Microsoft Earnings Grew Last Quarter with Demand for Cloud Services

Microsoft Corp. said its earnings continued to grow last quarter as its cloud-services business stayed strong. On Tuesday, the Redmond, Wash., software giant said its sales in the quarter ended in December hit $51.7 billion, up 20% from a year earlier. Its net income rose 21% to $18.8 billion. The results beat predictions from analysts, who were expecting $50.7 billion in revenue and $17.5 billion in net income, according to FactSet. Microsoft’s overall cloud revenue increased 32% from the year-earlier quarter to $22.1 billion. Its cloud-infrastructure service, called Azure, grew by 46%, down slightly from the prior quarter’s 48% growth.

Credit Suisse Issues 4Q Profit Warning

Credit Suisse Group AG on Tuesday issued a profit warning for its fourth quarter and said its CET1 ratio should beat its ambitions. The Swiss bank said that fourth-quarter pretax income should be around break-even with litigation provisions of roughly 500 million Swiss francs ($547 million) that will weigh on it, though gains from real-estate sales of CHF225 million will offset it, in part. The expected break-even is “before deduction of the already announced approximately CHF1.6 billion goodwill impairment for the group, of which approximately CHF1.5 billion in the Investment Bank division and approximately CHF0.1 billion in the Asia Pacific division,” it said.

Siemens Gamesa Issues Warning After Swinging to 1Q Loss Amid Supply Bottlenecks

Siemens Gamesa Renewable Energy SA lowered its guidance for the fiscal year late Thursday after it swung to an operating loss in the first quarter on continued supply-chain constraints. In the three months to Dec. 30, the Spanish energy company posted an adjusted loss before interest and taxes of 309 million euros ($350 million) from a profit of EUR121 million a year earlier, on revenue that fell to EUR1.8 billion from EUR2.3 billion, according to preliminary figures.

Netflix Shares Sink as Company Sees Subscriber Growth Slowing

Netflix Inc. said it expects to add a much smaller number of subscribers this quarter than it did a year ago as it adjusts to growing competition and lasting disruptions from the coronavirus pandemic, sending the video streamer’s shares down sharply.

Bank of America's Quarterly Profit Rises 28%

Bank of America Corp. profit rose 28% in the fourth quarter, boosted by record investment-banking revenue and recovering appetite for borrowing from businesses and consumers. The second-largest U.S. bank earned $7.01 billion, up from $5.47 billion a year earlier. Per-share earnings of 82 cents topped the 77 cents that analysts polled by FactSet had expected. Higher interest income and record investment banking revenue pushed Bank of America to higher earnings. The bank also reported an earnings slowdown a year ago, making this year's comparisons easier. Outstanding loans and leases totaled $979.12 billion in the fourth quarter, up 6% from both the third quarter and a year earlier. Other large banks saw their profits decline in the fourth quarter. Some of the business lines that powered banks over the past two years, like frenetic trading and a lucrative mortgage market, began to return to normal levels.

Microsoft to Buy Activision Blizzard in All-Cash Deal Valued at $75 Billion

Microsoft Corp. agreed to buy Activision Blizzard Inc. in an all-cash deal valued at about $75 billion, using its largest acquisition by far to grab a videogame heavyweight that has been roiled by claims of workplace misconduct. The deal, if completed, would sharply expand Microsoft’s already sizable videogame operation, adding a stable of popular game franchises including Call of Duty, World of Warcraft and Candy Crush to Microsoft’s Xbox console business and its own games like Minecraft and Doom. Microsoft said the transaction would make it the world’s third-largest gaming company by revenue, behind China’s Tencent Holdings Ltd. and Japan’s Sony Group Corp. The deal is valued at $68.7 billion after adjusting for Activision’s net cash, Microsoft said.

Unilever Sets Out Ambition to Expand in Health Products

Unilever shares tumbled 6.9% after the consumer-goods giant said over the weekend that it had approached GlaxoSmithKline and Pfizer about buying their consumer-health joint venture. Its latest proposal valued the unit at $68.4 billion. U.K.-listed GlaxoSmithKline shares rose 4.1%. Unilever PLC announced its intention to push further into health, beauty, and hygiene products at the expense of slower-growing food brands. The maker of Dove soap and Ben & Jerry’s ice cream said Monday that buying GSK Consumer Healthcare, which sells everything from Aquafresh toothpaste to Advil painkillers, would be accompanied by significant divestitures as it looks to rejigger its portfolio toward higher-growth categories. Unilever on Saturday stated it had made a takeover approach for the business, which is 68% owned by Glaxo and 32% by Pfizer Inc. A successful deal would be Unilever’s largest-ever acquisition and greatly expand its presence in oral care and vitamins, as well as give it a new foothold in over-the-counter medicines.

Pandemic Profits Begin to Ebb at America’s Biggest Banks

The tumultuous pandemic economy sent big-bank profits to great heights. They’re coming back down to earth. Fourth-quarter profit fell 14% at JPMorgan Chase & Co. and 26% at Citigroup Inc., ending what had been a streak of big gains for most of 2021. Revenue didn’t budge much, but expenses rose. JPMorgan shares fell 6.2% in midday trading, and Citigroup fell 2.5%. Banks have enjoyed unparalleled growth during the pandemic, buoyed by a deal-making boom, market volatility that supercharged trading arms and a housing market that made mortgage lending more profitable than ever. Trading revenue fell 11% at JPMorgan and 17% at Citigroup, dragged down by declines in fixed-income trading. JPMorgan logged a profit of $10.4 billion, or $3.33 per share. Citigroup posted $3.2 billion, or $1.46 per share. Both beat the expectations of analysts polled by FactSet.

2022: Year of the Dividend

2022: Year of the Dividend

In the context of a modestly higher equilibrium level of inflation going forward, dividend income is going to the superhero saviour of long-term, income-seeking portfolios.

Tesco 3Q, Christmas Sales Rose, Driving Upgrade to FY 2022 Guidance

Tesco PLC said that it has had stronger-than-expected sales to date after a strong third quarter of fiscal 2022 and robust sales during Christmas, and that it now expects to post a retail operating profit for the full fiscal year slightly above its previous top-end guidance. The U.K.’s biggest grocer by market share said like-for-like retail sales rose 2.6% on year in the 19 weeks ended Saturday, rising 2.4% in the third quarter and 3.2% in the Christmas period. The company’s retail operating profit guidance is in the range of 2.5 billion to 2.6 billion pounds ($3.56 billion-$3.43 billion). In the U.K., Tesco’s like-for-like sales rose 0.2% in the 19-week period, and increased 4.9% in Central Europe.