Zoom Revenue Up on Growth From Big Customers
Topic of the day
Zoom Video Communications Inc. posted higher sales in the fourth quarter on strong growth from enterprise customers and forecast profit ahead of Wall Street expectations. The videoconferencing company said sales grew 4% to $1.12 billion, just ahead of the $1.1 billion expected by analysts recently polled by FactSet. Enterprise revenue rose 18% compared with last year, while online revenue, which measures individual customers, fell 10%. Looking ahead, Zoom guided for adjusted profit for the current quarter and coming year ahead of Wall Street estimates, although its sales forecasts came in short. Shares rose more than 5% in aftermarket trading. The stock is down about 41% over the last 12 months. Full-year revenue is expected between $4.44 billion and $4.46 billion, below expectations of $4.6 billion, while per-share earnings are seen between $4.11 and $4.18 on an adjusted basis, topping expectations for $3.66. Zoom’s results come after companies across all industries - but particularly in technology - have reported slower growth as deals take longer to close and budgets are tightened. Layoffs have resulted. Zoom earlier this month said it is laying off 1,300 employees, or 15% of its staff.
On Monday, the SMI added 0.3 per cent to 11,220 points. Among the 20 SMI stocks, there were 18 price gainers and 2 price losers. 36.59 (previously: 33.04) million shares were traded. Banking stocks were the most sought-after, with Credit Suisse the day's SMI winner posting a gain of 2.3 per cent. UBS advanced by 1.2 per cent. The European banking sector was one of the best performers, up 1.5 per cent. In contrast, the shares of defensive index heavyweights Novartis and Roche lost up to 0.6 per cent. Nestle increased by 0.3 per cent. Holcim shares rose 2.2 per cent to 57.94 francs after a positive analyst comment. The group had presented robust results for the 2022 financial year, DZ Bank attested. Holcim had successfully set the course towards lighter building materials with a lower carbon footprint as well as being well positioned to benefit from the positive outlook in the renovation market and the trend towards "green" construction. The price target was raised to CHF 65 from CHF 58 and the buy recommendation was confirmed.
European stocks traded higher on Monday as investors continued to digest last week's strong U.S. economic data which have rekindled fears about restrictive Federal Reserve policy. Over the next few days, traders will be looking out for a series of economic indicators, including inflation in the eurozone for the month of February. The Stoxx Europe 600 index rose 1.1% to 462.6 points. In Paris, the CAC 40 and the SBF 120 gained 1.5% each. The DAX 40 index in Frankfurt climbed 1.1% and the FTSE 100 in London advanced 0.7%. Satellite operator SES (-3.5%) issued an adjusted gross operating profit (Ebitda) forecast for 2023 below analysts' expectations, JPMorgan noted. Goldman Sachs raised its recommendation on tyre maker Michelin (+2.7%) from "neutral" to "buy" and increased its target price from €27 to €35. The chairman of the board of Airbus (+1.4%), René Obermann, proposed to the British activist investment fund TCI to discuss this Monday the project of the aeronautics group to take a 29.9% stake in the capital of Evidian, a future division of Atos (+5%), according to Friday's report by the daily Les Echos. The share price of Swedish clothing group Hennes & Mauritz (H&M) jumped 4.2% on the Stockholm Stock Exchange after Bank of America raised its recommendation to "buy" from "underperform" and boosted its target price for the stock from 90 to 165 Swedish kronor. UK retailer Bunzl (+2.5% in London) increased its dividend for 2022 and announced the acquisition of German workwear and personal protective equipment distributor Arbeitsschutz-Express. Associated British Foods added 1.4% in London. The owner of retailer Primark lifted its outlook for its 2022-2023 off-year.
A rebound in shares of fast-growing technology firms helped U.S. stock indexes eke out gains Monday after logging their worst week of the year. Consumer discretionary, industrial and information technology shares led the S&P 500 higher, while so-called safety stocks in utilities, healthcare and consumer staples declined. The S&P 500 gained 12.20 points, or 0.3%, to close at 3982.24, while the Dow Jones Industrial Average added 72.17 points, or 0.2%, to end at 32889.09. The Nasdaq Composite increased 72.04 points, or 0.6%, to 11466.98. Union Pacific popped $19.45, or 10%, to close at $212.17 after the railroad company said it would acquiesce to pressure from an activist hedge fund and replace its chief executive. Renewable-energy companies Enphase Energy and SolarEdge Technologies each added more than 5%. Tesla continued to rally, rising $10.75, or 5.5%, to $207.63, bringing its 2023 gains to 69%. Pfizer, reported to be in talks to acquire biotech company Seagen for more than $30 billion, was among the index’s laggards, declining 97 cents, or 2.3%, to $40.78. Seagen, which helped pioneer a class of cancer therapy known as antibody drug conjugates that attack tumours with toxic agents, rose $16.79, or 10%, to $178.16. Through Monday, the S&P 500 was up 3.7% for the year, while the Nasdaq Composite gained nearly 10% as tech stocks such as Apple and Meta continue to post big gains. The blue-chip Dow has lost 0.8%. Monday added more mixed signals for investors. U.S. durable-goods orders fell a sharper-than-expected 4.5% in January, though new orders for non-defence capital goods excluding aircraft - a closely watched proxy for business investment - increased 0.8% from the prior month. Meanwhile, the housing market showed another sign it is thawing, as pending home sales increased in January for the second straight month, up 8.1% from December, the National Association of Realtors said Monday. The Fed has made slowing the red-hot pandemic housing market with higher borrowing costs central to its fight against inflation. Investors will also watch data this week on U.S. manufacturing and services as well as European inflation.
Asian stocks were little changed to slightly up on Tuesday following positive news from the USA. However, investors are holding back ahead of the eagerly anticipated Chinese purchasing managers' index on Wednesday, which is why profits are limited. In Japan, the Nikkei 225 index rose by 0.1 per cent. In Seoul, the Kospi added 0.5 per cent. The stock exchange there remains closed on Wednesday for a public holiday. The Composite Index in Shanghai is barely changed, as is the Hang Seng Index in Hong Kong. On the Chinese stock exchanges, telecom stocks stand out with above-average performance after the government in Beijing presented its latest digitalisation plan. In Hong Kong, ZTE is up 6.1 per cent. China Unicom improves by 4.2 per cent, China Mobile by 2.3 per cent and China Telecom by 3.9 per cent. In Shanghai, shares of telecoms equipment maker Nanjing Huamai Technology jump 10 per cent.
U.S. government debt yields pulled back Monday, though the policy-sensitive 2-year rate remained near an almost 16-year high, as buyers returned to Treasuries. The 10-year Treasury note was yielding 3.93%, down 2 basis points while the 2-year Treasury note fell 2 basis points to 4.784%.
DZ Bank upgrades Holcim target to CHF 65 (58) - Buy
UBS lowers Vontobel to CHF 56 (74.90) - Neutral
Deutsche Bank lifts Schindler to CHF 221 (183) - Buy
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