By Swissquote Analysts
Netflix Q4 Subscriber Growth Above Expectation - Reed Hastings Transitions to Chairman Role
Topic of the day
Shares of Netflix Inc. gained over 6% in extended session on Thursday after the online-video streaming giant reported fourth-quarter results, with earnings missing Street view. However, the company added over 7 million subscribers, beating its expectations. The company also announced that Reed Hastings is resigning from Co-CEO role. Netflix added 7.66 million subscribers globally in the quarter, which was better than the company's estimate of 4.50 million. The company ended the quarter with 230.75 million subscribers. Los Gatos, California-based Netflix's fourth-quarter profit dropped to $55 million or $0.15 per share from $607 million or $1.33 per share last year. On average, 32 analysts polled by Thomson Reuters expected earnings of $0.45 per share for the quarter. Netflix's revenues for the quarter rose 1.9% to $7.852 billion from $7.709 billion last year. Analysts had a consensus revenue estimate of $7.85 billion for the quarter. Revenue growth was driven by an 4% increase in average paid streaming memberships. Looking forward to the first quarter, Netflix expects revenues of $8.172 billion and earnings of $2.82 per share. Analysts currently expect earnings of $2.97 per share and revenues of $8.15 billion. Greg Peters will now serve as Co-CEO along with Ted Sarandos, with Hastings to continue with the company as Executive Chairman, the company said. NFLX closed Thursday's trading at $315.78, down $10.55 or 3.23%, on the Nasdaq. The stock, however, gained $19.08 or 6.04% in the after-hours trading.
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On Thursday, the SMI lost 0.9 per cent to 11,259 points. Among the 20 SMI stocks, there were 18 price losers, only Holcim edged higher, while Swisscom closed unchanged. 58.42 (Wednesday: 45.75) million shares were traded. Credit Suisse fell 6.5 per cent and UBS lost 2.5 per cent. Partners Group slipped by 4.8 per cent. In addition, shares of cyclical companies such as ABB (-2.3 per cent) or Sika (-2.2 per cent) ranked far behind. Givaudan slid 2.4 per cent following a downgrade to "neutral" by Bank of America. Shares of less cyclical companies such as heavyweights Nestle (-0.1%), Novartis (-0.3%) and Roche (-0.5%) held up comparatively well. After the construction supplier Geberit (-1.4%) had still benefited strongly from the expansion of inventories in wholesale in the first half of the year, these effects disappeared in the second half. The Geberit Group achieved exchange rate-adjusted net sales growth of 4.8% in a challenging environment. The results of Zur Rose (-2.2%) were viewed differently by analysts. According to Baader, the Swiss online pharmacy is achieving solid progress. While the business in Germany is weakening, it is growing in the domestic market. The programme to reach EBITDA break-even in 2023 will be achieved regardless of the ramp-up speed of the e-prescription roll-out in Germany. Jefferies, on the other hand, criticised customer attrition, which hinders the achievement of 2022 revenues in 2023.
The European stock markets closed sharply lower on Thursday as investors were frustrated by restrictive comments from European Central Bank (ECB) President Christine Lagarde and fears of a US recession. The Stoxx Europe 600 index lost 1.6% to 450.5 points. In Paris, the CAC 40 fell by 1.9% to below the symbolic 7,000-point mark, and the SBF 120 lost 1.8%. The DAX 40 in Frankfurt declined by 1.7%, while the FTSE 100 in London fell by 1.1%. Veterinary laboratory Virbac (+6.1%) reported higher-than-consensus annual sales, thanks to strong momentum in the fourth quarter, and was more optimistic about its operating profit forecast for 2022. The operator of retirement homes and clinics Orpea (-7.8%) was the biggest decliner on the SBF 120. Barclays has raised its recommendation on Accor hotels (+1.3%) from "underweight" to "neutral weight" and has revised its 12-month price target from €21 to €29. The bank indicates that the increase in demand and the recovery of activity in China should enable the group to improve its revenue per available room (RevPAR) in 2023. Goldman Sachs lifted its recommendation on JCDecaux (+0.4%) from "sell" to "neutral". The bank estimates that the group's revenues in China should reach 90% of their 2019 level this year, compared with 60% to 65% in 2022. Automotive supplier Faurecia (-4.7%) has completed the refinancing of the acquisition of its German counterpart Hella, a combination that created the Forvia group early last year. Faurecia reported that it had placed a total of €250 million of additional sustainability bonds with a maturity of 2026 and a 7.25% coupon through a private placement arranged by BNP Paribas.
U.S. stocks extended a string of losses Thursday as economic data and corporate-earnings reports clouded investors’ views of the health of the economy. After opening lower, the S&P 500 couldn’t regain much momentum, falling for a third straight day. It dropped 30.01, or 0.8%, to 3898.85. The Dow Jones Industrial Average declined 252.40, or 0.8%, to 33044.56, sliding into negative territory on the year. The technology-heavy Nasdaq Composite Index lost 104.74, or 1%, to 10852.27. On Thursday, tepid earnings reports drove notable declines in individual stocks. Aluminum producer Alcoa fell $3.93, or 7.4%, after it reported a slump in revenue due to lower aluminum prices, closing at $49.52. Credit-card issuer Discover Financial lost 44 cents, or 0.4%, to $101.90. The company reported after Wednesday’s close that more of its customers are falling behind on payments on loans and credit cards. Procter & Gamble stock fell $3.08, or 2.1%, to $142.42. The consumer-goods giant reported a lower quarterly profit and declining sales volumes as the rising costs of Tide detergent and other staples prompted consumers to cut back on purchases at the end of 2022. Shares in banks Truist Financial and Fifth Third climbed after they both reported year-over-year profit growth in the latest quarter. Truist gained $1.97, or 4.3%, to $47.71 and Fifth Third rose 92 cents, or 2.8%, to $33.64. Among the S&P 500 companies that have reported fourth-quarter results so far, sales performance seems to have generally held up better than profitability.
In Asia, major indexes broadly closed with gains. South Korea’s Kospi rose 0.5%, Hong Kong’s Hang Seng added 1.1% and Japan’s Nikkei 225 gained 0.3%. China’s Shanghai Composite edged 0.6% higher. In Tokyo, the published inflation data for December showed an increase of 4.0 per cent in the core rate, as expected by economists. This is the highest level in 41 years. In the Chinese heartland, shares of liquor manufacturers gain ahead of the New Year holiday: Wuliangye Yibin rises 2.4 per cent. Meanwhile, the Chinese central bank left key interest rates unchanged, as expected.
U.S. Government-bond prices edged lower on Thursday but have held on to most of their year-to-date gains, which have come as investors speculate the Fed’s rate hikes are winding down. The 10-year U.S. Treasury note yield bounced off a four-month low Thursday as a rally for bonds took a breather after data showed the U.S. labor market remains strong. In concrete terms, the 10-year Treasury note recovered 2 basis points to 3.396%. The 2-year Treasury note also stabilized, gaining 4 basis points to 4.139%.
Baader lowers target Lindt & Sprüngli to CHF 9,600 (10,500) - Reduce
CS raises target for Just Eat Takeaway to 4,000p - Outperform
UBS lifts Richemont target to CHF 162 (154) - Buy