Millennial and Generation Z customer spending grew dramatically for American Express. Photo / STR, NurPhoto, Getty Images
Keeping you up to date with the latest market moves, in association with Investment firm Jarden.
International
US
Network services provider AT&T has reported first-quarter results of 2023 with revenues of US$30.1 billion, up 1.4 per cent compared to the same period in 2022, mainly due to growth in Mexico and consumer wireline revenues, as well as higher mobility revenues.
Operating expenses were US$24.1 billion, stable with US$24.2 billion in the previous year’s corresponding quarter due to lower domestic wireless equipment costs and associated selling costs.
Domestic wireless service revenues were up 5.2 per cent, and consumer broadband revenues were up 7.3 per cent due to AT&T’s fibre revenue growth of 30.7 per cent. AT&T have stated they are on track to achieve its US$6 billion-plus run-rate cost savings target before the end of 2023.
Financial services provider American Express reported first-quarter results for 2023, containing record quarterly revenue of US$14.28 billion, up 21.0 per cent from the same quarter in 2022.
Reported earnings were down 12.1 per cent on the same basis. Management said Millennial and Generation Z customer spending grew 28.0 per cent, the highest among the demographic split.
American Express has reiterated its full-year guidance, expecting revenue growth of 15.0 to 17.0 per cent and earnings per share between US$11.00 and US$11.40. The company’s stock has fallen 2.3 per cent at the time of writing.
Rest of the World
Taiwan Semiconductor Manufacturing Company announced financial results for the first quarter of 2023, reporting a revenue of NT$508.7b (NZ$26.9b) and net income of NT$207.0 b.
Compared to the same quarter last year, revenue increased by 3.6 per cent, while net income increased by 2.1 per cent. Compared to the fourth quarter of 2022, revenue decreased by 18.7 per cent and net income decreased by 30.0 per cent.
The company attributed this to weakening macroeconomic conditions and softening end market demand. Management expects business to continue being impacted by customers’ inventory adjustments in the second-quarter of 2023.
They anticipate gross profit margin to be between 52.0 and 54.0 per cent and an operating profit margin between 39.5 and 41.5 per cent.
Finnish communication company Nokia released its first-quarter report for 2023.
The company has grown 9.0 per cent year-on-year in constant currency and maintained its outlook for the year. Network infrastructure grew 13.0 per cent, supporting the net sales growth and continued operating margin expansion.
Mobile networks net sales grew 13.0 per cent due to the ramp-up of 5G deployments in India, more than offsetting a slowdown on the North America side. Nokia Technologies net sales declined 22.0 per cent in the quarter, with management giving guidance Nokia Technologies will return to an annual run-rate of €1.4 to 1.5b of net sales by the end of 2023.
Commodities
Bitcoin has dropped by 3.2 per cent to $28,319, moving away from the US$30,000 level which it reached last week for the first time in 10 months. Other cryptocurrencies, including Ether and smaller cryptos, have also weakened, with the former dropping 0.8 per cent at the time of writing.
Australia
Multinational supply chain logistics company Brambles reported a 9.0 per cent increase in sales for the first nine months of the fiscal year ending June 2023, with growth in all regions despite citing challenges with pallet availability.
Management has upgraded its guidance for the remainder of the fiscal year, expecting total sales revenue growth of 14.0 to 15.0 per cent and underlying profit growth of 17.0 to 19.0 per cent that includes the ongoing short-term transformation costs.
Sales revenue growth was driven by both current and prior-year pricing initiatives to recover cost-to-serve increases, with increased cycle times and pallet prices globally.
Bank of Queensland released its first-half results for the fiscal year ending August 2023, reporting revenue of A$909 million, up 9.0 per cent from the previous corresponding period, with net interest income up 12.0 per cent on the same basis.
Earnings for the period fell 98.0 per cent to A$4 million. The board has declared a fully franked dividend of A$0.20 per share, to be paid on June 1, 2023.
Management anticipated mortgage competition and accelerated deposit competition, but was focused on diversification through retail and business banking portfolios, with a fiscal year end dividend payout target range of 60.0 to 75.0 per cent of cash earnings.
Additionally, Bank of Queensland’s common equity tier 1 ratio is expected to be between 10.25 to 10.75 per cent throughout the remainder of their fiscal year end.
New Zealand
Annual inflation for the first-quarter of 2023 came in at 6.7 per cent, below the 7.3 per cent forecast made by the Reserve Bank of New Zealand (RBNZ) at February’s Monetary Policy Statement.
Non-tradables inflation was up 6.8 per cent over the year despite the 1.7 per cent quarterly increase being 0.2 percentage points below RBNZ’s February MPS forecast.
Within the total CPI basket, 46.3 per cent of this was made up of food prices and housing related costs, with both showing increases of 3.7 per cent and 1.0 per cent respectively when compared to the fourth-quarter of 2022.
The S&P NZX 50 was down 0.3 per cent at the time of writing, with majority of industry-specific indices down. The NZD weakened against the USD by 0.4 per cent.
Jewellery retailer Michael Hill International signed an agreement to purchase the business of Australian mid-range jewellery and watch retailer Bevilles, expecting completion in the second-quarter of 2023.
The purchase of Bevilles’ represents a net enterprise value of A$45 million. This acquisition is in line with the group strategy to upgrade its brand and expand its addressable market.
The purchase of Bevilles provides a complementary brand to Michael Hill and unlocks growth opportunities, noting Beville’s sales mix is about 60 per cent watches and gold and silver jewellery compared to MHJ’s current sales mix of the equivalent categories of about 28 per cent. Shares ended positive, up 3.8 per cent on market close.
Coming up today
Three listed energy & commodity companies will report earnings this morning, BHP Group, Woodside Energy and Whitehaven Coal.
For more information on the latest market moves, get in touch with Jarden.
The Jarden Brief is provided for general information purposes only. It reflects views and research available at the time of publication, using external sources, systems and other data and information we believe to be accurate, complete and reliable at the time of preparation. We make no representation or warranty as to the accuracy, correctness and completeness of that information, and will not be liable or responsible for any error or omission. The Jarden Brief is not to be relied upon as a basis for making any investment decision. Please seek specific investment advice before making any investment decision. Jarden Securities Limited is an NZX Firm. A financial advice disclosure statement is available free of charge at https://www.jarden.co.nz/our-services/wealth-management/financial-advice-provider-disclosure-statement/.
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All market pricing and announcements are sourced from Refinitiv, NZX and ASX.
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