at $11.1bn, given that the loans business grew by 6% during the first quarter. Overall, Bank of America saw net income surge by 44% to $4.35bn, while on a per share basis, earnings came in at 41 cents, easily beating expectations of 35 cents.
JPMorgan released its first quarter results on Thursday, with the group easily surpassing expectations for both earnings and revenue. During the quarter, revenues came in at $25.586bn, up from the $24.08bn reported a year ago and marginally higher than estimates of $24.877bn. This larger-than-expected increase was mainly due to strong trading revenue, which beat expectations by more than $1bn to come in at $6.515bn, while average core loans increased by 9% over the last year. Earnings surged at JPMorgan to $1.65 per share, far better than estimates of $1.52 per share and up from the $1.35 per share recorded in 2016.
PSG released a trading statement yesterday in which it reported an increase in its SOTP value to R240.87 per share. This represents a 29% increase compared to the R186.67 value reported in the previous period. PSG is an investment holding company, and the group uses the Sum-Of-The-Parts (SOTP) value and recurring headline earnings per share as benchmarks to provide management and investors with a realistic and transparent way of evaluating its performance. Just under 50% of PSG’s value can be attributed to Capitec and the strong performance in banks yesterday no doubt assisted with the strong share price appreciation on the day.
WalMart announced yesterday it will cut hundreds of jobs in its latest attempt to reduce costs. As it stands, the layoffs will focus on the international, technology and Sam’s Club divisions. This follows the group’s decision to cut around 1,000 corporate positions earlier this year, bringing the total number of eliminated jobs to roughly 18,000 since the start of last year. WalMart’s spokesperson confirmed while the process is regrettable, it’s all about managing the group’s costs and capital efficiently. No doubt the rise of low cost competitors is putting significant pressure on the group to transform.
Tesla surged 3.26% to close at $312.39 per share. This move helped pushes Tesla’s market capitalisation higher than General Motors. It now makes Tesla the largest and most valuable car maker in the United States. This also marks the first time in the modern automobile era that the most valuable US car maker is not based in Detroit. By the close of trade, Tesla had a market capitalisation of $50.95bn, slightly higher than GM’s $50.886bn. This comes after the luxury electric car marker surged around 35% over the last month, buoyed by bets that South African born Elon Musk will revolutionise the way human get from point A to point B. Despite the surge in its share price, Tesla remains far smaller than Toyota Motor Corp, which has a market capitalisation of $173bn.
The European Commission has given Rupert Murdoch’s Twenty-First Century Fox the go ahead for its $14.5bn acquisition of Sky. This decision was based on the fact Fox and Sky are active in different markets in Europe. Existing rules in EU countries mean rivals will still retain access to Sky films and TV channels. However, despite the approval, the deal’s real test lies ahead as the groups wait for approval of British regulators. As it stands, Ofcom is still set to advise on whether the deal would give Murdoch’s companies too much control of British media, given that Murdoch already owns The Times and The Sun newspapers, as well as his already formidable 39% stake in Sky.
On Thursday, Unilever released the results of a business review in which it considered ways to increase value for shareholders. This comes after the unsuccessful $143bn offer from Kraft Heinz which jolted the group into reviewing its business operations. Unilever has decided it would speed up cost savings, sell its shrinking margarine business and consider whether to scrap its dual Anglo-Dutch listing. The scrapping of its secondary listing would enable the group to more easily do large acquisitions. Unilever also announced shareholders would get a €5bn share buyback, the first since 2008, as well as a 12% increase in its dividend.