The bank, Switzerland’s second biggest after UBS, posted a net profit of 2.1bn Swiss francs (€1.8bn, $2bn) in 2018, after a loss of 983mn the previous year, it said in a statement.
A vast overhaul of the Zurich-based lender was launched in late 2015 aiming to refocus the bank’s activities on wealth management over merchant banking.
Initially welcomed by investors, the reorganisation was met with sharp criticism as the bank posted three years of heavy losses.
chief executive Tidjane Thiam hailed the company’s swing back to profits after the revamp up last year.
Since the overhaul began in 2015, cumulative net cost savings beat expectations at 4.6bn francs.
While many the profits of many banks dropped in the last three months of 2018 due to market turmoil, Credit Suisse bucked the trend, achieving a net profit of 292mn francs.
Renault
French automaker Renault unveiled yesterday a sharp drop in earnings as profit plunged at its Japanese partner Nissan, posing a fresh challenge for their alliance after the shock arrest of former chief Carlos Ghosn last November.
The results came as Renault’s new chairman Jean-Dominique Senard was in Japan for talks with Nissan, hoping to smooth relations which grew strained under Ghosn’s leadership.
Renault’s net profit for 2018 fell 37% from a record €5.1bn ($5.75bn) the previous year, reflecting a slump in profits at Nissan, in which Renault holds a 43% stake.
Earlier this week Nissan slashed its full-year forecast as nine-month net profit dropped 45%. The earnings put additional pressure on the Renault and Nissan, which along with Mitsubishi form an alliance which has become the world’s top-selling automotive group.
Bombardier
Canada’s Bombardier Inc topped analysts’ forecasts for quarterly earnings yesterday, helped by its business jet unit, which benefited from demand for aftermarket services and higher-priced, large-cabin corporate planes, sending shares up 9.8% in early trading.
The results come as the Montreal-based plane and train manufacturer nears the end of a five-year turnaround which followed a series of heavy investments aimed at launching two planes that drove the company to the brink of bankruptcy in 2015.
The company is counting on its recently-launched Global 7500 business jet, which is sold-out through 2021, to help lift annual revenue by 10% this year and to over $20bn by 2020.
Still, quarterly revenue from Bombardier’s dominant transportation unit that makes rail cars and equipment, fell nearly 11% to $2.16bn as it faced delays in fulfilling a handful of contracts.
Bombardier replaced the head of its Berlin-based transportation unit earlier this month.
Earnings before interest and taxation (EBIT), a closely watched measure of Bombardier’s profitability, also beat analysts’ estimates, rising to $342mn from $73mn a year earlier.
Excluding one-time items, the company earned 5 cents per share, above analysts’ estimates of 2 cents, according to IBES data from Refinitiv.
Coca-Cola
Coca-Cola returned to profitability in the fourth quarter yesterday, but shares fell as a disappointing profit outlook pointed to a challenging soda market.
The cola giant reported quarterly earnings of $870mn, compared with a loss of $2.8bn in the year-ago period when it was hit by one-time tax costs.
Revenues fell 6% to $7.1bn due to the sale of bottling operations to franchise companies.
Volume was flat during the quarter globally, with strength in Central and Eastern Europe offset by weakness in Argentina and Central America, the company said.
Full-year volume grew by 2%, led by developing markets and “slight” growth in developed markets.
Coca-Cola and rivals have had a hard time boosting sales of soda due to worries about health and obesity.
The company has responded with more small packages, revamps of popular diet sodas and increased offerings in water and non-soda beverages.
The company forecast 2019 earnings per share would be in a range of 1% up or down from the $2.08 in 2018, significantly below the $2.28 per share seen by analytss.
Nestle
Nestle put its Herta processed meats business on the block yesterday, accelerating the world biggest food group’s revamp as it reported an uptick in sales growth in 2018 for the first time since 2011.
Improvements in China, North America and in its infant nutrition business last year helped the maker of KitKat chocolate bars and Nescafe coffee to break a run of sluggish growth linked to consumers’ preference for fresh food.
It forecast sales improvements of more than 3% in 2019.
Growth of 3.7% in the final quarter beat a 3.5% forecast in a Reuters poll.
This also exceeded the 2.9% quarterly growth reported last month by rival Unilever, which expects 2019 growth at the bottom end of a 3-5% forecast range.
Nestle’s net profit jumped 42% to 10.1bn Swiss francs ($10.02bn) thanks to the divestment of its US confectionery business, while the margin improved to 17.0%.
The group increased its dividend to 2.45 francs per share and said it would accelerate its 20bn share buyback to finish the programme ahead of schedule by the end of 2019.
Puma
Sportswear group Puma gave a conservative forecast for 2019 yesterday despite strong fourth-quarter sales helped by demand for its chunky RS-X shoes and Cali sneakers, sending its shares down more than 6%. Chief executive Bjorn Gulden conceded that the new target was cautious, but also said: “When there is upside, we’ll take it. Then we will do more.”
Puma’s fourth-quarter sales rose a currency-adjusted 20% to €1.226bn ($1.38bn), beating analyst consensus for €1.17bn, while operating profit came in at €38mn, shy of analyst forecasts for €39mn.
The company expects a slowdown in 2019, forecasting sales growth of about a currency-adjusted 10% and operating profit of between €395mn and €415mn, below average analyst forecasts for €430mn.
A year ago, Puma had forecast a sales increase of 10% but then upgraded its targets over the course of 2018.
Puma’s fourth-quarter sales jumped a currency-adjusted 39% in Asia, shrugging off concerns about cooling demand in China.
They rose 17% in the Americas, helped by Puma’s launch of its first basketball shoe in 20 years in September.
Puma Energy
Puma Energy, the retail and storage arm of commodities trader Trafigura, plans to restructure and sell assets to cut its debt and improve profits, a source familiar with the matter said.
Puma has hired consulting firm McKinsey under new chief executive Emma Fitzgerald who took over last month from Pierre Eladari, who had overseen rapid expansion, the source said.
Although its full-year 2018 results have not been finalised, Puma expects a small net loss or profit, the source added.
Geneva-based Trafigura, which owns about 49% of Puma, has had to put plans to list Puma on hold after a change of government in Angola complicated reducing the country’s stake, coupled with weaker profits and a high debt profile.
Angola’s state oil firm and Cochan Holdings, which is run by a former Angolan general, hold the rest of Puma.
Puma, which traces it roots to Argentina, has more than 3,100 fuel retail stations in Latin America, Africa and Asia-Pacific and last year sold its small Peruvian retail network to Spanish oil and gas group Repsol.
It said in a third quarter investor presentation that it expected a near $200mn drop in earnings before interest, tax, depreciation and amortisation (EBITDA) to $550mn.
Puma’s net profit was around $61mn, down from $128mn the year before, as of Sept.
30 last year, while its current and non-current liabilities were nearly $6.2bn, Trafigura’s annual results showed.
Puma’s net debt by the end of its third quarter last year was just over $1.5bn and its net debt to EBITDA ratio was 2.6, according to Puma’s results.
ConvaTec
Shares of ConvaTec plunged yesterday after the medical devices maker reported “disappointing” annual results and launched a turnaround plan, which would include a $150mn investment over three years to boost sales and profit.
Including the costs related to its transformation plan, Convatec forecast operating profit margin of 18-20% for fiscal 2019, lower than the 23.4% for 2018.
Full-year adjusted operating profit fell 6% to $429.4mn, hurt by lower orders for its infusion devices in the fourth quarter due to Medtronic’s inventory policy change.
The company said that Brexit could impact sales in all European Union countries, its production plants in the EU and the UK and its logistics hub in the Netherlands, but was making plans to stock up to deal with any potential supply disruption.
Lancashire Holdings
Property and casualty insurer Lancashire Holdings Ltd swung to a profit in 2018 from a loss a year earlier, helped by a rise in gross written premiums as it predicted rises in rates across many of its businesses.
The Lloyd’s of London insurer, which writes policies for heavy-duty assets such as oil rigs, ships and aircraft, reported profit before tax of $33.6mn for the year ended December 31, compared with a loss of $72.9mn a year earlier.
Gross written premiums rose 7.9% to $638.5mn for the year, and the company’s combined ratio — a measure of underwriting profitability — improved to 92.2% from 124.9% last year.
A level below 100% indicates an underwriting profit.
The industry faced record losses in 2017 due to the impact of hurricanes Harvey, Irma and Maria and Mexican earthquakes.
Lancashire gave a total estimated net loss figure for 2018 of $164.7mn, versus $181.8mn in 2017.
The underwriter, which offers insurance schemes for heavy-duty assets such as oil rigs, ships and aircraft, said 2018 net losses included $56.1mn in relation to its marine portfolio, hurricane Florence and typhoons Jebi, Mangkhut and Trami.
The fourth quarter of 2018 was impacted by hurricane Michael and the California wildfires.
Its net losses recorded for these events were $48.8mn.
NN Group
NN Group, the largest Dutch insurer, yesterday reported lower-than-expected operating results of €343mn ($387mn) for the three months ended December 31.
That was down from 345mn euros a year earlier and short of the 359mn from ongoing operations expected by analysts polled for Reuters.
Lower results in its asset management business overshadowed improvements at its Dutch and Japanese life insurance operations, the company said.
“In general the asset management industry has seen a difficult year,” CEO Lard Friese told reporters on a conference call.
“In the fourth quarter the good news were the net flows (of funds for investment) were flat, which is good progress,” Friese said.
The company noted that asset management fees were lower.
The company fell to a fourth quarter net loss of €533mn from profit of €700mn reflecting losses on its investment portfolio as well as a €885mn writedown and impairment on the value of the goodwill of Delta Lloyd, the insurer it bought for €2.5bn in May 2017.
Friese said Delta Lloyd’s integration is now largely completed.
NN Group said it had ended the year with a little over €2bn in cash and a Solvency II ratio of 230%. The insurer announced a €500mn buyback program to commence March 1 and a final dividend of €1.24, meaning a dividend for 2018 of €1.90, up 14% from 2017.
Indivior
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Drugmaker Indivior Plc said yesterday its full-year operating profit rose largely due to cost cuts even as it braces for the launch of cheaper copies of its blockbuster drug Suboxone after a long patent battle in US courts.
The company this week lost the latest leg of its battle to delay the launch of generic versions of the film-based opioid addiction drug.
It said operating profit jumped 51% to $292mn in 2018, while net revenue fell 8% to $1.01bn.
Indivior said it expects net revenue of between $50mn and $70mn in 2019 from its long-lasting Sublocade injection.
Jefferies analysts said the guidance was ahead of their estimates.
Indivior said it would not be able to forecast revenue and net income for 2019, given uncertainties around how the US market for both Suboxone and generic alternatives will ultimately develop.
Credit Agricole
French bank Credit Agricole booked a higher than expected net profit in the fourth quarter of last year and met its profit goals set for 2019 a year ahead of target.
Credit Agricole’s stronger than expected performance contrasted with its two French rivals BNP Paribas and Societe Generale which both lowered their targets after adverse markets hit their bottom lines in late 2018.
The bank’s fourth quarter net profit more than doubled to €1bn ($1.13bn) up from 387mn euros in the same period a year earlier, when it had to book almost 400mn in charges related to exceptional taxes.
Analysts polled by Infront Data expected a 795mn profit during the quarter.
Credit Agricole surpassed targets set three years ago for 2019 on profitability and revenue growth.
The bank’s revenue grew by an average 4.3% a year in 2016-2018, while return on tangible equity rose to 12.7%. The bank will issue new targets for the period 2019-2022 in June.
Credit Agricole raised its dividend by 9.5% to 0.69 euro per share, while rivals had either kept it unchanged or offered to pay part of it in shares to protect cash.
Marathon Oil
Marathon Oil Corp beat analysts’ estimates for fourth-quarter profit on Wednesday, on the back of higher production at its US shale assets and said it expects oil output to grow 10% in 2019.
The company has been looking to divest its North Sea assets and focus on the rising shale oil production in the United States.
The US recently surpassed Saudi Arabia and Russia to become the world’s top crude producer.
Houston-based Marathon said production from the Bakken shale jumped 37% to 94,000 barrels of oil equivalent per day (boe/d). North Dakota’s Bakken is the country’s third-largest shale oil field and extracting crude there is cheaper than the top Permian, making it an attractive bet for oil producers.
For 2019, Marathon forecast total production between 410,000 boe/d and 430,000 boe/d, with US production of 320,000 boe/d to 330,000 boe/d.
However, a nearly 30% drop in oil prices from October highs on the back of oversupply concerns has led to producers cutting back on capital expenditure.
Marathon expects to spend $2.6bn in 2019, down nearly 6% from last year.
The company’s net income was $390mn, or 47 cents per share, in the fourth quarter ended December 31, compared to a loss of $28mn, or 3 cents per share, a year earlier.
On an adjusted basis, the company earned 15 cents per share, beating analysts’ estimates of 14 cents per share, according to IBES data from Refinitiv.
In the reported quarter, US production rose to 306,000 boe/d from 262,000 boe/d.
AIG
American International Group Inc on Wednesday reported a quarterly loss as the insurer was hit with catastrophe losses and made a lower return on investments in a volatile market.
Excluding realised investment gains and losses and some other items, AIG posted a loss of $559mn, or 63 cents per share, for the fourth-quarter ended December 31, compared with income of $526mn, or 57 cents per share, in the year-ago quarter.
On that basis, Wall Street analysts expected income of 42 cents per share, according to IBES data from Refinitiv.
AIG shares fell 3% to $42.80 in after hours trading.
The company’s general insurance unit reported an underwriting loss of $1.1bn, compared with a loss of $846mn a year ago, largely due to Hurricane Michael and the California wildfires.
Still, AIG said its general insurance accident year combined ratio — which excludes changes from losses incurred in past years — was 98.8 for the quarter, compared with 102 a year ago.
A ratio below 100% means the insurer earns more in premiums than it pays out in claims.
The accident year ratio is a measurement that AIG chief executive Brian Duperreault has cited as the best gauge of the unit’s long-term profitability.
The number excludes catastrophe claims and reserve charges.
Duperreault, who took the helm at AIG in May 2017, has pledged to turn the company around.
His most critical task is a return to profitable underwriting, something that AIG, one of the largest US insurers, has not achieved since 2007.
The combined ratio in AIG’s commercial insurance unit, which includes losses for catastrophes, was 115 compared to 113 in the year ago quarter.
Cisco Systems
Cisco Systems Inc reported second-quarter revenue and profit above Wall Street estimates on Wednesday, as the network gear maker benefited from strong growth in its newer businesses such as application software and cyber security.
Cisco pivoted to software and cyber security to offset slowing demand for its routers and switches as companies increasingly shift to cloud services offered by Amazon.com Inc, Microsoft Corp and Alphabet Inc instead of building their own networks.
The company also forecast third-quarter profit of 76 cents to 78 cents per share, the mid-point of which was in line with analysts’ estimates.
Revenue in its application software business rose 24% to $1.47bn, beating estimates of $1.35bn.
Sales in its security business, which offers firewall protection and breach detection systems, rose 18% to $658mn, above estimates of $628.9mn.
Sales in its infrastructure platform business, which includes the company’s traditional business of supplying switches and routers, rose 6% to $7.13bn.
Analysts had expected revenue of $7.05bn, according to IBES data from Refinitiv.
The company reported net income of $2.8bn, or 63 cents per share, in its quarter ended January 26, compared with a loss of $8.78bn, or $1.78 per share, a year earlier, when it took a charge of $11.1bn related to the new US tax laws.
Total revenue rose 4.7% to $12.45bn.
Analysts on average had expected revenue of $12.41bn.
On an adjusted basis, the company earned 73 cents per share, beating estimates of 72 cents per share.
Commerzbank
Germany’s second-biggest lender Commerzbank said yesterday its profits jumped in 2018, with growth in its client base and ebbing restructuring costs opening the way for a first dividend payout in two years.
Now halfway through a four-year cost-cutting programme launched in late 2016, the group nevertheless had to trim a key profitability objective and fend off questions about pressure from Berlin for it to merge with larger rival Deutsche Bank.
Net profit at Commerzbank was seven times larger than in 2017, at €865mn — slightly short of forecasts from analysts surveyed by Factset.
The fatter bottom line only lifted its return on capital employed (ROCE) — a key measure of banks’ profitability — from 0.6% in 2017 to 3.1% last year, well short of its 2020 target of above 6%. That goal would have to be revised down to “between five and 6%,” finance director Stephan Engels acknowledged at a Frankfurt press conference.
Commerzbank had bet on interest rates rising in the 19-nation eurozone once the European Central Bank ended crisis-fighting stimulus measures.
“That hasn’t happened” as policymakers plan to keep rates at historic lows at least until late 2019, meaning “the pressure on profit margins has further increased,” chief executive Martin Zielke said.
On the operational level, Commerzbank was able to lift underlying profits 8% in 2018 to €1.2bn, although revenues fell 2%, to €8.6bn.
Commerzbank plans to pay out a dividend of 20 cents per share for 2018 after a two-year freeze — with a major beneficiary the German state, which still owns a 15.6% stake dating back to a crisis-era rescue. The lender added that it also plans a dividend payout for this year.