Before the bell: mixed corporate results

Mixed start to earnings season, American Express fails to impress, and activist Starboard Value strikes again.

The Bel20 index rose by 0.7% last week, while the Euro Stoxx 50 lost 0.4% over the same period. The biggest blow within the European index was, of course, to Dutch company ASML. The chip fabrication machine manufacturer saw its stock drop nearly 14% over the week. However, on Friday, shareholders were able to breathe a little, as the stock rebounded by almost 5%. Across the Atlantic, the initial corporate results were also mixed. United Continental Holdings (+19%) exceeded expectations, and the company behind United Airlines launched a $1.5 billion stock buyback program. Streaming service Netflix saw its stock jump 11% on Friday after publishing impressive figures. On the downside, companies in the U.S. healthcare sector were under pressure. The two largest healthcare companies in the country, UnitedHealth Group (-4.9%) and CVS Health (-9.8%), both lost significant ground.

In Asia, markets are down this morning. In Tokyo, the Topix is down 0.2%, and in Hong Kong, the Hang Seng Index has lost 1.3%. In China, the benchmark interest rate was lowered by 25 basis points this morning. Today, after the market closes in Belgium, we’ll get an update from Econocom, and Vastned Belgium will issue an interim report on the third quarter. In Germany, software company SAP will report its earnings, Sandvik will release its results in Sweden, and in the U.S., steel company Nucor will publish its figures after the market closes.

More, but not enough

American Express reported third-quarter revenue of $16.6 billion, an 8% increase compared to the same period last year, but it wasn’t enough to beat analysts’ expectations. However, net income did surpass expectations, rising by 2% to $2.5 billion. Transaction volumes also grew by 6% to $387 billion. As a result, the financial services provider has raised its full-year outlook and now forecasts earnings per share of $13.75 to $14.05, up from the previous estimate of $13.30 to $13.80. Despite this, investors had higher hopes for AmEx, and the stock fell by 3.2%.

Not so fresh start

Activist investor Starboard Value is said to have taken a significant position in Kenvue. The maker of the well-known mouthwash brand Listerine was spun off from Johnson & Johnson last year and has lost 18% of its market value since going public, performing much worse than the average U.S. stock. However, since August, the stock has made a recovery, rising by 13.5%. Starboard Value is likely planning to revamp the company’s brands and pricing. Earlier this month, it was revealed that the activist investor had invested $1 billion in pharmaceutical giant Pfizer. On Tuesday, the CEO will explain these new investments at the 13D Monitor event for active and passive investors.

Did you know…

that around 40 countries are currently experiencing or are on the brink of a debt crisis? According to the International Monetary Fund, global government debt will reach $100 trillion by the end of this year.

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