Early Morning Call: earnings update - fashion retailers in the doldrums
Yesterday afternoon, after the European market close, LVMH posted sales of €22.7 billion for the fourth quarter of 2022.
Equity market overview
Equity markets closed higher in APAC region, the Australian S&P/ASX 200 posting its fourth week of gains.
In Japan, Tokyo consumer price index (CPI), seen as a leading indicator of nationwide trends, increased by 4.4% in January compared to the same month a year ago. Core CPI in the capital rose 4.3% in January from a year earlier, accelerating from 3.9% in December, and beating market expectations of 4.2%. It was the fastest annual gain in nearly 42 years.
Price increases are likely to moderate from next month as government's energy subsidies start. Still, inflation is likely to remain above the Bank of Japan's (BoJ) 2% target in the coming months.
In the US, the market awaits core PCE price index at 1.30pm. Economists anticipate a 0.3% rise in December month-on-month (MoM), which would take it to 4.4% year-on-year (YoY).
Also, at 1.30pm, personal income and spending for the month of December, and at 3pm, pending home sales for December. Consensus is for a fall of 0.9% MoM.
Yesterday afternoon, after the European market close, LVMH posted sales of €22.7 billion for the fourth quarter (Q4) of 2022, up 9% on Q4 2021, higher than the 7% increase anticipated by analysts.
This is a deceleration compared to the first nine months of the year when the luxury goods group's sales rose by 20%. That marked a deceleration from the 20% growth recorded in the first nine months of the year, but still to full-year (FY) revenue to €79.2bn, compared to the €64.2bn of 2021. FY net income reached €14.1bn, and the group will propose a dividend of €12 per share.
Intel Q4 earnings took shares down heavily last night. The chipmaker issued fourth quarter results that failed to meet analysts' estimates and gave a weaker-than-expected forecast. The group posted earnings of 10 cents per share, adjusted, versus the 22 cents forecast. Revenue reached $14.04bn vs. $14.57bn as expected by analysts.
Intel's revenue declined 32% year-over-year in the fourth quarter which was the fourth consecutive quarter of falling sales as the market for personal computers fell from the Covid boom. Investors can expect more pain in the first quarter. Intel called for adjusted net loss of 15 cents per share after earlier estimates of 24 cents, on $10.5bn to $11.5bn in revenue. Forecasts recently were for $13.93 billion in revenue.
Visa posted earnings of $2.18bn on revenue of $7.9bn, up 12%, its slowest pace of growth in seven quarters. Analysts had expected earnings per share (EPS) of $2.01 and revenue of $7.7bn.
Cross-border volumes jumped 22% year-over-year, lower than a 40% surge in cross-border volumes in the first quarter of 2021. The group's CFO said that "Year-over-year growth rates are going to moderate as we get past the pandemic recovery."
It will be American Express’ turn to post earnings before market open today. Analysts expect earnings of $2.23 per share on revenue of $14.22bn.
Chevron is also scheduled to post its quarterly report. EPS is expected at $4.42 and revenue at $53.83bn. Earlier this week, Chevron announced it was tripling its share buyback programme to $75 billion with a quarterly dividend of 6%.
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