Before the bell: More Fun with Beer

The red phone rings again—could the conflict in Ukraine be nearing its end? Brewers lead the way, and KBC reports a strong 2024.

The average European stock rose 0.3% yesterday, with brewers AB InBev (+2.9%) and Carlsberg (+3.2%) climbing higher after Heineken delivered better-than-expected earnings. Adding to the optimism, the Dutch beer giant announced a 1.5 billion euro share buyback program. Meanwhile, U.S. inflation for January came in at 3%, higher than economists had forecast. Core inflation, which excludes food and energy prices, also rose to 3.3%, surpassing the expected 3.1%. Persistent inflation in the U.S. is making investors increasingly doubtful about the likelihood of an interest rate cut. The S&P 500 fell 0.3%, while the Nasdaq remained unchanged. Elsewhere, Kraft Heinz’s earnings left a bad taste—its stock dropped 3.3% after reporting a year-over-year decline in quarterly sales of more than 4%. On the other hand, CVS Health soared 15% as it exceeded Wall Street’s expectations, with new CEO David Joyner seemingly steering the company back to good health. Overnight, the infamous “red phone” was used once again. A conversation between Trump and Putin has fueled hopes that the conflict in Ukraine may come to an end soon. We expect European markets to open on a positive note.

This morning, Asian markets are already in the green. Tokyo’s Topix is up 1.3%, while Hong Kong’s Hang Seng Index has gained 2.6%. In Belgium, earnings reports are due from Econocom, Home Invest Belgium, and Nextensa. In Germany, Commerzbank is releasing its annual results, while the Netherlands will see updates from high-frequency trader Flow Traders and fintech firm Adyen. In the U.S., John Deere, Airbnb, and cybersecurity company Palo Alto Networks are set to report.

A Strong Network is Worth a Lot

U.S. tech company Cisco reported quarterly revenue of 14 billion dollars, a 9% increase from a year earlier. Earnings per share came in at 0.94 dollars, both exceeding analyst expectations. The company also raised its full-year outlook, now forecasting revenue of 56 billion dollars, up from the previous estimate of 55 billion dollars. Investors responded positively, sending the stock 6.6% higher in after-hours trading. According to CEO Chuck Robbins, Cisco is well-positioned to benefit from the growing demand for AI, as companies look to expand their network infrastructure.

KBC Delivers Strong Results

Belgian bank-insurer KBC posted a net profit of 3.42 billion euros for 2024, in line with its 2023 performance. Earnings per share rose by 4% to 8.33 euros, largely thanks to the company’s share buyback program. KBC will distribute a final dividend of 3.14 euros per share, bringing the total dividend for 2024 to 4.85 euros per share. Looking ahead to 2025, KBC aims for top-line growth of 5.5%, while expecting costs to increase by just 2.5%.

Did You Know …

that the term “red phone” originated in 1963 as a way to describe communication between the Soviet Union and the United States? While Moscow and Washington still maintain a direct line of communication, there was never actually a physical red phone involved.

This article was translated from Dutch and was originally published on Spaarvarkens.be.