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By Swissquote Analysts
Published on 11.02.2022
Morning news

Twitter Profit Drops; Company Says Apple Impact Largely Avoided

Topic of the day

Twitter Inc. posted lower-than-expected profit as expenses climbed but said it largely dodged the impact of privacy changes that are hurting Facebook parent Meta Platforms Inc. Twitter also announced a $4 billion stock buyback, its first since the company announced a $2 billion program in March 2020. The social-media company said its daily user base rose 2.84% from its previous quarter to 217 million. Analysts polled by FactSet had expected the user count to rise to 218 million. Twitter posted net income of $182 million, down from $222 million a year earlier. Analysts were expecting $290 million, according to FactSet. Twitter’s revenue rose to $1.57 billion in the fourth quarter, up 22% from $1.29 billion a year earlier. That was largely in line with the analysts’ estimate of $1.58 billion, according to FactSet. Expenses in the quarter climbed to $1.4 billion, an increase of 35% over the previous year. Total costs and expenses grew as a result of an increase in head count, higher sales-related expenses, infrastructure costs and increased marketing expenses, the company said. Twitter stock advanced more than 1% early Thursday following the results.

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Swiss stocks

After the strong gains of the previous day, the stock market in Switzerland went down on Thursday. Uncertainty over rising inflation made for a volatile stock market. In addition, the reporting season was in focus, especially in the financial sector, where Credit Suisse and Zurich Insurance opened their books. The SMI lost 0.4 per cent to 12,313 points. Among the 20 SMI stocks, there were 11 price losers and nine price gainers. Turnover was 59.25 million shares (previously: 39.91 million). "The quarterly figures are even weaker than expected," a market participant told Credit Suisse. A loss had been expected, "but not to this extent", he said. Before taxes, it was 1.58 billion francs. Adjusted for special effects, the Swiss posted a pre-tax profit, but this was also well down by 62 per cent on the previous year's figures. The share price fell by 6.6 per cent. In contrast, Zurich Insurance's business figures were better than expected. Operating profit for the full year 2021 increased by 35 percent to 5.7 billion dollars. Expectations had only been around 5.5 billion dollars, according to traders.

International markets


The European equity indices ended mixed on Thursday, weakened by Wall Street's retreat after news that US inflation accelerated in January, causing further pressure on bond yields. The Stoxx Europe 600 index closed down 0.2% at 472.4 points. In Paris, the CAC 40 gave up 0.4 percent to 7,101.6 points, while the SBF 120 shed 0.3 percent to 5,491.8 points. The DAX 40 in Frankfurt gained 0.1%. In London, the FTSE 100 advanced 0.4% to 7,672.40 points. Unilever PLC reported higher quarterly sales growth but warned its profit margin would fall sharply this year as the owner of Dove soap and Ben & Jerry’s ice cream grapples with the impact of surging costs around the world. The bearish outlook comes as the consumer-goods giant is already under pressure from investors to accelerate growth. That pressure has intensified in recent weeks following a much criticized, and now aborted, $68 billion bid for GlaxoSmithKline PLC’s consumer-healthcare business, and news that activist investor Trian Fund Management LP had taken a stake in the company. Societe Generale SA on Thursday said that net profit rose in the fourth quarter of last year and set a shareholder distribution policy equivalent to 2.75 euros ($3.14) per share. The French bank said quarterly net profit was EUR1.79 billion compared with EUR470 million in the same period a year earlier. A consensus estimate provided by FactSet had forecast EUR1.27 billion. Siemens AG said Thursday that first-quarter profit and revenue grew as it continues to refocus itself as a leaner technology-centered company.

United States

Stocks dropped Thursday as bond yields rose in the wake of data showing inflation reached a new four-decade high, raising the stakes on whether the Federal Reserve will plot a more aggressive path on interest rates. The S&P 500, Dow Jones Industrial Average and Nasdaq Composite all fell at least 1.4%, while the yield on the 10-year U.S. Treasury note breached 2% for the first time since 2019. The S&P 500 fell 83.10 points, or 1.8%, to 4504.08, its first drop in three days. The Dow industrials shed 526.47 points, or 1.5%, to 35241.59. Technology stocks were hit harder, with the Nasdaq sliding 304.73 points, or 2.1%, to 14185.64 Another strong inflation report is likely to add to the urgency Federal Reserve officials will feel to speed up a series of interest-rate increases this spring to ease surging prices and cool the economy. Consumer prices in January rose 7.5% from a year earlier, and so-called core inflation, which excludes more volatile food and energy items, rose 6%. Both were their highest levels in 40 years. But the Fed is likely to pay greater attention to the monthly figures, which showed inflation pressures were still broadening in January. On a monthly basis, core inflation rose 0.6% from December. -Cola Co. and PepsiCo Inc. reported higher quarterly sales as the global soda giants pushed through price increases but also felt the squeeze of higher costs for commodities and transportation. Coke’s organic revenue increased 9% in the quarter ended Dec. 31, driven by a 10% increase in prices. Organic revenue at PepsiCo, which also sells Doritos, Lays potato chips and other packaged foods, rose 11.9% with a 7% increase in prices. Organic revenue strips out currency swings as well as acquisitions or divestitures.


The East Asian stock markets were only partially affected by the very weak Wall Street. While trading in Tokyo paused for a holiday, the index in Seoul, South Korea, fell 0.6 per cent. In Sydney, trading has already ended with a minus of 1.0 per cent after three days of previous gains.


Yields on the US bond market rose massively. The yield on ten-year US securities rose to the 2.00 per cent mark for the first time since July 2019 after the data, eventually climbing 10 basis points to 2.04 per cent. The short end, which is more sensitive to interest rate hikes, saw an even stronger rise. The yield on two-year securities jumped by a quarter of a percent.


Citi lowers Unilever target to GBP 43 (45) – Buy

CS raises Verbund target to EUR 77.50 (74) – Underperform

UBS lowers ABN AMRO target to EUR 14 (14.60) – Neutral

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