Nvidia (NVDA)
Nvidia is set to release its latest financial results after Wall Street closes today, and stakes are high thanks to its share price more than tripling last year amid AI enthusiasm.
The chip maker, which dominates the market for data center AI chips, is expected to announce sales revenues of around $20bn (£15.86bn) in the fourth quarter and earnings per share of $4.60. This compares to just around $6bn in sales a year ago, and EPS of just 88 cents.
A miss in earnings or lower forward guidance is likely to cause a wave of profit taking in the technology sector and also drag the broader market. But a stronger than expected report could add to the upward momentum and draw in more investors who are already experiencing some degree of FOMO.
Neil Wilson, chief market analyst for Finalto, said: “Signs of tension were evident yesterday as NVDA dropped more than 4% and dragged the rest of the market south.
“At 30x earnings there is little room above and the market is a tad worried about a 50% YTD gain unravelling on earnings – profit taking I guess you would call it. I still think there is a material chance that 2025 estimates are revised higher though.”
HSBC (HSBA.L)
HSBC fell out of favour with investors on Wednesday despite it revealing a near 80% jump in pre-tax profits which rose to $30.35bn (£24bn) in 2023, driven by high interest rates.
Shares slumped more than 7% as Europe’s largest bank missed forecasts due to a $3bn (£2.3bn) impairment from its stake in a Chinese bank, the Bank of Communications.
The bank’s 2023 pre-tax profit jumped 78% to $30.35bn, while net profit rose 56% to $22.43bn. The steep rise in full-year earnings prompted the bank to announce fresh share buybacks of up to $2bn.
The London-headquartered bank also announced a fourth interim dividend of $0.31 per share, resulting in a total for 2023 of $0.61 per share.
“Our record profit performance in 2023 enabled us to reward our shareholders with our highest full-year dividend since 2008, three share buy-backs last year totalling $7bn, and a further share buy-back of up to” $2bn, group chief executive Noel Quinn said.
In addition to three share buybacks totalling $7bn, Quinn said the bank returned $19bn to shareholders last year.
Read more: HSBC full-year profits surge fuelled by high interest rates
Glencore (GLEN.L)
Glencore slipped into the red in London as the miner revealed that lower commodity prices halved its earnings last year.
Shares dropped to their lowest level in a year after underlying profits fell 50% to $17.1bn (£13.5bn), although it was still one of the company’s best ever performances.
It saw profits surge in the wake of Russia’s invasion of Ukraine in 2022 as an energy crisis hit Europe.
Glencore lowered its dividend to $1.6bn and for the first time in several years did not announced a new share buyback program.
It also slashed its dividend to investors, as it aims to fund the acquisition of a 77% stake in Teck Resources’ metallurgical coal business.
Read more: FTSE 100 LIVE: European stocks head lower as UK posts largest January budget surplus
“Although the current macroeconomic environment remains challenging, global economic growth is forecast to bottom out in 2024,” chief executive officer Gary Nagle said.
“Expected interest rate cuts and corresponding restocking along the supply chain are likely to bring an improvement in demand conditions in western markets later in the year.”
The company also recorded $2.5bn of writedowns at year-end, including $762m on its Mutanda copper and cobalt mine in the Democratic Republic of Congo.
BAE Systems (BA.L)
BAE Systems has predicted slower earnings growth in 2024 after a 14% jump last year, when the defence company’s order backlog swelled to a record level. This was driven by new submarine contracts and demand amid the Ukraine war.
Underlying earnings per share for the current year are expected to rise 6% to 8% compared to the better-than-expected 14% increase to 63.2 pence it reported for 2023.
The British weapons maker added that it won contracts worth £38bn last year, including deals related to the next generation of the UK’s nuclear deterrent submarines, the Aukus defence pact and combat vehicles being bought by central and eastern European countries.
Charles Woodburn, chief executive, said: “While most of our order volume was driven by existing programme positions that pre-date the Ukraine conflict, orders to restock and upgrade heavy armour and munitions are starting to come through,”
BAE is forecasting sales growth of 10-12% this year, above the 9% recorded last year, and increased its annual dividend by 11%.
However, shares tumbled as much as 3% on the day.
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