Schindler profit dragged down by past commitments and China slowdown
Topic of the day
Schindler, the Swiss manufacturer of lifts, struggled last year with past commitments, the downturn in China, supply chain problems and inflation. The lift and escalator manufacturer's profits plummeted. In the current year, things should start to look brighter again. Operating profit (EBIT) plummeted by 22.5 per cent to 904 million Swiss francs, as the group announced in a communiqué. This is the first dip below the billion-franc mark and the worst result in a decade. Bottom line, net profit slumped by a quarter to 659 million francs. In contrast, sales rose by 1 percent to 11.35 billion Swiss francs. Schindler expects sales to grow in the low single-digit range measured in local currencies during 2023. Due to the slowdown in the global economy and pressure on the real estate and construction sectors, the Group anticipates a further decline in new installations, while modernisations and service should continue to grow in all regions. Schindler advanced, with the share price rising 7.6 per cent. The company intends to pay an undiminished dividend of 4 Swiss francs per share, despite a significant drop in profits.
The Swiss stock market held up well on Wednesday. The SMI gained 0.2 per cent to 11,300 points. Among the 20 SMI stocks, there were ten price gainers and nine price losers, with one share closing unchanged. 38.39 million shares were traded (previously: 65.31 million). Losses were recorded by technology stocks, tracking their US counterparts downwards, which usually suffer particularly badly from the anticipation of rising interest rates. Logitech fell 3.6 per cent, further weighed down by a downgrade to "neutral" by UBS. The analysts criticised the lack of forecast certainty for sales, especially against the backdrop of fierce competition and low barriers of entry. At Givaudan (+1.4%), an investment was positively received. With the acquisition of the US bioscience company Amyris, the company is consolidating its position in the fast-growing cosmetics market, Vontobel said. Credit Suisse (+2.3%) recovered slightly from the previous day's price loss. The drop was caused by the news that the Swiss financial regulator Finma is investigating statements made by the chairman of the board Axel Lehmann about net cash outflows to see whether they may have been misleading. Richemont slipped 0.2 per cent. On Tuesday, shortly before the close of trading, rumours of interest from France's LVMH had pushed the stock sharply higher. Market participants, however, waved off such rumours, pointing out that they had been circulated before. Swatch shed 0.9 per cent. Meanwhile, Siegfried, a contract manufacturer for the pharmaceutical industry, missed expectations in the past business year. The share fell by 10.3 per cent.
European stocks suffered broad losses on Wednesday, as concerns about higher U.S. interest rates and intensifying geopolitical fears continued to weigh on investor sentiment. The Stoxx Europe 600 index fell 0.3% to 462.2 points. In Paris, the CAC 40 and SBF 120 were down 0.1% and 0.2% respectively. The DAX 40 index in Frankfurt ended flat, while the FTSE 100 in London gave up 0.6%. After disappointing figures from Rio Tinto, the sector index of mining stocks was the worst performer, with a drop of 2.1 per cent. BASF fell by 0.2 per cent. The chemical company could shut down part of its ammonia production in Ludwigshafen. According to the Handelsblatt, BASF will announce this next Friday at a press conference regarding its annual results. BASF has so far operated two ammonia plants in Ludwigshafen, which were temporarily shut down last year due to high gas prices. Rio Tinto slipped 3.6 per cent in London. Net profit fell 41 per cent last year and also missed expectations. Danone, meanwhile, gained 4.5 percent. "Organic growth was slightly higher than expected, up 7 per cent," a trader remarked. The rest of the business figures were in line with expectations, he added, and so was the outlook. Wolters Kluwer (+5.4%) rose after presenting business figures. According to Citi, the figures were just above expectations. However, the outlook for organic growth of 6 per cent was particularly convincing. The consensus had previously expected only 4 per cent.
Worries about rising interest rates sent the S&P 500 to a fourth consecutive session of declines on Wednesday, notching its longest losing streak of the year. The S&P 500 fell 6.29 points, or 0.2%, to 3991.05. The Dow Jones Industrial Average lost 84.50 points, or 0.3%, to 33045.09. The Nasdaq Composite slipped in early trading and pared those losses to finish up 14.77 points, or 0.1%, to 11507.07. The back-and-forth in trading Wednesday reflects a recent shift in the stock market. After racing higher to kick off 2023, U.S. stocks suffered their worst session of the year on Tuesday. Investors have parsed stronger-than-expected economic data, including readouts on inflation and retail sales as well as business-activity surveys. The new data has caused investors to sharply reassess their outlooks for interest rates and has led to a steep jump in the 10-year Treasury yield, stoking volatility across markets. Shares of Palo Alto Networks jumped $20.86, or about 13%, to $187.75 after the cybersecurity company swung to a profit last quarter and raised its guidance for the full fiscal year. CoStar shares declined $3.89, or 5.1%, to $72.13, after it said it wouldn’t buy a real-estate business from News Corp, the parent of The Wall Street Journal, and issued a weaker-than-expected first-quarter forecast. Shares of online job recruiter ZipRecruiter plunged almost 23 per cent after a drop in sales and a weak outlook. Interior decorator La-Z-Boy (+15.1) benefited from increased earnings and sales. Homebuilder Toll Brothers (+3.0 per cent) reported a decline in quarterly profit and revenue, though each still did better than expected. Intel declined 2.3 per cent after the chipmaker slashed its dividend by 66 per cent and reiterated its pessimistic outlook issued in January.
Asian stocks were mixed on Thursday. In Seoul, the stock market rose by 1.1 per cent after the South Korean central bank left its key interest rates unchanged this time. In Hong Kong, the HSI gained half a percent following a weaker opening, while Shanghai held its ground. In Tokyo, trading was suspended due to the Emperor's birthday holiday. Among the individual stocks, Hong Kong Exchange climbed 4.2 per cent. The stock exchange operator presented business figures received favourably.
The yield on the 6-month U.S. T-bill rose to an almost 16-year high on Wednesday after minutes from the Federal Reserve’s last meeting indicated that all policy makers wanted to keep hiking interest rates. The 10-year Treasury note eased by 4 basis points to 3.918%. The 2-year Treasury note edged 1 basis point lower to 4.693%.
LBBW raises ABB target to CHF 31 (28.50) - Hold
CS lowers DSM target to EUR 128 (138) - Outperform
UBS cuts K+S target to EUR 21 (22) - Neutral
Produced by MBI Martin Brückner Infosource GmbH & Co. KG on behalf of Swissquote. All news is acquired with journalistic accuracy. No liability is assumed for delays or errors.