HSBC has posted a 14% drop in profits for Q1 of 2016 following “extreme levels of volatility” in financial markets at the start of the year.
The banking giant’s profit before tax came in at $6.1 billion for Q1, down from $7.1 billion a year ago.
However, analysts had expected a far steeper fall in profits.
HSBC CEO Stuart Gulliver said the bank had been “resilient in tough market conditions”.
Adjusted pre-tax profits, including currency effects and one-off items, fell 18% to $5.4 billion.
HSBC cut almost a thousand jobs worldwide in Q1, leaving it with 254,212 full-time staff across 71 countries and territories.
Stuart Gulliver said HSBC was confident of hitting its $5 billion cost-cutting target by the end of 2017.
HSBC’s adjusted revenue for Q1 amounted to $13.9 billion, a 4% drop from the same time last year.
The bank also said the development of its Asian business was gaining momentum, “despite a challenging environment with key increases in market share in debt capital markets, China M&A and syndicated lending”.
Ahead of the results, analysts had warned HSBC might signal an end to its highly-valued progressive dividend, which delivers ever-increasing payouts.
However, HSBC maintained the progressive target and left its dividend unchanged from the same period last year at $0.10.
HSBC also announced that the $5.2 billion sale of its Brazil unit to banking giant Banco Bradesco received preliminary approval from competition regulators.
Australia’s largest independent oil and gas company, Woodside Petroleum, has posted a 99% fall in profits for 2015.
Woodside Petroleum put the dramatic decline in profits down to the global fall in oil prices. In 2015, Brent crude prices fell more than 45%.
The company’s net income came to $26 million from $2.41 billion a year earlier.
However, Woodside CEO Peter Coleman said it would be able to withstand the current oil price landscape.
“Woodside, with its low cost of production, is well positioned to withstand this commodity cycle,” he said.
“A strong performance from our operating assets, disciplined financial management and productivity gains reflect our ongoing commitment to delivering value for our shareholders.”
Peter Coleman added that Woodside had maintained strong levels of liquidity and low levels of committed capital expenditure.
Woodside’s Sydney-listed shares finished the day down 7% on the profit report. Over the last 12 months, the company’s shares have shed close to 22%.
The company has a long history of liquefied natural gas (LNG) operations and concentrates much of its domestic production in Western Australia.
Its exploration operations span the Asia Pacific region, Sub-Saharan Africa, the Atlantic margins and Latin America.
Woodside has a Singapore office that supports its trade and shipping activities as well as interests in Canada and Timor-Leste.
HSBC has reported a 17% drop in profit to $18.7 billion for 2014.
The bank has said 2014 was a “challenging year” and blamed the negative effect of fines and settlements and UK customer redress for the sharp drop.
The results follow allegations, which emerged earlier this month, that HSBC had helped people evade UK tax using hidden HSBC accounts in Geneva.
HSBC CEO Stuart Gulliver saw his overall pay for the year fall to £7.6 million ($11.7 million) from £8.03 million ($12.3 million) in 2013.
On Monday, HSBC reiterated its recent apology for the conduct of its Swiss private bank, saying the historical practices and behavior were “unacceptable”.
“We deeply regret and apologize for the conduct and compliance failures highlighted, which were in contravention of our own policies, as well as expectations of us,” it said.
HSBC said restoration of trust in the industry “remains a significant challenge as further misdeeds are uncovered but it is a challenge we must meet successfully”.
“When commentators extrapolate instances of control failure or individual misconduct to question the culture of the firm, it strikes painfully at the heart of our identity,” it added.
The revelations come after Stuart Gulliver himself was dragged into the Swiss tax furor on February 22, with HSBC confirming he uses a Swiss bank account to hold his bonuses.
HSBC said he opened the account in 1998 when he was living and working in Hong Kong and full tax was paid in Hong Kong on the bonus payments.
Facebook has reported revenues of $3.2 billion in Q3 2014, comfortably ahead of analysts’ forecasts and 59% higher than the same period last year.
The social network also reported an $806 million profit, a 90% increase on the same quarter a year ago.
The increased profits were driven by another formidable three months for Facebook’s advertising business.
Ad revenues for July to September were sharply higher than a year ago.
Perhaps most telling as an indicator of its future profitability was Facebook’s performance in mobile advertising.
Mobile ads now make up 66% of its total advertising revenue.
Facebook has reported revenues of $3.2 billion in Q3 2014
A year ago they accounted for less than half of it, and at the time of its stock market debut in 2012 Facebook’s mobile ads barely brought in any money at all.
Just as important to social networks as their earnings, are their user numbers, which in Facebook’s case were also better than many expected.
As of the end of September, Facebook had 1.35 billion active users every month, 14% more than in 2013.
And the number of people checking their Facebook page at least once a day jumped 19% to 864 million.
“This has been a good quarter with strong results,” said Mark Zuckerberg, Facebook founder and chief executive.
Nevertheless investors seemed disappointed that Facebook hadn’t beaten Wall Street analysts’ forecasts by an even greater margin.
Facebook shares fell as much as 8% in after-hours trading in New York.
Ford profits dropped in Q3 2014, largely due to the cost of developing its new F-150 pickup truck.
Net profit for the period was $835 million, down by a third from a year earlier. Revenue was up slightly at $35.8 billion.
Ford said it invested “heavily” in new products and closed its Dearborn truck plant for five weeks to replace machinery to make the F-150.
The new truck is scheduled to go on sale later this year.
Ford profits dropped in Q3 2014, largely due to the cost of developing its new F-150 pickup truck
“During the third quarter, we continued to introduce an unprecedented number of new vehicles and invest heavily in the new products and technologies that will deliver strong profitable growth beginning next year,” said Ford CEO Mark Fields.
The carmaker had warned that profits this year would be under pressure from new model launches, including the new Mustang, and the cost of building new plants in Asia.
In the first nine months of this year, Ford made a net profit of $3.1 billion.
For 2015, Ford forecasts “significantly higher” profits of between $8.5 billion and $9.5 billion, excluding one-off items.
Microsoft has reported a decline in its profits as a result of costs related to job cuts and its purchase of Nokia’s smartphone business earlier this year.
However, the tech giant reported higher-than-expected quarterly revenue, helped by stronger sales of its phones, Surface tablets and cloud-computing products for companies, while keeping its profit margins largely intact.
Microsoft made $4.5 billion in Q3 2014, 13% lower than the same time last year.
“Integrations and restructuring expenses” cost $1.1 billion, Microsoft said.
However, the new Nokia business also boosted revenues. They climbed 25% to $23.2 billion, beating expectations and sending shares higher in after-hours trading.
In July Microsoft announced plans to cut 18,000 jobs, including 12,500 in the Nokia unit it bought in April.
On October 22 Microsoft said it would no longer use the Nokia name, selling future Lumia smartphone models as Microsoft-branded phones.
Microsoft made $4.5 billion in Q3 2014, 13 percent lower than the same time last year
Microsoft CEO Satya Nadella said the company was being “positioned for future growth”.
“Our teams are delivering on our core focus of reinventing productivity and creating platforms that empower every individual and organization,” he said in a statement accompanying earnings.
Microsoft makes most of its money selling software to companies. The results show a strong growth in its business selling cloud computing to companies – an area Satya Nadella has cited as important for the future of Microsoft.
The business has continued to place great importance on its consumer products like the Xbox games console, its Surface range of tablet computers, and smartphones.
Stronger sales of phones and tablets helped boost revenues, with total consumer revenue up 47%.
Microsoft shares, which have climbed 33% over the past year, rose another 3% in after-hours trading to $46.36.
McDonald’s and Coca-Cola have posted sharply lower profits for Q3 2014.
McDonald’s saw earnings fall 30%, while Coca-Cola’s fell 14%, with both citing lower US sales as key reasons.
The fast-food chain’s profits of $1.07 billion were also hit by a food scandal in China, contributing to a 4.6% fall in revenues to $6.99 billion.
Meanwhile, the world’s largest drinks group made a $2.1 billion profit on revenues that were broadly flat at $11.9 billion.
McDonald’s US sales have been under pressure as consumers switch to other chains, notably the fast-growing Chipotle Mexican Grill.
McDonald’s and Coca-Cola have posted sharply lower profits for Q3 2014
Sales also fell in Russia, Germany and especially in China, where McDonald’s was hurt by a scandal over meat supplies.
McDonald’s CEO Don Thompson admitted that the trading performance was not good enough: “McDonald’s third-quarter results reflect a significant decline versus a year ago.
“By all measures, our performance fell short of our expectations.”
Meanwhile, Coca Cola said that its US sales were down 1% during the quarter. Consumers are increasingly turning to alternatives to sweet, fizzy drinks. The company’s profits also suffered because of currency fluctuations and strengthening of the dollar.
In August, Coca-Cola spent $2.15 billion for a 16.7% stake in Monster Beverage energy drinks business.
As part of the deal, Coca-Cola transferred ownership of its own, less successful energy drinks, including brands NOS, Full Throttle and Burn, to Monster.
Morgan Stanley has reported an 87% jump in profits to $1.65 billion in Q3 2014.
Trading of currencies, commodities and bonds was a big driver of profits, as was wealth management – advising high earners on their finances.
On October 16, rival bank Goldman Sachs reported a 50% rise in profits.
Banks’ bond trading activities have reportedly benefitted from problems at bond giant Pimco.
Morgan Stanley has reported an 87 percent jump in profits to $1.65 billion in Q3 2014
In September, trading superstar Bill Gross made a surprise exit from the world’s biggest bond company.
The departure of Bill Gross from Pimco reportedly prompted investors to withdraw billions of dollars from the company, money which has found its way to other trading businesses.
Morgan Stanley’s total revenue for the quarter rose 12% to $8.91 billion.
Bond trading revenues were up 19.4% to $997 million. Wealth management revenue rose 9% to $3.79 billion.
“We are well positioned to create superior returns for our shareholders, particularly as the US economy continues to strengthen,” Morgan Stanley’s chief executive and chairman James P. Gorman said in a statement.
Goldman Sachs has reported a 50% jump in profit in Q3 2014 after a sudden jolt in bond market activity helped boost revenues.
The investment bank reported net income rose to $2.14 billion in the three months to the end of September.
That compared with $1.43 billion for the same period a year earlier.
Revenue from bond-trading leapt 74% to $2.17 billion, as Goldman benefited from the surprise exit of bond market supremo, Bill Gross, from Pimco.
The departure of Bill Gross from Pimco, the world’s largest bond fund, prompted investors to withdraw $23.5 billion from the company.
Goldman Sachs has reported a 50 percent jump in profit in Q3 2014 after a sudden jolt in bond market activity helped boost revenues
Strong US economic data in September and stimulus measures introduced by the European Central Bank (ECB), also helped jolt what had been a lacklustre bond market into life last month.
Total net revenue at the bank rose 25% to $8.39 billion.
“The combination of improving economic conditions in the US and a strong global franchise continued to drive client activity across our diverse set of businesses,” Goldman’s chairman and chief executive Lloyd Blankfein said in a statement.
Goldman Sachs has also been a big beneficiary of rising stock markets this year, helped by its advisory work on large deals including the $25 billion initial public offering of Chinese tech firm Alibaba on the US stock market.
Revenue from investment management, a business Goldman has been trying to build up, rose 20% to $1.46 billion.
Bank of America has reported a net profit of $168 million in Q3 2014, down from $2.5 billion a year earlier.
Total revenue was $21.4 billion.
The huge drop in profits was due to a previously announced $5.3 billion mortgage-related settlement with the Department of Justice and other federal agencies.
Most areas of the business improved profitability compared with a year ago.
Bank of America has reported a net profit of $168 million in Q3 2014, down from $2.5 billion a year earlier
“We saw solid customer and client activity and improved profitability in most of our businesses relative to the year-ago quarter,” said Bank of America’s chief executive Brian Moynihan.
The bank’s property business posted a loss of $5.2 billion, compared with a loss of $990 million a year earlier.
Profits at the asset management arm rose slightly to $813 million, while those at the global banking division rose by a quarter to $1.4 billion.
The global markets business turned a loss of $875 million to a profit of $769 million.
On October 14, rival JP Morgan reported a profit of $5.6 billion for Q3 2014, while Citigroup posted a $3.4 billion profit.
JP Morgan Chase has reported a $5.6 billion profit for Q3 2014.
The quarterly results represent a marked improvement on a year earlier, when the bank made a $380 million loss.
This was the result of setting aside billions of dollars to settle charges relating to the sale of mortgage-related investment products.
Separately, rival Citigroup posted profits of $3.44 billion and said it would exit consumer banking in 11 markets.
JP Morgan and Citigroup are the first major US banks to report third-quarter results.
Other big US banks will post their results later this week.
The JP Morgan results were due to be published at 08:30 local time, but were posted early.
JP Morgan Chase has reported a $5.6 billion profit for Q3 2014
They showed total revenue for the quarter of $25.2 billion, up 5% on a year earlier. Revenue at the investment banking business fell by $600 million, with profits down by 34%.
Revenue at the asset management arm grew by $250 million to $3 billion, with profits up 20%.
“Our businesses continue to perform well,” said chief executive Jamie Dimon.
“While challenges remain in the global economic recovery, the US economy is an exception, showing signs of steady improvement.
“Corporate America is in good shape, with strong balance sheets, and employment trends continue to be positive.”
Citigroup saw its profits rise 7% to $3.44bn on revenues of $19.6 billion.
The bank also said it would accelerate plans to focus on markets “where it has the greatest scale and growth potential”.
As a result, it said it would be exiting consumer banking in 11 markets – Costa Rica, Czech Republic, Egypt, El Salvador, Guam, Guatemala, Hungary, Japan, Nicaragua, Panama and Peru, as well as its consumer finance business in South Korea.
“Our consumer bank and institutional business each had solid performance during the quarter and generated stronger revenues both sequentially and year-on-year,” said the bank’s chief executive Michael Corbat.
“I am committed to simplifying our company and allocating our finite resources to where we can generate the best returns for our shareholders.”
Meanwhile, smaller rival Wells Fargo reported a $5.7 billion profit for the third quarter, up 1.7% on the same period last year.
Twitter reported a loss of $145 million during Q2 2014.
That is more than triple the loss Twitter reported during the same period a year ago.
The social networking service said it had 271 million monthly users – up 24% from a year ago – allaying investor fears that the service is not growing fast enough.
Shares in the company soared over 35% in after-hours trading.
Twitter reported a loss of $145 million during Q2 2014
“Our strong financial and operating results for the second quarter show the continued momentum of our business,” said Twitter CEO Dick Costolo in a statement, noting the company’s strong user figures during the World Cup.
However, in an interview with CNBC, Dick Costolo said that it was not just the World Cup that drove user growth, in an effort to allay fears that the company would not be able to keep the users it gained during the sporting event.
Twitter said it added 16 million new users during the March to June period – 13 million internationally and 3 million in the US.
Advertising revenue grew 129% from the same period a year earlier to $277 million. Crucially for investors worried about shifting user habits, a majority of that advertising revenue came from mobile advertising.
Twitter said more than 78% of its users access the service on their mobile devices.
Ryanair has raised its annual profit forecast after seeing net income more than double for the Q2 2014.
Second quarter profit rose to 197 million euros ($266 million) compared to 78 million euros a year earlier, the budget airline company said.
Ryanair has raised its annual profit forecast after seeing net income more than double for the Q2 2014 (photo Wikipedia)
Chief financial officer Howard Millar said: “We’ve made a lot of service improvements over the last six or seven months and we’re seeing the benefits.”
The rise comes after profit warnings by rivals Air France-KLM and Lufthansa.
Ryanair, which is Europe’s biggest budget airline, began promoting a more customer-friendly image late last year.
The airline raised its profit forecast for the year to March 2015 to a range of between 620 million euros to 650 million euros, up from a previous estimated range of 580 million euros to 620 million euros.
Ryanair has also said that it plans to aggressively raise capacity this winter by 8% and build its business-friendly routes.
Boeing has reported high profits from April to June 2014 boosted by “strong” commercial aircraft sales.
Boeing’s net profits rose 52% to $1.65 billion from the same period last year.
During a quarter which saw the company deliver its first Dreamliner 787-9 aircraft, Boeing’s earnings from commercial aircraft operations helped to offset a fall in defense profits.
Separately, Delta Air Lines reported a 17% rise in profits thanks in part to higher fares.
Earnings from Boeing’s defense, space and security business fell 25% to $582 million, but profits from commercial aircraft rose 7% to around $1.6 billion.
Boeing boosted its full-year earnings forecast to between $7.90 and $8.10 per share, up from its previous forecast of $7.15 to $7.35 per share.
“Overall, our strong first-half financial performance, sustained focus on growth and productivity, and positive market outlook support our increased earnings guidance for the year,” said Boeing CEO Jim McNerney.
Boeing’s earnings from commercial aircraft operations helped to offset a fall in defense profits
Boeing expects higher full-year profits in part due to second-quarter tax settlements totaling $408 million.
The company said commercial aircraft deliveries rose 7% to 181 in the three month period. The total included 30 Dreamliner jets.
Boeing grounded a number of aircraft last year, including the Dreamliner fleet, following two incidents where batteries caught fire.
The aircraft maker said it had a total order book worth $440 billion, with more than 5,200 orders for commercial aeroplanes.
“With 783 new commercial airplane orders to date this year and significant contracts in the quarter for military aircraft and satellites, our backlog remains large and diverse,” Jim McNerney said.
Meanwhile, US carrier Delta Air Lines announced second quarter earnings rose 17%, to $801 million from a year ago.
Passengers flew more miles, at higher average fares, and fuel spending declined, the company said. Delta’s average fuel price was $2.93 per gallon in the quarter. The company owns its own refinery in Philadelphia.
The results from Delta come before American and United post second quarter figures on Thursday. Analysts expect the biggest US carriers to report large profits.
Microsoft has reported a 7% fall in profit during Q2 2014.
The tech giant said profit during the March to June period was $4.6 billion, compared with $4.97 billion during the same period last year.
Microsoft said its Nokia division, which it acquired in April, lost $692 million.
Microsoft said its Nokia division lost $692 million
Last week, Microsoft announced it would cut 18,000 jobs – the biggest round of job cuts in the company’s 39-year history.
“We are driving growth with disciplined decisions, bold innovation, and focused execution,” Microsoft CEO Satya Nadella said in a statement.
Satya Nadella said Microsoft is choosing to focus on revenues from the company’s cloud division, which he said were set to double to $4.4 billion this year.
Shares in Microsoft were mostly flat in trading after stock market hours.
Huawei has reported a 19% jump in sales to 135.8 billion yuan ($21.9 billion) for the first six months of the year.
The Chinese telecom equipment maker said it expects to make an operating profit margin of 18.3% for the period.
Huawei has traditionally concentrated on making telecoms network equipment, but has benefited by diversifying into fast-growing sectors such as smartphone manufacturing.
It is now one of the world’s largest smartphone makers.
Cathy Meng, the company’s chief financial officer, said the firm “achieved quality and sustainable growth in our consumer business thanks to the increase of brand awareness and smart devices sales worldwide”.
According to IDC, Huawei shipped 13.7 million smartphones in the first three months of this year – making it the third-biggest smartphone vendor in the world.
Huawei is now one of the world’s largest smartphone makers
Huawei did not give a breakdown of its latest sales numbers.
The company has also been looking to tap into the market for wearable technology and introduced its hybrid Talkband smart device earlier this year.
Furthermore, China’s investment in fourth-generation mobile network technology has led to a steady stream of revenue for the company.
“Driven by increasing investments in LTE networks worldwide, Huawei has further solidified its leadership position in mobile broadband,” Cathy Meng said in the statement.
Huawei’s growth comes despite it coming under scrutiny in key markets in recent years.
In 2012, US politicians claimed that the company posed a security threat because of its alleged links to China’s government and military.
The concerns over its association with the Chinese authorities have been driven in part, by the fact that the company’s founder, Ren Zhengfei, was a former member of the People’s Liberation Army.
However, Huawei has repeatedly denied those claims and has stressed that it is 100%-owned by its employees and founder.
Earlier this year, a report in the New York Times alleged that the National Security Agency (NSA) had infiltrated Huawei’s servers.
In response, China has demanded a clear explanation from the US government.
Wal-Mart has reported a fall in profits due to particularly cold winter weather.
The world’s largest retailer’s net income for the three months to the end of April was $3.58 billion, down 5% on a year ago. Net revenue was up slightly at $115 billion. Both fell short of analysts’ forecasts.
Wal-Mart has reported a fall in profits due to particularly cold winter weather
Wal-Mart shares fell almost 2% in early morning trading.
The retailer also announced a 0.1% rise in like-for-like sales over the period at its UK supermarket business Asda.
Asda said it was reviewing the roles of more than 4,000 managers with a view to creating more roles in store.
Wal-Mart said that like-for-like sales at its own stores were flat during the three month period.
“Like other retailers in the US, the unseasonably cold and disruptive weather negatively impacted US sales and drove operating expenses higher than expected,” said group chief executive Doug McMillon.
“Wal-Mart’s underlying business is solid, and I’m confident in our long-term strategies.”
Wal-Mart forecast higher earnings per share for the current three-month period – $1.15-$1.25 compared to the $1.10 posted during the last quarter.
Wal-Mart – the world’s largest retailer – has reported a 22% drop in quarterly profit and given a weaker-than-expected earnings forecast for the coming year.
Net income for Q1 2014 fell to $4.4 billion from $5.6 billion a year earlier.
Wal-Mart said tough winter weather, cuts to government benefits and higher taxes contributed to the fall.
The retailer said reduced food-stamp benefits had been partly behind its lower profits, along with competition from heavy discounting during the holiday season.
Its total revenue for the quarter rose by 1.4% to $129.7 billion.
Wal-Mart’s net income for Q1 2014 fell to $4.4 billion from $5.6 billion a year earlier
Wal-Mart said it expected net sales this year would grow at the lower end of its earlier forecast of 3%-5%.
Its earnings forecasts for this year also fell short of analysts’ forecasts.
Wal-Mart expects profits to be between $5.10 and $5.45 per share, against expectations of about $5.54.
Chief executive Doug McMillon said he would “innovate to improve productivity” to keep prices low.
He added: “We will invest aggressively in e-commerce and increase our small store rollout in the US, as we have done in several other countries, to deliver value and convenience.”
Wal-Mart would keep focusing on providing “supercentres” and smaller stores closer to customers’ homes, he said.
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