(Alliance News) - The following is a summary of top news stories Wednesday.
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COMPANIES
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Microsoft hailed strength in cloud offerings as it reported robust second quarter growth. Shares in the US software firm ended down 2.7% at USD288.49 in New York on Tuesday, and slipped a further 4.9% after-hours. However, they were up 3.7% in pre-market trade on Wednesday. Revenue for the three months to December 31 jumped 20% to USD51.73 billion from USD43.08 billion year-on-year, with the firm noting revenue in Intelligent Cloud of USD18.3 billion was up 26%. "Solid commercial execution, represented by strong bookings growth driven by long-term Azure commitments, increased Microsoft Cloud revenue to USD22.1 billion, up 32% year over year" said Amy Hood, executive vice president & chief financial officer. Productivity & Business Processes revenue of USD15.9 billion was up 19% and More Personal Computing revenue rose 15% to USD17.5 billion. Net income for the quarter grew 21% to USD18.77 billion from USD15.46 billion, and diluted earnings per share rose 22% to USD2.48 from USD2.03, easily topping consensus of USD2.31.
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Texas Instruments posted double-digit revenue growth in the fourth quarter of 2021, rounding off a year of strong earnings growth for the Dallas-based chipmaker. Revenue in the three months to the end of December rose 19% to USD4.83 billion from USD4.08 billion a year earlier. Pretax profit was 28% higher at USD2.46 billion from USD1.93 billion a year earlier. Revenue growth was led by "strong demand in industrial and automotive markets", Chair & Chief Executive Rich Templeton explained. "Analog revenue grew 20% and Embedded Processing grew 6% from the year-ago quarter," Templeton added. For the whole of 2021, revenue increased 27% to USD18.34 billion from USD14.46 billion. Pretax profit surged to USD1.15 billion from USD422 million.
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Nidec, a Kyoto, Japan-based manufacturer and distributor of electric motors, said net sales in nine months to December 31 grew by 19% to JPY1.407 trillion, about USD12.34 billion, from JPY1.185 trillion. Pretax profit also rose by 19%, to JPY130.55 billion from JPY109.31 billion, while attributable profit increasef 20% to JPY100.44 billion from JPY83.62 billion. "We renewed the highest record for nine-month period due to higher sales of compressors for home appliances, motors for air conditioners, and motors and gears for transportation robots in the US and Europe," Nidec says. Guides for financial 2022, ending March 31, net sales of JPY1.800 trillion - which would represent 11% growth. Attributable profit forecast to rise 21% to JPY148.00 billion.
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UK accounting software firm Sage said it has made a strong start to its new financial year, with organic revenue growth of 5% in the three months to the end of December. Revenue totalled GBP458 million in the financial first quarter, up from GBP435 million a year before. Sage highlighted that recurring revenue grew by 8%, bolstered by a 21% rise in revenue from Sage Business Cloud to GBP280 million. The FTSE 100 company reaffirmed its annual guidance.
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Mexican precious metals miner Fresnillo said it put in a "creditable" performance in 2021, with silver production marginally short of guidance, but gold production exceeding expectations. For 2021, Fresnillo delivered attributable silver production of 53.1 million ounces, which was below guidance of 53.5 million to 59.5 million ounces. The company said output was below guidance due to lower grades and less ore at the Saucito and Fresnillo mines. Fresnillo reported 2021 gold production of 751,200 ounces, down 2.4% on 2020 but ahead of guidance of 675,000 to 725,000 ounces of gold. It attributed the lower gold production to lower ore grades at Cienega and at San Julian Veins. Looking ahead, Fresnillo forecasts 50.5 million to 56.5 million ounces attributable silver - including Silverstream - in 2022. Fresnillo also guided for 600,000 to 650,000 ounces attributable gold production in 2022. Both are down on 2021, due to issues related to the virus pandemic and new labour laws in Mexico.
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Glencore said it has partnered with industrial mining company Managem to produce cobalt, nickel and lithium from Managem's refinery in Morocco. The Switzerland-based commodity trader and mining company explained that the cobalt, nickel and lithium will be produced from recycled battery materials. The tolling agreement is for around 1.2 kilotonnes of recycled cobalt per year as well as unspecified amounts of nickel hydroxide and lithium carbonate.
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Investment manager M&G said it is partnering with digital investment firm Moneyfarm to provide direct investment services to UK consumers. M&G Wealth, its UK wealth management arm, will use Moneyfarm technology to create a new direct digital service tailored to meet a range of customer risk appetites and profiles through a collection of multi-asset model portfolios, backed by a selection of actively-managed and passive funds.
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MARKETS
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Equities were in ascent on Wednesday ahead of key central bank decisions. The US Federal Reserve announces policy at 1900 GMT, followed by a press conference with Chair Jerome Powell at 1930 GMT. "The statement and subsequent press meeting will be closely scrutinised (perhaps even over-scrutinised) for all information on the [Federal Open Market Committee's] plan for asset purchase tapering (largely expected to end in March), its view on interest rate hikes (what factors are under consideration to spur lift-off in March), where there is still uncertainty for committee members and where there is certainty and, finally, the plan for reducing the size of the Federal Reserve’s balance sheet," summarised analysts at RMB Markets Research.
Ahead of the Fed announcement, the Bank of Canada reveals its own policy decision at 1500 GMT.
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CAC 40: up 2.1% at 6,978.67
DAX 40: up 2.1% at 15,443.79
FTSE 100: up 1.7% at 7,498.29
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Hang Seng: closed up 0.2% at 24,289.90
Nikkei 225: closed down 0.4% at 27,011.33
Financial markets in Sydney closed for Australia Day.
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DJIA: called up 0.8%
S&P 500: called up 1.1%
Nasdaq Composite: called up 1.7%
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EUR: firm at USD1.1285 (USD1.1279)
GBP: up at USD1.3502 (USD1.3491)
USD: up at JPY114.12 (JPY113.92)
Gold: flat at USD1,846.81 per ounce (USD1,846.58)
Oil (Brent): up at USD88.95 a barrel (USD87.57)
(currency and commodities changes since previous London equities close)
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ECONOMICS AND GENERAL
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UK Prime Minister Boris Johnson is set to face further questions over a police investigation into 'partygate', as No 10 braces for the submission of a report into possible lockdown breaches. A Downing Street source said that Sue Gray had not, as of Tuesday evening, handed in her findings about alleged coronavirus rule-breaking parties held at the top of the UK government. The senior civil servant's inquiry had been expected to be finalised this week, with reports suggesting it could be published to coincide with Wednesday's Prime Minister's Questions, or possibly on Thursday. It comes as police launched their own probe into multiple events in No 10 after being passed information from the Gray inquiry. The prime minister's official spokesman signalled that Johnson would be willing to speak to those at Scotland Yard investigating the alleged breaches of coronavirus rules over the past two years.
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The US and its allies are preparing for a possible reduction in Russian gas supplies to Europe in case of an escalation in the Ukraine conflict. "We are working with countries and companies around the world to ensure the security of supply and to mitigate price shocks affecting both the American people and the global economy," a senior US government official said in Washington on Tuesday. "We are just in discussions with major natural gas producers around the globe, to understand their capacity and willingness to temporarily surge natural gas output, and to allocate these volumes to European buyers." The government official pointed out that gas has been stored in storage facilities in Europe for several weeks. Efforts were aimed at providing a replacement within days or weeks, not months, in the event of a reduction or loss of Russian supplies.
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US President Joe Biden's administration on Tuesday formally withdrew the Covid vaccination-or-testing mandate for large businesses that was struck down by the Supreme Court. The Occupational Safety & Health Administration said that although it was withdrawing the mandate it "strongly encourages vaccination of workers against the continuing dangers posed by Covid-19 in the workplace." The conservative-dominated Supreme Court delivered a blow to Biden this month when it blocked his vaccination-or-testing mandate for businesses with 100 employees or more. The nation's highest court did allow a vaccination mandate for health care workers at facilities receiving federal funding to go into force. After months of public appeals to Americans to get vaccinated against Covid, which has killed more than 869,000 people in the US, Biden announced in September that he was making vaccinations compulsory at large private companies.
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There was no winner in the second round of voting of the presidential election in Italy on Tuesday, with the lawmakers of the major governing parties again submitting blank ballots. Just like in the first day of voting on Monday, no one achieved the two-thirds of the votes from 1,009 electors that is required to elect a successor for Sergio Mattarella. The centre-left and centre-right parties have not agreed on a joint candidate. Similar results are expected in the third round on Wednesday. Only after the fourth round of voting, scheduled for Thursday, will an absolute majority be enough to win. After the withdrawal of former prime minister Silvio Berlusconi from the race for the highest office in the state, negotiations between party leaders for a possible candidate intensified.
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France posted 501,635 new cases of Coronavirus for the past 24 hours on Tuesday, a new daily record and the first time the headline number has surpassed half a million. The country is currently recording the highest daily infection rates of any major European nation, with an average of more than 360,000 over the past week. More than 30,000 people are in hospital with coronavirus across France, in the highest such tally since November 2020, official figures showed. But only a little more than 3,700 were in intensive care, less than during previous periods of high infection. The highly contagious Omicron variant that is fuelling the latest wave is believed to be less dangerous than the previous dominant strain Delta. Some 364 people died of the virus in the past 24 hours, bringing the total number of deaths from Covid in France to 129,489.
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France has put the UK on alert that it could start legal proceedings if there is no further movement on post-Brexit fishing licences. European Affairs Minister Clement Beaune said Paris was "not happy with the situation" following a wrangle over licences for French vessels to fish in British waters. Last month, the French government said 93% of the requested licences had been issued by Britain compared to 60% at the beginning of November. But Beaune, speaking to reporters in Brussels on Tuesday, said the lack of progress since more permissions were granted in December meant that legal action remains an option, with France having issued a similar threat last year. However, with talks continuing with the UK, the minister stressed he did not think "we are at the end of the road yet".
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By Tom Waite; thomaslwaite@alliancenews.com
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