In SA, the following companies are expected to report next week:
- Vodacom (3Q23 Earnings Update) – At the half-year point, the group reported a 9.5% y/y decrease in headline earnings per share (HEPS), despite a 7.7% increase in total revenue. This was mainly due to start-up losses in Ethiopia as well as increased finance costs. For FY23, the decline in HEPS is expected to be narrower at just 2.1% y/y, while group revenue is anticipated to increase 15.3% y/y.
- Glencore (4Q22 Production Update) – In a previous update, management left its production guidance for FY22 unchanged given easing supply-chain pressures and a recovery from other adverse impacts. At the time, management also provided guidance for FY23, with group EBITDA set to fall ~20% y/y to $28.7 billion (Bloomberg: $26.8 billion) and free cash flow expected to drop ~26% y/y to $14.6 billion (Bloomberg: $14.9 billion).
- Anglo American (4Q22 Production Update) – Back in December, management noted that full-year production was expected to decrease by 3%, while unit costs would be 16% higher due to ongoing challenges, which included supply chain issues. Looking ahead to FY23, these numbers are expected to improve (production: +5%, unit costs: +3%). The group’s Kumba Iron Ore and Amplats subsidiaries are also expected to provide quarterly updates next week.
Looking at a few corporate-action events, we expect the Nampak 6% and 6.5% preference shares to trade ex-dividend on Wednesday, 1 February 2023. Several companies, including Sygnia, Astral Foods, and Netcare, will host AGMs throughout the week next week.
The 4Q22 earnings season in the US is in full swing with over 110 companies in the S&P 500 having released results so far. Around 71% of these have reported better-than-expected earnings, with 50% reporting better-than-expected sales.
- The tech sector, which has made headlines repeatedly in recent weeks with several companies announcing mass lay-offs, will again come into focus:
- Google parent-company, Alphabet, is set to report mixed results, with adjusted EPS expected to fall 11.7%, despite a 6.4% increase in revenue.
- Amazon is also expected to report a mixed performance (adjusted EPS: -38.5%; revenue: +6.0%)
- Adjusted EPS and revenue for Apple is set to decrease 7.0% and 1.7%, respectively.
- Results are also due from social media tycoon Meta, as well as the world’s largest online-dating service provider, Match Group.
- Fast food and beverage specialists, McDonalds, and Starbucks will, according to Bloomberg, report healthier numbers – consumer staples have largely been less affected by inflation and other macroeconomic trends, compared to consumer discretionary goods.
- Pfizer (revenue: +2.2%) and Merck & Co (revenue: +0.72%) are expected to release subdued 4Q22 results amid broader weakness in the pharmaceutical sector post Covid-19.
- Some of the other big names to look out for include NXP Semiconductors, Align Technology, Eli Lilly, and Eaton.
In Europe:
- Swiss-based pharmaceutical giants Novartis (revenue: +0.8%) and Roche (revenue: -0.3%) will report lacklustre growth – a trend that has also been seen among their US competitors.
- Petroleum and gas company, Shell, is set to report solid double-digit growth in revenue, as energy companies around the world continue to benefit greatly from higher commodity prices, as well as persistent demand and supply imbalances. Adjusted EPS for the company is expected to increase more than two-fold.
Releases in the Asia Pacific region will be headlined by Samsung:
- Revenue and adjusted EPS for the electronics giant is expected to fall 4.9% and 51.5%, respectively, due primarily to weakness in the global semiconductor industry, caused by volatile inventory adjustments from customers along the supply chain.
Economics Weekly – Uncertainty always comes with turning points
Forecasting turning points is a challenging task, particularly during uncertain times. While we think a turning point in monetary policy is imminent, in line with softer inflation and below trend growth, risks persist that could skew point forecasts in either direction. The Monetary Policy Committee (MPC) published its latest forecasts at its January meeting, highlighting key risks for the macroeconomic outlook in 2023.
