Early Morning Call: FTSE 100 in the limelight as AstraZeneca, Unilever, British American Tobacco report earnings
AstraZeneca posted adjusted earnings of $1.38 per share on revenue of $12.2 billion.
UK housing market
The Royal Institution of Chartered Surveyors (RICS) says Britain's housing market suffered the most widespread price falls since 2009, in January, as the run of interest rate increases over the past year weighed on would-be buyers.
RICS house price balance, which measures the gap between the percentage of surveyors seeing rises and falls in house prices, fell to -47, the lowest since April 2009, from -42 in December. The institute said all the indicators point to a further slowdown in the housing market in the coming months, as borrowing costs have risen sharply and household incomes are squeezed by the cost of living crisis.
Earnings
AstraZeneca posted adjusted earnings of $1.38 per share on revenue of $12.2 billion. For AstraZeneca CEO Pascal Seuriot, "2022 was a year of continued strong company performance and execution of our long-term growth strategy."
The group expects to see another year of double-digit revenue growth in 2023, excluding Covid medicines.
Unilever rose 9.2% in the fourth quarter (Q4), beating company-provided analyst estimates of a 8.2% increase.
Redrow posted a revenue similar to its record first half last year at £1.031bn. Operating margins fell 20 basis points to 19.3%, and profit before tax decreased by 2.5% to £198 million.
After the European close last night, the German manufacturing giant Siemens reported better-than-expected quarterly results in its industrial business, and it raised its full-year (FY) sales guidance, boosted by a strong start to its 2023 fiscal year.
The builder of trains and industrial software reported profit at its industrial business of 2.7 billion euros in the fiscal first quarter, beating forecasts for 2.50 billion euros. Revenue rose 8% to €18.1 billion, matching estimates. Siemens said it now expects full-year revenue growth of 7% to 10%. Previously it had expected an increase of 6 to 9%.
Credit Suisse reported its worst annual loss since the 2008 global financial crisis. Credit Suisse posted a FY pretax loss of 1.3bn Swiss Francs, beating estimates of a 3.4bn Swiss Francs loss. Revenue was short of estimates: 14.92bn Swiss Francs , missing expectations of 15.01bn Swiss Francs.
Credit Agricole reported a net income of €1.56bn, up 9% in the fourth quarter. Revenue rose by 2.7% to €5.97bn. The French bank also plans to pay dividend of €1.05 er share.
Walt Disney shares rose 5.5% in extended hours after posting better than expected earnings and revenue, as well as a restructuring plan. Disney reported adjusted earnings per share of 99 cents, ahead of the average analyst estimate of 79 cents. Revenue reached $23.51bn, ahead of Wall Street estimates of $23.4 billion.
Walt Disney announced a restructuring plan, the third one in five years. As part of it, 7,000 jobs will go, that's about 3.6% of the group’s workforce, in an effort to save $5.5 billion in costs and make its streaming business profitable. Under a plan to cut costs and return power to creative executives, the company will restructure into three segments: an entertainment unit that encompasses film, television and streaming; a sports-focused ESPN unit; and Disney parks, experiences and products.
CEO Bob Iger said streaming remained Disney's top priority. Disney+ lost 2.4 million subscribers in the last three months of 2022, its first quarterly decrease, and the streaming media unit lost more than $1 billion in the period.
Walt Disney also vowed to reinstate a dividend for shareholders. Chief Financial Officer Christine McCarthy said the initial dividend would likely be a "small fraction" of the pre-Covid level with a plan to increase it over time.
After Uber yesterday which posted a surprise EPS of 29 cents for the fourth quarter, it is Lyft's turn to post its quarterly earnings. The market expects earnings of 15 cents per share on revenue of $1.15bn.
Paypal Holdings is scheduled to report Q4 earnings tonight after the US closing bell. Analysts forecast earnings of $1.20 on revenue of $7.39bn. In Q3, Paypal earnings and revenue topped expectations, but Q4 guidance was below estimates.
The company forecast will again be investors' main focus, especially expectations for new customer additions. In the first nine months of 2022, PayPal reported net new active accounts of 5.7 million, and forecast 3- to 4 million new active accounts for Q4 2022.
Commodities
US crude inventories rose by 2.4 million barrels, their highest level since June 2021.
US gasoline and distillate inventories also rose last week as demand remained weak. Gasoline stocks rose by five million barrels while distillate stockpiles rose by 2.9 million barrels.
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