Tag: Breaking News: Earnings

Citigroup posts better-than-expected earnings and revenue
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Citigroup on Friday reported second-quarter earnings and revenue that topped expectations.

Despite the beat, Citi’s revenue fell 1% from a year ago as the decline in markets and investment banking businesses weighed on its results. Citi said the uncertain macroenvironment and low volatility impacted client activity and market performance.

“Amid a challenging macroeconomic backdrop, we continued to see the benefits of our diversified business model and strong balance sheet,” CEO Jane Fraser said in a statement.

Here’s how the New York-based lender fared in the quarter compared with what analysts polled by Refinitiv expected from the banking giant.

Earnings per share: $1.33 vs. $1.30

Revenue: $19.44 billion vs. $19.29 billion

Citigroup’s net income fell 36% to $2.9 billion, or $1.33 per share, from $4.5 billion, or $2.19 per share, last year, pressured by higher expenses, high cost of credit and lower revenue.

“Markets revenues were down from a strong second quarter last year, as clients stood on the sidelines starting in April while the U.S. debt limit played out,” Fraser said. “In Banking, the long-awaited rebound in Investment Banking has yet to materialize, making for a disappointing quarter.”

On the bright side, revenue from personal banking and wealth management increased 6% in the quarter to $6.4 billion driven by strong loan growth.

Citi returned a total of $2 billion to shareholders through common dividends and share buybacks in the second quarter.

Shares of Citigroup dipped 4% on Friday. The stock is up more than 1% year to date, outperforming the SPDR S&P Bank ETF (KBE), which is down about 12%.

Read the earnings release here.

Correction: Citigroup’s net income fell 36% year over year. A previous version misstated the percentage.
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July 14, 2023
JPMorgan Chase beats analysts’ estimates on higher rates, interest income
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Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., at the US Capitol for a lunch meeting with the New Democrat Coalition in Washington, DC, US, on Tuesday, June 6, 2023.

Nathan Howard | Bloomberg | Getty Images

JPMorgan Chase reported second-quarter results before the opening bell Friday.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings: $4.37 adjusted vs. $4 per share

Revenue: $42.4 billion vs. $38.96 billion

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JPMorgan has been a standout recently on several fronts. Whether it’s about deposits, funding costs or net interest income — all hot-button topics since the regional banking crisis began in March — the bank has outperformed smaller peers.

That’s helped shares of the bank climb 11% so far this year, compared with the 16% decline of the KBW Bank Index. When JPMorgan last reported results in April, its shares had their biggest earnings-day increase in two decades.

This time around, JPMorgan will have the benefit of owning First Republic after its U.S.-brokered takeover in early May.

The acquisition, which added roughly $203 billion in loans and securities and $92 billion in deposits, may help cushion JPMorgan against some of the headwinds faced by the industry. Banks are losing low-cost deposits as customers find higher-yielding places to park their cash, causing the industry’s funding costs to rise.

That’s pressuring the industry’s profit margins. Last month, several regional banks disclosed lower-than-expected interest revenue, and analysts expect more banks to do the same in coming weeks. On top of that, banks are expected to disclose a slowdown in loan growth and rising costs related to commercial real estate debt, all of which squeeze banks’ bottom lines.

Lenders have begun setting aside more loan-loss provisions on expectations for a slowing economy this year. JPMorgan is expected to post a $2.72 billion provision for credit losses, according to the StreetAccount estimate.

The bank won’t be able to sidestep downturns faced in other areas, namely, the slowdown in trading and investment banking activity. In May, JPMorgan said revenue from those Wall Street activities was headed for a 15% decline from a year earlier.

Finally, analysts will want to hear what JPMorgan CEO Jamie Dimon has to say about the health of the economy and his expectations for banking regulation and consolidation.

Wells Fargo and Citigroup are scheduled to release results later Friday, while Bank of America and Morgan Stanley report Tuesday. Goldman Sachs discloses results Wednesday.

This story is developing. Please check back for updates.
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July 13, 2023
Nike beats sales expectations, misses on earnings as margins drop
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A customer enters a Nike store along the Magnificent Mile shopping district on December 21, 2022 in Chicago, Illinois.

Scott Olson | Getty Images

Nike reported mixed fiscal fourth-quarter earnings on Thursday, as lower margins weighed on profits.

Here’s how the sneaker giant performed during the quarter compared with what Wall Street was anticipating, based on a survey of analysts by Refinitiv:

Earnings per share: 66 cents vs. 67 cents expected

Revenue: $12.83 billion vs. $12.59 billion expected

The company’s reported net income for the three-month period that ended May 31 was $1.03 billion, or 66 cents per share, compared with $1.44 billion, or 90 cents a share, a year earlier.

Sales rose to $12.83 billion, up about 5% from $12.23 billion a year earlier.

Investors have been eager to see if Nike managed to improve its bloated inventory levels, which have weighed on its margins.

Nike’s margins fell again this quarter, this time by 1.4 percentage points to 43.6%. The company attributed the drop to higher product input costs, elevated freight and logistics costs, an uptick in promotions and unfavorable currency exchange rates.

Other retailers that reported earnings recently noted freight and logistics costs had gone done for them and proved to be a boon for their margins.

Inventories came in at $8.5 billion, flat compared with the prior-year period.

In March, executives said on a call with analysts they were “increasingly confident” the company would be able to exit the fiscal year with healthy inventory levels. They noted sales momentum could lead to “even leaner inventory” than anticipated.

Nike has been relying on its wholesale partners to reduce inventory levels. The push boosted its wholesale revenue over the past few quarters, but didn’t help its margins much.

The company said in March that it expects revenue from that segment to moderate moving forward. Still, Nike recently restored some of the wholesale relationships that it cut when it first began focusing on its direct-to-consumer strategy in 2020.

Both DSW and Macy’s will start selling a range of Nike merchandise again in October, the retailers both announced in June.

Macy’s hasn’t received a shipment from Nike since December 2021, but will now resume selling its apparel, including plus size women’s, big and tall men’s, kid’s, bags and other gear, the department store told analysts during an earnings call. Nike’s more premium offerings appear to be off the table for sale at Macy’s.

The decision to bring Macy’s and DSW back under the Nike fold has left some investors wondering if the company is moving away from its direct-to-consumer strategy.

Investors have also been curious to see how sales have rebounded in China following Covid lockdowns. During Nike’s holiday quarter, China sales came in below estimates. The country overall has since seen an uneven path of economic recovery.

In April, retail sales in China rose 18.4% but came in lower than economists’ forecast of 21%.
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June 29, 2023
Oracle beats on top and bottom lines as cloud revenue jumps
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Larry Ellison, Oracle’s chairman and technology chief, speaks at the Oracle OpenWorld conference in San Francisco on September 16, 2019.

Justin Sullivan | Getty Images

Oracle shares climbed as much as 5% in extended trading on Monday after the software vendor announced fiscal fourth-quarter results and quarterly revenue guidance that exceeded Wall Street’s expectations.

Here’s how the company did:

Earnings: $1.67 per share, adjusted, vs. $1.58 per share as expected by analysts, according to Refinitiv.

Revenue: $13.84 billion, vs. $13.74 billion as expected by analysts, according to Refinitiv.

Oracle’s revenue grew 17% year over year in the quarter that ended on May 31, according to a statement. Net income reached $3.32 billion, or $1.19 per share, compared with $3.19 billion, or $1.16 per share, in the year-ago quarter.

CEO Safra Catz said on a conference call that she expects fiscal first-quarter adjusted earnings of $1.12 to $1.16 per share and 8% to 10% revenue growth. Analysts polled by Refinitiv had expected $1.14 in adjusted earnings per share on $12.34 billion in revenue, which implies 7.8% growth.

The company’s top source of revenue, cloud services and license support, jumped 23% to $9.37 billion. But revenue from cloud licenses and on-premises declined 15% to $2.15 billion.

Revenue from cloud infrastructure totaled $1.4 billion, which was up 76%, accelerating from 55% growth in the prior quarter. That part of Oracle is expanding faster than Microsoft and Google but it’s still much smaller than that of their rivals. Oracle’s gross margin in the unit will continue to expand, Catz said on the call.

Larry Ellison, Oracle’s chair and technology chief, said the ocmpany will introduce a generative artificial intelligence cloud service tied to a partnership with startup Cohere, which has agreed to using Oracle’s cloud infrastructure. Microsoft, which has a partnership with startup OpenAI, offers the Azure OpenAI Service, allowing organizations to deploy large language models for taking human input and generating human-like responses.

“This new service protects the privacy of our enterprise customers’ training data, enabling those customers to safely use their own private data to train their own private specialized large-language models,” Ellison said. Oracle has started using the tool internally, he said.

During the quarter, Oracle said more of its cloud services had received approval for use by U.S. defense and intelligence agencies.

Excluding the after-hours move, Oracle shares have climbed almost 43% so far this year, while the S&P 500 index is up around 13%.

The stock rose 6% in regular trading, its best day in a year, after Wolfe Research analysts upgraded the stock to the equivalent of a buy from a hold based on improving financials along with the company’s position in AI.

WATCH: Oracle named top pick at Jefferies
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June 12, 2023
Disney is set to report earnings after the bell — here’s what to expect
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Writers walk the picket line on the second day of the television and movie writers’ strike outside Disney Studios in Burbank, California on May 3, 2023.

Robyn Beck | AFP | Getty Images

A writers strike, a feud in Florida and ongoing company-wide layoffs — there is a lot more than quarterly earnings for CEO Bob Iger and the Walt Disney Company to address on Wednesday.

As the pandemic era fades, Disney has staged a rapid financial recovery within most of its divisions, from theme parks to theatrical entertainment. Meanwhile, its streaming business has slowed and it continues to face headwinds in its traditional media business as consumers cut cable and advertising revenue plummets.

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Investors are keen to see if the newly returned Iger can overcome these concerns while paving the way for the future with a new succession plan.

The company reports is fiscal second quarter earnings after the bell.

Here are what analysts expect:

Earnings per share: 93 cents per share expected, according to a Refinitiv survey of analysts

Revenue: $21.79 billion expected, according to Refinitiv

Disney+ total subscriptions: 163.17 million expected, according to StreetAccount

Beyond day-to-day operations at the company, shareholders and industry analysts expect Iger to address a number ongoing challenges.

On Monday, Disney expanded its federal lawsuit against Florida Gov. Ron DeSantis, accusing the Republican leader of doubling down on his “retribution campaign” against the company by signing legislation to void Disney’s development deals in Orlando.

Additionally, the company is already seeing rippling effects from the ongoing writers strike, including the production shutdowns of Marvel Studios’ “Blade,” which was set to begin filming in Atlanta next month, as well as the Disney+ Star Wars series “Andor.”

There is also the third wave of expected layoffs within the company, that industry experts expect to see announced soon.
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May 10, 2023
Berkshire Hathaway’s operating earnings increase 12% in the first quarter, cash hoard tops $130 billion

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Earnings for Warren Buffett’s Berkshire Hathaway jumped in the first quarter, thanks in part to a rebound in the conglomerate’s insurance business.

Operating earnings, which encompass profits from the conglomerate’s fully-owned businesses, totaled $8.065 billion in the first quarter. That’s up 12.6% from $7.16 billion a year prior.

Profit from insurance underwriting came in at $911 million, up sharply from $167 million a year prior. Insurance investment income also jumped 68% to $1.969 billion from $1.170 billion.

Geico saw a big turnaround in the quarter, returning to a big underwriting profit of $703 million. The auto insurer suffered a $1.9 billion pretax underwriting loss last year as it lost market share to competitor Progressive. Ajit Jain, Berkshire’s vice chairman of insurance operations, previously said the biggest culprit for Geico’s underperformance was telematics.

The company’s railroad business, BNSF, along with its energy company saw year-over-year earnings declines. Operations classified under “other controlled businesses” and “non-controlled businesses” had slight increases from the year-earlier period.

Warren Buffett at Berkshire Hathaway’s annual meeting in Los Angeles, California. May 1, 2021.

Gerard Miller | CNBC

Berkshire’s cash hoard swelled to $130.616 billion from $128 billion in the fourth quarter of 2022. Berkshire also repurchased $4.4 billion worth of stock — the most since the first quarter of 2021 — up from $2.8 billion at the end of last year.

Berkshire’s net earnings, which includes short-term investment gains, increased to $35.5 billion in the quarter from $5.6 billion in the same period a year ago, reflecting a first quarter comeback in Warren Buffett’s equity investments, such as Apple. Though Buffett cautions investors to not pay attention to quarterly fluctuations in unrealized gains on investments.

The company’s latest quarterly results come ahead of the conglomerate’s annual shareholders meeting, an event known as “Woodstock for Capitalists.”

Berkshire Class A shares are up 4.9% this year through Friday’s close, lagging the S&P 500’s 7.7% advance. However, the stock is less than 3% below an all-time high.

— CNBC’s Yun Li contributed reporting.

Follow CNBC’s livestream of Berkshire Hathaway’s 2023 annual meeting starting live at 9:45 a.m. ET Saturday here.

Follow live highlights and updates of the meeting here.

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May 6, 2023
Apple reports better-than-expected quarter driven by iPhone sales
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Apple reported second-fiscal quarter earnings on Thursday that beat Wall Street’s soft expectations, driven by stronger-than-anticipated iPhones sales. Apple CEO Tim Cook told CNBC that the quarter was “better than we expected.”

However, Apple’s overall sales fell for the second quarter in a row. The tech giant’s shares rose nearly 2% in extended trading, and continued climbing when Apple gave forecast data points about the current quarter.

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Here’s how the company did versus Wall Street expectations per Refinitiv consensus expectations:

EPS: $1.52 per share vs. $1.43 expected

Revenue: $94.84 billion vs. $92.96 billion expected

Gross margin: 44.3% vs. 44.1% expected

Apple reported $24.16 billion in net income during the quarter compared to $25.01 billion in the year-earlier period. Total revenue was off 3% from $97.28 billion in the prior quarter.

Here’s how Apple’s individual product lines did versus StreetAccount consensus expectations:

iPhone revenue: $51.33 billion vs. $48.84 billion expected

Mac revenue: $7.17 billion vs. $7.80 billion expected

iPad revenue: $6.67 billion vs. $6.69 billion expected

Other Products revenue: $8.76 billion vs. $8.43 billion expected

Services revenue: $20.91 billion vs. $20.97 billion expected

Apple didn’t provide formal guidance, continuing its practice that dates back to 2020 and the start of the Covid-19 pandemic. Management typically provides some data points on a call with analysts.

Apple finance chief Luca Maestri said the company expects overall revenue in the current quarter to decline about 3%.

“We expect our June quarter year-over-year revenue performance to be similar to the March quarter assuming that the macroeconomic outlook does not worsen from what we are projecting today for the current quarter,” Maestri said on a call with analysts. He added the company is facing macroeconomic challenges in digital advertising and mobile gaming, which is part of Apple’s services business.

The highlight of Apple’s report was iPhone sales, which grew from the year-ago quarter even as the broader smartphone industry contracted nearly 15% during the same time, according to an IDC estimate.

IPhone revenue increased 2% during the quarter that ended April 1, suggesting that parts shortages and supply chain issues that had hampered the product for the last few years — including an iPhone factory shutdown late last year — had finally abated.

“It was quite a good quarter from an iPhone point of view, particularly relative to the market when you look at the market stats,” Cook told CNBC’s Steve Kovach.

Chief Executive Officer (CEO) of Apple Tim Cook waves to people during the opening of the first Apple Inc. flagship store in Mumbai, India on April 18, 2023.

Imtiyaz Shaikh | Anadolu Agency | Getty Images

Apple’s Mac and iPad businesses didn’t fare as well. The company warned last quarter that both business segments would decline, partially due to parts shortages but they fell further than expected.

Apple’s Mac sales were off more than 31% to just over $7.17 billion. But that’s a difficult comparison from the year-earlier period when Apple was still benefiting from the end of a pandemic boom in PC sales and a shift to its own chips that offer longer laptop battery life.

“There’s really two reasons for that,” Cook said. “One is the macro situation in general. And the other is where we’re still comparing to the very difficult compare of the M1 MacBook Pro 14 and 16-inch from the year-ago quarter.”

Revenue from iPads declined nearly 13% to $6.67 billion.

Apple’s Services business includes monthly subscriptions, revenue from Apple’s App Store, warranties and search-licensing revenue from companies like Google. Apple reported $20.9 billion in services revenue, a 5.5% year-over-year increase, signaling the company’s highest-margin business line continues to grow.

Apple’s wearables division, including Apple Watch and headphones such as AirPods, dropped 1% during the quarter, beating analyst expectations. Last fall, the company released a more expensive Apple Watch, called Ultra.

Apple’s China regional business, which includes the mainland, Taiwan and Hong Kong, reported $17.81 billion in sales, down from last year’s $18.34 billion. Analysts had hoped that China’s demand for electronics would rise in the quarter as the company exits out of Covid-era lockdowns and other restrictions.

While sales shrunk in most regions that Apple monitors, they grew in the Asia Pacific region to $8.11 billion.

Cook was optimistic about Apple’s prospects in India after his visit last month to the country where he opened Apple stores and met with politicians.

“The switcher and first-time buyer metrics look very good there for India,” Cook said. Apple uses the term “switcher” to refer to first-time iPhone buyers who previously had Android devices.

As expected, Apple’s board authorized $90 billion in share repurchases and dividends. Apple said it paid $23 billion in buybacks and dividends in the March quarter. Apple also raised its dividend 4% to 24 cents per share.

Cook also said that Apple was not planning layoffs like those that other big tech companies have started over the past year. “I view that as a last resort and, so, mass layoffs is not something that we’re talking about at this moment,” he said.
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May 4, 2023
Chipotle Mexican Grill’s restaurant traffic grows as the chain proves its pricing power
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Chipotle Mexican Grill on Tuesday reported quarterly earnings and revenue that topped analysts’ expectations, fueled by better than expected same-store sales growth.

Like McDonald’s, Chipotle said traffic to its restaurants grew during the first quarter despite higher menu items. Chipotle’s menu prices are up roughly 10% from a year earlier. CEO Brian Niccol said the chain has demonstrated that it has pricing power.

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“We don’t want to be in front of the inflationary environment, but we also don’t want to fall behind,” he said on the company’s conference call.

Pedestrians wearing protective masks walk in front of a Chipotle restaurant in San Francisco, California, April 19, 2021.

David Paul Morris | Bloomberg | Getty Images

For now, Chipotle is pausing price increases, Niccol said on CNBC’s “Closing Bell.”

Shares of the company rose more than 7% in extended trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by Refinitiv:

Earnings per share: $10.50 vs. $8.92 expected

Revenue: $2.37 billion vs. $2.34 billion expected

Chipotle reported first-quarter net income of $291.6 million, or $10.50 per share, up from $158.3 million, or $5.59 per share, a year earlier. The company’s menu price hikes and lower avocado prices helped improve profit margins compared with the year-ago period.

Revenue climbed 17.2%, to $2.37 billion, from $2 billion during the year-earlier period. Same-store sales rose 10.9%, topping StreetAccount estimates of 8.6%.

Niccol said that higher-income consumers are returning to restaurants more frequently. Even lower-income diners are visiting more often than they were in the prior six months, although their traffic remains down from a year ago. Overall, traffic rose roughly 4% in the quarter, reversing last quarter’s decline.

In February, executives said January’s same-store sales grew by double digits. A year earlier, the company saw sluggish sales as the omicron Covid outbreak put pressure on staffing and caused some temporary store closures.

Chipotle’s chicken al pastor is on track to be the chain’s most popular limited-time protein option ever, Niccol said on the company’s conference call. The company launched it in mid-March.

Digital orders accounted for nearly 40% of sales during the quarter. Chipotle customers have been ordering their burritos and tacos more in person compared with the year-ago period.

Executives also outlined changes coming to restaurants to improve speed of service and accuracy. The chain has been testing new grills that cook faster and more consistently. It has also been experimenting with how to staff its two make lines to keep up with demand from both in-person diners and digital orders.

The company opened 41 new locations during the quarter, 34 of which included its drive-thru lanes reserved for digital order pickup.

Looking to the rest of the year, Chipotle is anticipating same-store sales growth in the mid-to-high single digits. It’s expecting the same range for its second-quarter same-store sales growth, roughly in line with StreetAccount estimates of 5.8%.

The company reiterated its plans to open between 255 to 285 new restaurants during 2023.
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April 25, 2023
Morgan Stanley tops analysts’ expectations on better-than-expected trading results
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Morgan Stanley CEO James Gorman participates in a conversation-style interview with Economic Club of Washington in Washington September 18, 2013.

Yuri Gripas | Reuters

Morgan Stanley on Wednesday topped estimates for first quarter profit and revenue on better-than-expected trading results.

Here’s how the company did:

Earnings of $1.70 per share, vs. $1.62 Refinitiv estimate

Revenue of $14.52 billion, vs. $13.92 billion estimate.

The New York-based bank said earnings fell 19% to $2.98 billion, or $1.70 a share, from a year earlier on declines in investment banking and trading. Companywide revenue slipped 2% to $14.52 billion.

As revenues dipped, expenses at the bank climbed 4% to $10.52 billion, mostly fueled by higher-than-expected compensation costs. Expenses came in $430 million higher than the StreetAccount estimate.

Higher costs helped hurt profit margins at the bank’s wealth division and investment bank, analyst Mike Mayo of Wells Fargo said in a research note. He also said that when excluding the benefit of a low tax rate, the bank would’ve earned $1.64 per share.

Shares of the bank dropped 3.8% in premarket trading.

Under CEO James Gorman, Morgan Stanley has become a wealth management giant thanks to a string of acquisitions. The bank gets most of its revenue from wealth and investment management, steadier businesses that help to offset volatile trading and banking results.

“The investments we have made in our wealth management business continue to bear fruit as we added a robust $110 billion in net new assets this quarter,” Gorman said in the earnings release. “Equity and fixed Income revenues were strong, although investment banking activity continued to be constrained.”

Wealth management revenue climbed 11% from the year-earlier period to $6.56 billion, matching the StreetAccount estimate. The increase was fueled by a rise in net interest income amid higher rates and loan growth, which offset lower asset management revenues as markets declined.

First-quarter trading revenue dipped from a year ago as Wall Street comes down from a pandemic-era boom, but Morgan Stanley’s traders managed to top expectations by roughly $250 million.

The bank’s fixed income traders produced $2.58 billion in revenue, exceeding the $2.33 billion StreetAccount estimate. Equities trading revenue of $2.73 billion edged out the $2.65 billion estimate.

Investment banking revenue dropped 24% to $1.25 billion on fewer completed M&A deals and lower stock and debt issuance, edging out the $1.2 billion estimate.

Finally, the bank’s smallest business, investment management, saw revenues drop 3% to $1.29 billion, just below the $1.34 billion estimate, as management fees decreased amid declining markets.

At the start of a conference call with analysts, Gorman addressed the turmoil sparked by the March collapse of two American regional banks.

“In my view, we are not in a banking crisis, but we have had and may still have a crisis among some banks,” Gorman said. “I consider the condition not remotely comparable to 2008.”

He added that there was “no doubt” that Morgan Stanley would acquire more companies in wealth management, though nothing was imminent.

Morgan Stanley shares have climbed 5.7% this year before Wednesday, outperforming the 16% decline of the KBW Bank Index.

JPMorgan Chase, Citigroup, Wells Fargo and Bank of America each topped expectations as the firms reaped more interest income amid rising rates. Goldman Sachs missed on costs tied to unloading consumer loans amid its pivot away from retail banking.

This story is developing. Please check back for updates.
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April 19, 2023
Johnson & Johnson beats on earnings and revenue, raises full-year guidance
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Artur Widak | NurPhoto | Getty Images

Johnson & Johnson reported adjusted earnings and revenue that topped Wall Street’s expectations on Tuesday, and lifted its full-year forecast.

J&J, whose financial results are considered a bellwether for many health companies, said its first-quarter sales grew 5.6% over the same quarter last year.

The consumer staples giant reported a net loss of $68 million, or 3 cents per share, due to a special one-time charge. That’s compared to a net income of $5.2 billion, or $1.93 per share, for the same period a year ago. Excluding certain items, adjusted earnings per share were $2.68 for the period.

Here’s how J&J results compared with Wall Street expectations based on a survey of analysts by Refinitiv:

Earnings per share: $2.68 adjusted, vs. $2.50 expected

Revenue: $24.75 billion, vs. $23.67 billion expected

J&J is now forecasting 2023 sales of $97.9 billion to $98.9 billion, about $1 billion higher than the guidance provided in January. The company raised its full-year adjusted earnings outlook to $10.60 to $10.70 per share, from a previous forecast of $10.45 to $10.65.

CFO Joseph Wolk told CNBC on Tuesday that J&J raised its guidance due to strong growth across all three business sectors — consumer health, pharmaceuticals and medtech.

“If you think about how we started the year and guidance in January, we were responsibly cautious,” he said on “Squawk Box.” “First-quarter growth was much stronger than even fourth-quarter growth for all three business units, and our positions kind of change to responsibly optimistic at this point. We feel very good about 2023.”

The company’s shares rose nearly 2% in premarket trading. The stock is down more than 6% for the year through Monday’s close, putting the company’s market value at roughly $430 billion.

But the New Brunswick, New Jersey-based company entered this earnings season with its shares on the rise after it offered more clarity on the long-running legal fight over its talc-based baby powder products. Earlier this month, J&J proposed to pay nearly $9 billion over the next 25 years to settle thousands of allegations that its baby powder and other talc products caused cancer.

J&J will hold an earnings call at 8:30 a.m. E.T.

Read the full J&J earnings report.
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April 18, 2023
Goldman Sachs is set to report first-quarter earnings — here’s what the Street expects
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David Solomon, chief executive officer of Goldman Sachs Group Inc., during a Bloomberg Television at the Goldman Sachs Financial Services Conference in New York, US, on Tuesday, Dec. 6, 2022.

Michael Nagle | Bloomberg | Getty Images

Goldman Sachs is scheduled to report first-quarter earnings before the opening bell Tuesday.

Here’s what Wall Street expects:

Earnings: $8.10 per share, 25% lower than a year earlier, according to Refinitiv.

Revenue: $12.79 billion, 1.1% lower than a year earlier.

Trading Revenue: Fixed Income $4.16 billion, Equities $2.9 billion, per StreetAccount.

Investing Banking Revenue: $1.44 billion

How did Goldman’s traders perform last quarter?

The answer to that question will determine whether Goldman exceeds or misses expectations for the first three months of this year.

Unlike its more diversified rivals, Goldman gets the majority of its revenue from Wall Street activities including trading and investment banking. With the advisory business remaining subdued because the IPO window remains mostly shut, it’s up to traders to pick up the slack.

Heading into the quarter, analysts wondered whether turmoil during March — in which two American banks failed and a global investment bank was forced to merge with a longtime rival — would provide a good or bad backdrop to trading.

That question was seemingly answered by JPMorgan Chase and Citigroup, both of which beat estimates in part because of better-than-expected fixed income trading. Goldman has one of the biggest bond shops on Wall Street, so expectations are high.

So far this earnings season, big banks have mostly outperformed their smaller peers, helped by an influx of deposits after Silicon Valley Bank’s meltdown. But since retail banking plays a small — and probably shrinking — role at Goldman, much more focus will be on how trading and investment banking fared, and what expectations are for later this year.

Separately, analysts will want to hear what has come of CEO David Solomon’s proclamation in February that Goldman was weighing “strategic alternatives” for its consumer platforms business. That has been interpreted as potentially selling off the GreenSky business it acquired recently or offloading credit-card partnerships with Apple and others.

And they’ll likely ask for details about Goldman’s part in helping Apple offer new savings accounts; the product launched with a higher interest rate than the bank’s own Marcus product has.

Goldman shares have dipped 1.1% this year before Tuesday, a better showing than the nearly 17% decline of the KBW Bank Index.

Last week, JPMorgan Chase, Citigroup and Wells Fargo all topped profit expectations amid rising rates. Morgan Stanley is scheduled to release results Wednesday.

This story is developing. Please check back for updates.
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April 17, 2023
Citigroup shares rise after first-quarter revenue tops expectations
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Citigroup reported rising net income and better-than-expected revenue for the first quarter, boosting its stock Friday even as the bank’s executives expressed caution about the path of the U.S. economy.

Here is how Citigroup’s key metrics compared with expectations.

$4.6 billion in net income vs. $4.3 billion in the same period last year

$21.45 billion in revenue vs. $19.99 billion expected, according to Refinitiv.

Citigroup reported earnings of $2.19 per share for the quarter. It was not clear how comparable that number is to estimates, but it appeared to be a solid beat, based on both GAAP and adjusted earnings per share.

Shares of the bank rose about 4.8%.

Citi’s stock rose after the bank reported better-than-expected results for the first quarter.

The results were fueled in part by personal banking revenue rising 18% year over year, reflecting higher interest rates. Fixed income markets revenue rose 4% year over year, though that was offset by declines in investment banking and equity market revenue.

One key area for investors is how Citi adjusts its buffer for loan losses given the uncertain outlook for the economy. Citigroup reported a total provision for loan losses of $1.98 billion, slightly above the $1.89 billion provision for credit losses expected by analysts, according to StreetAccount, and up 7% from the prior quarter.

The outlook for the economy has been muddled by the failure of Silicon Valley Bank and Signature Bank last month, which could potentially slow loan growth throughout the economy.

“We are in a strong position to navigate whatever environment we face, which is particularly relevant given the degree of uncertainty today. … We expect the recent events to be disinflationary and credit to contract. We believe it is now more likely that the U.S. will enter into a shallow recession later this year,” Citigroup CEO Jane Fraser said on an investor call.

The CEO added that Citi saw a “notable softening” in consumer spending over the course of the quarter.

The bank kept its full-year guidance the same despite the strong first quarter, and CFO Mark Mason cited the uncertainty around the economy and the path of interest rates as the reason.

Citigroup reported that its deposits at the end of March were down 3% quarter over quarter to $1.33 trillion, but Mason said on the investor call that the bank did see about $30 billion of deposit inflows over the last three weeks of March. After the collapse of the two regional banks, many analysts expected the larger U.S. banks to see deposit inflows.

Fraser said she feels “very comfortable” with the diversity of Citi’s deposit base.

As part of a broader restructuring plan away from international retail banking, Citigroup closed two divestitures during the first quarter, including its consumer business in India that generated a gain on the sale. Net income was down 19% year over year when excluding the impact of the sales.

Revenue rose 12% year over year, and 6% when excluding the impact of those sales.

Fraser, who has spearheaded the sales since taking over as CEO in 2021, said Friday that the bank will exit its remaining retail markets in Asia later this year.

Entering Friday, Citigroup’s stock was up more than 4% year to date, outperforming key peers including JPMorgan Chase and Bank of America. Shares of JPMorgan rose more than 7% on Friday following its quarterly report.
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April 14, 2023
JPMorgan Chase is set to report first-quarter earnings – here’s what the Street expects
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Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., during a Bloomberg Television interview at the JPMorgan Global High Yield and Leveraged Finance Conference in Miami, Florida, US, on Monday, March 6, 2023.

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JPMorgan Chase is scheduled to report first-quarter earnings before the opening bell Friday.

Here’s what Wall Street expects:

Earnings: $3.41 per share, 29.7% higher than a year earlier, according to Refinitiv.

Revenue: $36.24 billion, 14.7% higher than a year earlier.

Deposits: $2.31 trillion, according to StreetAccount.

Provision for credit losses: $2.27 billion.

Trading Revenue: Fixed income $5.29 billion, Equities $2.86 billion.

JPMorgan, the biggest U.S. bank by assets, will be watched closely for clues on how the industry fared after the collapse of two regional lenders last month.

Analysts expect a mixed bag of conflicting trends. For instance, JPMorgan likely benefited from an influx of deposits after Silicon Valley Bank and Signature Bank experienced fatal bank runs.

But the industry has been forced to pay up for deposits as customers shift holdings into higher-yielding instruments like money market funds. That will probably curb banks’ gains from rising interest rates amid the Federal Reserve’s efforts to tame inflation.

The flow of deposits through American financial institutions is the top concern of analysts and investors this quarter. That’s because smaller banks faced pressure last month as customers sought the perceived safety of megabanks including JPMorgan and Bank of America. But the bigger picture may be that deposits are leaving the regulated banking system overall as customers realize they can earn higher yields outside checking and saving accounts.

Another key question will be whether JPMorgan and others are tightening lending standards ahead of an expected U.S. recession, which could constrict economic growth this year by making it harder for consumers and businesses to borrow money.

Banks have begun setting aside more loan loss provisions on expectations for a slowing economy later this year, and that could weigh on results. JPMorgan is expected to post a $2.27 billion provision for credit losses, according to the StreetAccount estimate.

Wall Street may provide little help this quarter, with investment banking fees likely to remain subdued thanks to the still-shut IPO market. CFO Jeremy Barnum said in February that investment banking revenue was headed for a 20% decline from a year earlier, and that trading was trending “a little bit worse” as well.

Finally, analysts will want to hear what JPMorgan CEO Jamie Dimon has to say about the economy and his expectations for how the regional banking crisis will develop. JPMorgan has played a central role in propping up a client bank, First Republic, which teetered last month, in part by leading efforts to inject it with $30 billion in deposits.

Shares of JPMorgan are down about 4% this year, outperforming the 31% decline of the KBW Bank Index.

Wells Fargo and Citigroup are scheduled to release results later Friday, while Goldman Sachs and Bank of America report Tuesday and Morgan Stanley discloses results Wednesday.

This story is developing. Please check back for updates.
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April 13, 2023
Delta Air Lines posts quarterly loss but forecasts profit as peak travel season approaches
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Airbus A330 Neo widebody aircraft meant for Delta airlines being tested in Toulouse, France.

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Delta Air Lines posted a wider loss than it previously estimated for the first three months of the year but forecast revenue growth and profits for the second quarter that were ahead of analysts’ estimates, signaling strong travel demand despite weakness in other sectors.

The Atlanta-based carrier said it expects sales in the current quarter to increase by 15% to 17% over last year, with adjusted operating margins of as much as 16% and adjusted earnings per share of between $2 to $2.25. Analysts polled by Refinitiv had anticipated second-quarter revenue growth of 14.7% and earnings per share of $1.66. The airline projected “record advance bookings for the summer.”

Delta said it plans to grow capacity 17% in the second quarter from a year earlier.

But for the first quarter, adjusted revenue and adjusted earnings came in below analyst estimates. Unit costs, excluding fuel were up 4.7% on the year, partly driven by winter storms that grounded flights.

Here’s how Delta performed in the period, ended March 31, compared with Wall Street expectations based on Refinitiv consensus estimates:

Adjusted earnings per share: 25 cents vs. 30 cents expected.

Adjusted revenue: $11.84 billion vs. $11.99 billion expected.

U.S. carriers generally make the bulk of their revenue during the busy spring and summer travel season and Delta’s outlook points to more strength in travel demand, and strong pricing power.

The airline said sales from premium cabins like first class is outpacing revenue from standard coach.

Delta shares were up more than 3% in premarket trading.

In the first quarter, Delta posted a net loss of $363 million, or 57 cents per share, citing, in part, a new, four-year pilot contract that includes 34% raises. That’s still improvement from the year-ago period, when travel was on the rebound and the company reported a net loss of $940 million, or $1.48 per share.

Adjusting for one-time items, the company reported net income of $163 million, or 25 cents per share, up from a loss of $748 million, or $1.23 per share, during the first quarter of 2022.

Delta executives will hold a call with analysts to discuss results at 10 a.m.
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April 13, 2023
Nordstrom earnings top expectations, retailer says it’s winding down Canada operations
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Miami, Florida, Coral Gables Shops at Merrick Park, Nordstrom Department Store with shopper entering.

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Nordstrom on Thursday reported lower sales and profits for the holiday quarter, although earnings topped Wall Street’s expectations.

The company said it expects sales to decline in the new fiscal year, reflecting in part its decision to wind down its Canadian operations.

“We entered Canada in 2014 with a plan to build and sustain a long-term business there. Despite our best efforts, we do not see a realistic path to profitability for the Canadian business,” CEO Erik Nordstrom said in a release Thursday.

Here’s what the department store reported for the fiscal fourth-quarter compared with what analysts were anticipating, based on Refinitiv estimates:

Earnings per share: 74 cents vs. 66 cents expected

Revenue: $4.32 billion vs. $4.34 billion expected

Nordstrom has struggled with slower sales, more markdowns and scrutiny from a prominent activist investor. Its net income in the period ended Jan. 28 fell to $119 million, or 74 cents per share, from $200 million, or $1.23 per share, a year earlier.

For the new fiscal year, Nordstrom expects revenue to fall 4% to 6%. It also projected EPS of 20 cents to 80 cents for the year.

Michael Maher, interim chief financial officer, said Nordstrom factored a more challenging economic backdrop and higher costs into its year-ahead forecast.

“We expect that elevated inflation and rising interest rates will continue to weigh on consumer spending, especially in the first half of the year,” he said on a call with investors. “We also anticipate continuing inflationary pressure on our expenses especially labor and transportation costs.”

He said the outlook included an approximately 2.5-percentage-point negative impact from the wind-down of its operations in Canada, a business that drove about $400 million in sales in the fiscal 2022 year.

As of Jan. 28, the company said it had six Nordstrom stores and seven Nordstrom Rack stores in Canada. Nordstrom said it ceased its Canadian e-commerce platform Thursday. It expects to finish Canadian store closures in Canada by late June.

Even before Nordstrom reported earnings, it cut its forecast and told investors that it had a rough holiday. In January, the department store chain said its net sales dropped 3.5% for the nine-week period that ended Dec. 31 compared with the year-ago period. Its net sales declined sharply during that stretch at its off-price banner, Nordstrom Rack.

One of the reasons for disappointing sales? More markdowns. Nordstrom said it discounted merchandise more than expected in November and December, so it could start the fiscal year with a healthier level of inventory.

The company drew attention and saw its stock soar in February, as activist investor Ryan Cohen bought a large stake in the company. Cohen, the chairman of GameStop and founder of Chewy, is interested in using that position to push for change — including getting former Bed Bath & Beyond CEO Mark Tritton off of Nordstrom’s board.

Cohen bought, and later sold, a major stake in Bed Bath, after criticizing Tritton’s strategy and pushing for change at that company, too.

As of Thursday’s close, Nordstrom shares are up more than 19% this year.

Read the full Nordstrom earnings release.
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March 2, 2023
Salesforce shares jump 13% on better-than-expected forecast
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Marc Benioff, co-founder and CEO of Salesforce, speaks at the World Economic Forum in Davos, Switzerland, on Jan. 18, 2023.

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Salesforce shares soared 16% in extended trading on Wednesday after the cloud software maker beat Wall Street estimates on profit and issued a better-than-expected forecast.

Here’s how the company did:

Earnings: $1.68 per share, adjusted, vs. $1.36 per share as expected by analysts, according to Refinitiv.

Revenue: $8.38 billion, vs. $7.99 billion as expected by analysts, according to Refinitiv.

Salesforce’s revenue grew 14% year over year in the fiscal fourth quarter, which ended on Jan. 31, consistent with the previous quarter, according to a statement.

The company reported a loss of $98 million, compared with a loss of $28 million in the year-ago quarter.

In January Marc Benioff, Salesforce’s co-founder and CEO, said the company would cut 10% of its workforce, representing over 7,000 people, and that restructuring strategy led to $828 million in costs during the quarter.

Profitability has become a higher priority at Salesforce, which in recent months has been getting pressured by an influx of activist investors, including Third Point, Elliott Management and Starboard Value. The company announced the addition of ValueAct Capital CEO Mason Morfit to its board. At the end of the quarter Bret Taylor, who ran Salesforce as co-CEO alongside Benioff, stepped down.

The past 90 days have been “very intense,” Amy Weaver, Salesforce’s finance chief, said on a conference call with analysts.

The adjusted operating margin, at 29.2%, was the highest in the company’s history and wider than the 25% goal for the fiscal 2026 fiscal year that executives had laid out at its investor day in September.

“Six months ago in September at our Dreamforce Investor Day we shared with you our comprehensive transformation plan, the new day for profitable growth,” Benioff said on the conference call. “But things have changed as we entered our fourth quarter. We recognized that we needed to radically accelerate the transformation plan time frame. We needed to press the hyper-space button and bring the two-year goals forward quickly and exceed them now.”

Benioff said Salesforce has disbanded its board committee on mergers and acquisitions and is working with Bain on a review of the business.

For the fiscal first quarter, the company called for adjusted earnings in the range of $1.60 to $1.61 per share and revenue of $8.16 billion to $8.18 billion. Analysts surveyed by Refinitiv had been looking for $1.32 in adjusted earnings per share and $8.05 billion in revenue.

Salesforce sees adjusted earnings per share for the full 2024 fiscal year of $7.12 to $7.14 and revenue of $34.5 billion to $34.7 billion. Analysts polled by Refinitiv had expected $5.84 in adjusted earnings per share and $34.03 billion in revenue. It called for a 27% adjusted operating margin in the 2024 fiscal year, and 30% in the first quarter of the 2025 fiscal year.

The guidance assumes that there will be no improvement in the longer sales cycles, additional requirements around spending and compression of deals that it has observed in the past three quarters, Weaver said.

The company said it was expanding its share buyback program to $20 billion after announcing its first repurchasing commitment, with up to $10 billion allocated for that purpose, in August.

Salesforce shares have risen 26% so far this year, excluding Wednesday’s after-hours move, outperforming the S&P 500 index, which has gained 3% over the same period.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.

This is breaking news. Please check back for updates.

WATCH: Proxy battle likely in store for Salesforce
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March 1, 2023
Zoom shares jump on better-than-expected fourth-quarter results
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Zoom CEO Eric Yuan speaks before the Nasdaq opening bell ceremony in New York on April 18, 2019.

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Zoom shares climbed 8% in extended trading on Monday after the video chat company reported fiscal fourth-quarter results that exceeded analysts’ estimates and offered optimistic earnings guidance for the year.

Here’s how the company did:

Earnings: $1.22 per share, adjusted, vs. 81 cents as expected by analysts, according to Refinitiv.

Revenue: $1.12 billion, vs. $1.10 billion as expected by analysts, according to Refinitiv.

Zoom’s revenue increased 4% year over year in the quarter, which ended on Jan. 31, according to a statement. That’s a dramatic slowdown from the quadrupling of revenue that Zoom enjoyed in 2020 and 2021, when consumers and businesses flocked to the video service during the Covid pandemic.

The company had its first net loss since 2018 in the quarter, losing $104 million compared with net income of about $491 million in the year-ago period. The loss stems from stock-based compensation costs.

Zoom continued to face issues it had encountered earlier in the 2023 fiscal year during the quarter, including executives looking carefully before agreeing to pay the company for services, CEO Eric Yuan told analysts on a conference call.

Some organizations have decreased the number of seats for which they buy Zoom’s software as part of broader expense pullbacks, Kelly Steckelberg, the company’s finance chief, said on the conference call.

Growth will continue to slow this year. Zoom sees between $4.435 billion to $4.455 billion in revenue, implying 1.1% growth, while analysts were expecting sales of $4.6 billion. The company said adjusted earnings per share will be between $4.11 and $4.18, topping the $3.66 average estimate.

For the fiscal first quarter, adjusted earnings will be 96 cents to 98 cents per share on revenue of $1.080 billion to $1.085 billion. Analysts surveyed by Refinitiv had expected 84 cents in adjusted earnings per share and $1.11 billion in revenue.

Excluding the after-hours move, Zoom’s stock is up 8% for the year, while the S&P 500 has gained 3% over the same period.

During the fiscal fourth quarter, Zoom said it would introduce email and calendar services, along with a virtual agent chatbot for handling customer service inquiries.

Earlier this month Zoom announced that it will cut 1,300 employees, representing 15% of its workforce. “As part of our restructuring, we are optimizing our go-to-market strategy to better support our enterprise customers and drive additional productivity,” Steckelberg said.

WATCH: Cramer’s lightning round: Zoom Video needs a merger
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February 27, 2023
Berkshire Hathaway fourth-quarter operating earnings fall 8%, cash hoard swells to nearly $130 billion

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Warren Buffett.

Gerald Miller | CNBC

Berkshire Hathaway‘s operating profits fell during the fourth quarter as inflationary pressures weighed on the conglomerate’s businesses.

Berkshire Hathaway’s operating earnings totaled $6.7 billion in the fourth quarter of 2022, a release read Saturday. That’s down 7.9% from the year-earlier period when profits totaled $7.285 billion. Operating earnings refers to the total profits made from the businesses owned by the conglomerate.

Earnings from Berkshire’s railroad, utilities and energy businesses came in at $2.2 billion in the fourth quarter of 2022, which is slightly down from the year-ago period. Meanwhile, the firm’s insurance-underwriting business fell to $244 million in the fourth quarter of 2022, down from $372 million the year-earlier period.

For the year, the conglomerate’s operating earnings totaled $30.793 billion. That’s up 12.2% from $27.455 billion in 2021.

Meanwhile, Berkshire used $2.855 billion to buy back shares in the fourth quarter. That’s lower than the year-earlier period when share repurchases totaled more than $6 billion but more than the third quarter’s repurchase total of around $1 billion. For the year, Berkshire bought back nearly $8 billion in common stock.

Despite this, Berkshire’s cash hoard grew to $128.651 billion in the fourth quarter of 2022. That’s up from nearly $109 billion in the third quarter.

Buffett said in his annual shareholder letter that Berkshire will continue to hold a “boatload” of cash and U.S. Treasury bills along with its myriad of businesses. He specified that future CEOs in the company will have a “significant part” of their net worth in Berkshire shares.

BRK in 2023

“We will also avoid behavior that could result in any uncomfortable cash needs at inconvenient times, including financial panics and unprecedented insurance losses,” Buffett wrote. “And yes, our shareholders will continue to save and prosper by retaining earnings. At Berkshire, there will be no finish line.”

Overall earnings dropped to $18.164 billion in the fourth quarter of 2022, a 54% decline from the same quarter in the year prior. These earnings reflect Berkshire’s fluctuating equity investments.

For the full year, overall earnings tumbled 125% to a loss of $22.819 billion in 2022, down from earnings of $89.795 billion in 2021. That number is largely a byproduct of tumultuous 2022 market, with the company reporting a $53.6 billion loss from investments and derivatives.

Regardless, Buffett often gives little weight to changes in the firm’s quarterly or annual results.

“The amount of investment gains/losses in any given quarter is usually meaningless and delivers figures for net earnings (losses) per share that can be extremely misleading to investors who have little or no knowledge of accounting rules,” read a statement from the release.

Berkshire shares are down nearly 1.6% in 2023.

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February 25, 2023
Walmart outlook disappoints Wall Street after strong holiday quarter
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Customers exit a Walmart store on January 24, 2023 in Miami, Florida. Walmart announced that it is raising its minimum wage for store employees in early March, store employees will make between $14 and $19 an hour.

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Walmart on Tuesday topped holiday-quarter earnings expectations, as the discounter said it drew budget-conscious shoppers searching for food, gifts and household items at a lower price.

But shares sunk in premarket trading, after the big-box retailer gave a weaker-than-expected outlook for the year ahead.

The company said it expects same-store sales for Walmart U.S. to rise between 2% and 2.5% excluding fuel, in the fiscal year ahead. That’s below analysts’ expectations for 3% growth, according to StreetAccount. It anticipates adjusted earnings per share to range from $5.90 to $6.05, excluding fuel.

Walmart’s CFO John David Rainey told CNBC shoppers are still buying fewer discretionary items, as grocery prices remain elevated. He said that factored into Walmart’s predictions for the year ahead.

“The consumer is still very pressured,” he said. “And if you look at economic indicators, balance sheets are running thinner and savings rates are declining relative to previous periods. And so that’s why we take a pretty cautious outlook on the rest of the year.”

Home Depot, which also reported fiscal fourth-quarter earnings on Tuesday morning, also shared a softer outlook. It said it expects same-store sales to be approximately flat in the coming fiscal year.

Here’s what Walmart reported for the fiscal fourth quarter that ended Jan. 31, according to Refinitiv consensus estimates:

Earnings per share: $1.71, adjusted, vs. $1.51 expected

Revenue: $164.05 billion vs. $159.72 billion expected

Walmart reported a net income of $6.28 billion, or $2.32, up from $3.56 billion, or $1.28, a year earlier.

Revenue of $164 billion marked a 7.3% year-over-year increase.

Same-store sales for Walmart U.S. rose 8.3%, excluding fuel. The key industry metric that includes sales from stores and clubs open for at least a year. E-commerce sales jumped by 17% year over year for Walmart U.S.

The company is not only the nation’s largest retailer. It’s also a grocery powerhouse, a factor that has steadied sales and driven foot traffic as Americans watch the budget because of high inflation.

Walmart’s reputation for value has helped the retailer – as has its large grocery business. It is the largest grocer in the country by revenue.

At Sam’s Club, same-store sales rose 12.2%, excluding fuel.

Shares of Walmart closed on Friday at $146.44, bringing the company’s market cap to nearly $395 billion. The company’s shares are up about 3% so far this year, underperforming the S&P 500’s approximately 6% gain during the same period.

This is breaking news. Check back for updates.
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February 21, 2023
HSBC reports fourth-quarter pre-tax profit of $5.2 billion, beating estimates

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Hong Kong observation wheel, and the Hong Kong and Shanghai Bank, HSBC building, Victoria harbor, Hong Kong, China.

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HSBC on Tuesday reported fourth-quarter earnings for 2022 that beat analyst expectations.

The bank’s reported profit before tax for the three months ended in December was $5.2 billion, 108% higher than $2.5 billion a year ago. Analyst estimates compiled by the bank had expected a jump of 87% to $4.97 billion.

The bank said its fourth-quarter results reflect strong reported revenue growth and lower reported operating expenses.

For the full year, reported revenue was $51.73 billion, up from $49.55 billion in 2021.

HSBC, Europe’s largest bank by assets, said higher global interest rates support the firm’s confidence in achieving its target of at least 12% return on average tangible equity in 2023.

“We completed the first phase of our transformation and our international connectivity is now underpinned by good, broad-based profit generation around the world,” Noel Quinn, group chief executive said in the release.

“We are on track to deliver higher returns in 2023 and have built a platform for further value creation,” he said.

Banks globally have seen strong net interest income as central banks around the world raised rates to tame inflation. HSBC said it expects net interest income of at least $36 billion in 2023.

Hong Kong-listed shares of HSBC were about 1% lower before the release.

This is a breaking news story, please check later for updates.

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February 20, 2023