Swiss banking giant Credit Suisse said yesterday a strong performance by its investment banking unit helped first quarter net profit rise by 23% to 1.05bn Swiss francs (€1.02bn, $1.1bn), outstripping forecasts by analysts.
Its investment bank posted a 14% rise in pre-tax profits to 945mn francs.
CEO Brady Dougan said that while trading revenue was higher than last year, the bank had a “difficult start to the year” due to a slowdown in underwriting only to benefit from later volatility in the markets.
The Swiss central bank shocked domestic and global markets with its decision on January 15 to end three years of efforts to hold down the value of the Swiss franc against the euro, sending the currency soaring.
“Our swift and proactive response to the changed currency and interest rate environment post the Swiss National Bank’s announcement, combined with an improvement in market activity, mitigated the impact on our results and led to higher revenues in our Wealth Management Clients business,” said Dougan.
“In our well-diversified Investment Banking franchise, we achieved consistent strategic results and reported a return on regulatory capital of 19%, despite further significant deleveraging.”
Dougan, who was presenting his last quarterly results, sounded an optimistic note on the coming three months and the rest of the year.
“Looking at the second quarter to date, the momentum in the businesses has carried over from the first quarter, with an improving trend in underwriting and advisory,” he said.
“We remain committed to our capital and leverage goals and expect to make further progress in executing our strategic initiatives over the balance of 2015.”
Dougan will make way for the Franco-Ivorian Tidjane Thiam, now head of the British insurer Prudential, in June.

SAP
The weaker euro boosted revenue at German business software maker SAP in the first three months of the year and drove operating profit up 15%, although a rise in newer cloud-based software sales squeezed margins.
Europe’s largest software company said yesterday its first-quarter operating profit, excluding special items, rose to €1.06bn ($1.13bn), matching the average of forecasts given by analysts in a Reuters poll.
First-quarter revenue rose 22% to €4.5bn, at the top of market forecasts, boosted both by the weaker euro and the $7.3bn acquisition of Concur, the online staff travel and expenses manager.
At constant exchange rates sales rose 10%.
The declines reflected increased investments in SAP’s newer cloud-based software services, where revenues from new sales come later in the form of subscription payments.
SAP eked out 1% growth in licence sales for its mainstay packaged software business, which analysts said reversed four quarters of declines in the key metric of its core business performance.
“Results and the stock have been helped by FX but that is only part of the story,” Mark Moerdler, an analyst at Sanford Bernstein, said in a research note.
“SAP is starting to deliver with cloud strength combined with stability in the core on-premise license & maintenance revenue,” said Moerdler, who has an “outperform” rating on the stock.
SAP’s results were in some ways the mirror opposite of US technology services giant IBM, which on Monday posted its 12th quarter of revenue decline as it sheds unprofitable businesses to focus on cloud computing.
SAP said it expects to produce around €2bn ($2.14bn) in cloud software and services revenue in 2015 and aims to quadruple that number by 2020, when around 30% of its total revenue will come from the cloud.
The company stuck to its outlook for the full year for non-IFRS operating profit of between €5.6bn and €5.9bn at constant currencies, which represents flat growth to a rise of as much as 5% from €5.6bn last year.
Including the effect of the weaker euro, which makes the multinational software maker’s products and services more competitive outside Europe, second-quarter operating profit is expected to grow as much as 18%, the company said.

Harley-Davidson
A strong US dollar allowed Harley-Davidson’s foreign competitors to aggressively undercut its prices in the first quarter, the iconic motorcycle maker said yesterday, hurting sales and prompting it to lower 2015 shipment forecasts.
The news sent the company’s shares down more than 9% in early trading.
Milwaukee, Wisconsin-based Harley-Davidson said the discounting had primarily affected sales in the US, where it does most of its business. Executives said on a conference call that the company’s US market share had slipped close to 5 percentage points to 51.3% in the quarter as competitors offered discounts of up to $3,000 per bike and slashed their suggested retail prices by up to 25%.
The company said that the second quarter will be its weakest of the year as the full impact of the strong dollar hits home.
Harley-Davidson posted a quarterly net profit of $269.9mn, or $1.27 per share, for the first quarter, up 1.5% from $265.9mn, or $1.21 per share, a year earlier.
Analysts had expected earnings per share for the quarter of $1.25.
Revenue dipped to $1.67bn from $1.73bn a year earlier. That came in above analysts’ expectations of $1.58bn.
Harley-Davidson’s worldwide retail sales fell 1.1% to 56,661 motorcycles from 57,415 in the first quarter of 2014. Sales in its key US market fell 0.7% to 35,488 from 35,730.

Gannett
Gannett Co, publisher of USA Today, reported a better-than-expected profit as revenue from its digital business soared.
Revenue in the digital business, which includes Cars.com and CareerBuilder.com, jumped 85.1% to $332.7mn in the first quarter ended March 29, from a year earlier.
Revenue from the publishing business fell 13.9% to $50.5mn.
Gannett said in August that it would spin off its print operations, including USA Today, joining a host of media companies separating slower-growing publishing assets from TV and digital properties.
In March, activist investor Carl Icahn withdrew his nominations to the company’s board.
Icahn also agreed not to acquire or own more than 15% of Gannett’s or the spun-off business’s voting securities.
Net income attributable to Gannett rose to $112.9mn, or 49 cents per share, in the first quarter, from $59.2mn, or 25 cents per share, a year earlier.
Excluding items, the company earned 49 cents per share, above the average analyst estimate of 45 cents, according to Thomson Reuters I/B/E/S.
Cost of sales and operating expenses fell 8.7% to $700.6mn.
Revenue rose 5% to $1.47bn. Analysts on average had expected $1.52bn.

Under Armour
Under Armour reported a 13.4% fall in first-quarter profit as costs rose following a pair of acquisitions and the sports apparel maker issued an updated full-year revenue forecast that fell short of market expectations.
Under Armour bought fitness tracking services Endomondo and MapMyFitness in February for about $560mn, moving further into the “connected fitness” market.
The company wants to boost sales by integrating fitness tracking services with its sportswear and use insights about consumers’ health and fitness to sell more clothing and shoes.
Baltimore-based Under Armour raised its 2015 revenue forecast to $3.78bn, which would be an increase of about 23% from 2014.
Analysts on average had expected $3.82bn, according to Thomson Reuters I/B/E/S.
In February, Under Armour said it expected full-year revenue of $3.76bn.
The company, which recently dislodged Adidas AG <Ads gn.de> as the No. 2 sports footwear and clothing brand by sales in the US behind Nike Inc, said apparel revenue rose about 21% to $555mn in the quarter.
Footwear revenue rose 41% to $161mn, helped by strong demand for its Speed Form running shoes and Curry One basketball shoes.
The company’s net income fell to $11.7mn, or 5 cents per share, from $13.5mn, or 6 cents per share, a year earlier.
Revenue rose about 25.5% to $804.9mn.
Analysts on average had expected a profit of 4 cents per share on revenue of $802.5mn.

Kimberly-Clark
Kimberly-Clark Corp reported better-than-expected quarterly profit as it cut costs and raised prices for its personal care products, such as Huggies diapers and Poise and Depend adult diapers.
Net selling prices in the company’s personal care business, the company’s biggest revenue contributor, rose 2% and sales volumes increased 4% in the first quarter ended March 31.
Kimberly-Clark also benefited from cost savings of $10mn due to a restructuring program started in 2014.
However, the company, which gets about half of its sales from outside North America, said it expects foreign currency to hurt 2015 sales by 9-10% in 2015.
It had earlier expected an impact of 8-9%.
A strong dollar reduces the value of overseas sales when they are translated back into US dollars.
First quarter sales fell 4% to $4.69bn, but was higher than analysts’ average estimate of $4.61bn, according to Thomson Reuters I/B/E/S.
Net income attributable to Kimberly-Clark fell 13% to $468mn, or $1.27 per share.
Excluding items, the company earned $1.42 per share, higher than analysts’ average estimate of $1.33.

DuPont
Chemical maker DuPont reported lower sales in all of its businesses and said a strong dollar would take a bigger toll on its full-year earnings than it had expected.
The company’s shares were down 1.6% at $71.66 in light trading before the bell.
Dupont, which receives 60% of sales from outside the US, said it expects a strong dollar to reduce its 2015 profit by 80 cents per share, higher than its earlier forecast of 60 cents.
The company said it expects full-year operating earnings to be at the low end of its forecast of $4.00-$4.20 per share.
DuPont is targeting annual cost cuts of $1bn and expects the savings to add 40 cents per share to 2015 profit.
The company expects to meet two-thirds of its cost savings target from work force reductions and the remaining from streamlining its asset base by consolidating facilities, or outsourcing some services.
Cost cuts added 10 cents to DuPont’s operating profit in the quarter ended March 31, helping mitigate the impact of a 10% fall in agriculture sales, the company’s biggest unit.
The company, which is locked in a proxy battle with activist investor Nelson Peltz, also raised its quarterly dividend to 49 cents per share from 47 cents yesterday.
DuPont is only days away from a shareholder vote which will decide if Peltz will get the four board seats he has been campaigning for. The company’s shareholder meeting will be held on May 13.
Peltz has criticized DuPont for missing earnings expectations, among other things.
The activist investor wants DuPont to separate its materials businesses from its nutrition and health, agriculture, and industrial biosciences divisions.
Net income attributable to DuPont fell 28% to $1.03bn, or $1.13 per share, while sales fell 9% to $9.17bn. Excluding items, the profit was $1.34 per share.
Analysts on average expected a profit of $1.31 per share on revenue of $9.41bn, according to Thomson Reuters I/B/E/S.

Travelers
Property and casualty insurer Travelers Cos reported a 21% fall in quarterly net profit due to lower net investment income and a drop in underwriting gains.
Shares of Travelers, a Dow Jones Industrial Average component, fell 2% to $104.02 in premarket trading.
The company said net income fell to $833mn, or $2.55 per share, for the first quarter ended March 31, from $1.05bn, or $2.95 per share, a year earlier.
Pretax net investment income fell nearly 20% to $592mn, while underwriting gains fell 21.6% to $620mn.
Travelers said yesterday a drop in reinvestment rates and lower interest rates hurt fixed-income investments.
The company said its private equity returns were hit in the quarter by lower valuations for energy-related investments.
On an operating basis, Travelers earned $2.53 per share. Analysts expected the insurer to earn $2.54 per share, according to Thomson Reuters I/B/E/S.
Travelers’ combined ratio, the percentage of premium revenue an insurer has to pay out in claims, rose to 90.3% in the quarter from 88.2% a year earlier.
A combined ratio of under 100 indicates an underwriting profit. Pretax catastrophe losses, net of reinsurance, rose to $162mn from $149mn.

ARM
ARM Holdings, the British chip designer favoured by Apple, beat expectations for first-quarter profit thanks to demand for the iPhone 6, and said its royalties would grow as its latest technology is used in more smartphones.
Shares in the Cambridge-based company rose to an all-time high of 1,233 pence after it posted a 24% rise in first-quarter pretax profit to £120.5mn ($179.1mn).
That beat analysts’ expectations of £115mn, according to a company-provided consensus.
“In the second half of 2015 we expect to benefit from the increasing deployment of ARMv8-A technology, our latest generation of processors, in the newest smartphones and tablets,” Chief Financial Officer Tim Score said on Tuesday.
“These chips typically have a slightly higher royalty rate than the previous generation.”
Royalty revenue, collected a quarter in arrears from a record 3.8bn chips shipped, rose 26% on an underlying basis, ARM said. ARM’s processor licensing revenue dipped 2%, missing market forecasts, but Score said he expected licensing revenue to rise 5-10% in the longer term.
Industry-wide revenues had slipped after a busy fourth quarter, in line with normal seasonal trends, which would be reflected in its second quarter, Score said. But overall second-quarter revenue would be in line with market expectations, which stand at $354.6mn.

APR Energy
APR Energy, a provider of temporary power systems, said its 2015 net loss would be in line with or larger than market expectations, hinging on how fast it is able to redeploy equipment from Libya, where it terminated its contract.
Shares in the company fell as much as 11% in early trade yesterday and were among the top percentage losers on the London Stock Exchange.
Analysts polled ahead of the results expected a 2015 net loss of between $15mn and $50mn, Chief Finance Officer Lee Munro said.
APR Energy also reported a pretax loss of $723.6mn for the year ended December 31 and did not pay out a dividend. It had posted a pretax profit of $27.5mn a year earlier.
The company, which rents out 25-megawatt turbines and generators to overcome short-term power shortages, said in January it had decided to quit Libya as the government there did not ratify its key contract.
The exit forced APR to renegotiate its credit facility earlier this year to avoid breaching its debt covenants.
APR took a non-cash impairment charge of $717.4mn for the year, largely against goodwill relating to Libya. It also made a provision for receivables of $47mn.
However, revenue grew 58% to $485.7mn, as many customers renewed their contracts and APR bagged some new ones.

AB Foods
Associated British Foods, owner of budget fashion retailer Primark and British Sugar, warned yesterday that earnings for its current financial year would be hit by major currency moves and could be damaged even more next year if current exchange rates persist.
The US dollar/euro exchange rate has moved by more than 20% over the last year as the US currency has appreciated and the euro has weakened. The impact on AB Foods’ adjusted operating profit from the translation of overseas results into sterling was a loss of £11mn ($16.4mn) in the first six months of its financial year ending this September.
If current rates persist it said the hit for the full year would be about 25mn pounds.
However, the group cautioned that currency movements will potentially have a greater impact where it manufactures or purchases in one currency and sells in another.
AB Foods’ sugar business has a sterling cost base but most of its sales are denominated in euros, while Primark buys a substantial proportion of its garments in dollars and sells in euros and sterling.
“If the current euro weakness against sterling and the US dollar persists this will have an impact on the group’s operating profit for the remainder of this financial year and a greater impact next year,” it said.
Chief Executive George Weston told Reuters the firm’s working assumption had to be that current exchange rates continue.
 “We have to mitigate the financial effects of it to the extent that we’re able to and we have to, in Primark’s case, protect our consumers from the effect of it,” he said.
AB Foods made an underlying operating profit of £474mn in the six months to February 28, in line with analysts’ forecasts but down from £497mn in the previous corresponding period.

IBM
International Business Machines Corp reported a 12% fall in first-quarter revenue as the technology company continues to shed unprofitable businesses to focus on cloud-computing initiatives.
Shares in the world’s largest technology services company flitted around the unchanged mark in after-hours trading.
It was the 12th straight quarter that the Armonk, New York-based company reported a drop in quarterly revenue, including the effects of currency.
IBM’s revenue has been shrinking for three years now as the company sheds low-profit businesses such as cash registers, low-end servers and semiconductors and focuses on emerging areas such as security software and cloud services, but the new businesses have so far failed to make up for revenue lost to divestitures.
Most investors are showing patience with IBM’s slow transformation, but there are signs that some are uneasy after a 13% decline in its shares over the past 12 months. Some top shareholders have sought help from activist investors to shake up the company, Reuters reported earlier this month
IBM did say that it has generated $7.7bn in total cloud revenue over the past 12 months, up sharply from the year before.
Technology investors are intently focused on the new Internet-based “cloud” model and which companies are making money from it. Amazon.com Inc, a leader in the sector, is expected to disclose financials from its Amazon Web Services cloud unit for the first time later this week.
IBM, which gets more than half its revenue from overseas, also said it now expects a 7% impact from currency headwinds in the full year. It said in February it expected more than 6%.
Net income fell slightly to $2.33bn for the quarter ended March 31 from $2.38bn a year earlier. On a per share basis, profit rose to $2.35 from $2.29 as there were fewer shares outstanding in the first quarter.
Excluding some charges, it earned $2.91 per share, well ahead of analysts’ average forecast of $2.80, according to Thomson Reuters I/B/E/S.
Total revenue fell to $19.6bn from $22.2bn. That was broadly in line with analysts’ average estimate of $19.64bn.

Wipro
Wipro, India’s third-biggest software services exporter, has appointed the son of billionaire founder Azim Premji to its board, in a long awaited promotion that moves the chairman’s heir apparent closer to the top spot.
Rishad Premji, eldest son and a Harvard Business School graduate, was already Wipro’s chief strategy officer. He joins the board from May 1.
The appointment was announced yesterday alongside Wipro’s fourth-quarter earnings and a modest 2% rise in profit.
That beat expectations of a slight dip, thanks to a rise in its Western clients’ technology spending.
Wipro founder Azim Premji took over his own father’s ailing vegetable oil business in the mid-1960s. He diversified into making hydraulic cylinders in the 1970s and struck out into information technology in 1980.
“There is nothing much to be read into this other than the fact he is really representing shareholders’ interest,” Wipro’s Chief Executive Officer TK Kurien told reporters, when asked about Rishad’s elevation to the board.
For its fourth quarter ended March 31, Wipro’s net profit rose to Rs22.72bn ($361.38mn), compared with Rs22.27bn in the same period the previous year, the company said in a statement.
Analysts, on average, had expected Wipro to report a profit of 21.8bn rupees, according to Thomson Reuters data.
Total revenue rose to Rs121.4bn in the quarter, a rise of 4% over last year, as the company added 65 new clients.
Wipro, which makes about three quarters of its sales in the US and Europe, said its IT services revenue is likely to be $1.77bn to $1.79bn in the June quarter, growth of up to 1.1% from the preceding quarter.
Wipro has been looking to boost revenue from high margin services that help overseas clients seeking to speed up automation and do more business online.