South African & US Earnings

With March approaching, we see the final US Earnings trickling in with one of Buffett’s darlings, Occidental Petroleum Corporation posting results this week.  As South African Earnings Releases kick off, one of South Africa’s favorite retail companies, Woolworths Holdings Limited (JSE: WHL) is in the spotlight. The famed food retailer will release their half-year results on 1 March 2023. Moreover, market participants will also wait to see how the FirstRand Group has performed recently, with the financial services giant releasing their half-year results on 2 March.

Update 6 March 2023

Reviewing the past week of earnings results, we focus on Warren Buffett’s Berkshire Hathaway (NYSE: BRK.B) and take a quick look at the results for South African retail giant Woolworths Holdings Limited (JSE: WHL). We also take note of the upcoming Non-Farm Payroll (NFP) data report, which will be released on Friday, 10 March 2023.Berkshire Hathaway (NYSE: BRK.B).

Long-time business partner, Charlie Munger, saw Berkshire Hathaway deliver a rather disappointing set of financial results for the 2022 financial year as inflation and persistent rate hikes suppressed business performance amidst a tumultuous macro environment. Berkshire Hathaway saw investment and derivative gains plunge 186% to a loss of $53,612 million in 2022 from a profit of $62,340 million in 2021. The tumultuous 2022 financial year saw Class B net earnings per share (EPS) decline 126% year-over-year. Moreover, in Warren Buffett’s annual letter to investors, the famous value investor emphasised his defence over stock repurchase programs, with stock repurchases amounting to approximately $2.6 billion during the fourth quarter of 2022. Annual stock repurchases amounted to $7.9 billion in 2022, down from the record spend of $27 billion in 2021.

Woolworths Holdings Limited (JSE: WHL)

Famous South African multinational retail company, Woolworths Holdings Limited (JSE: WHL), reported record-high interim results for the half-year that ended 25 December 2022. However, the group has warned investors of slower growth as the country’s ongoing energy crisis worsens. Woolies reported a 75% year-over-year surge in half-year earnings per share (EPS), while same-
period turnover and concession sales increased 18.5% year-over-year to R49.9 billion. Despite superior earnings results, the food retailer struggles to grapple with “crippling power outages,” stating that the country’s energy crisis has “reduced its domestic adjusted operating profit by an estimated R15 million per month.” Shareholders would have been pleased to see a 97% year-over-year increase in interim dividends per share (DPS). However, Woolies’ share price dipped more than 9% since the beginning of the week as market participants began to price in an expected growth slowdown amidst South Africa’s ongoing power crisis. 
Friday’s Non-Farm Payroll (NFP) Data Report With market participants heading into March, all eyes turn to February’s Non-Farm Payroll (NFP) data report, which will be released on Friday, 10 March. With a much higher-than-expected 517 000 jobs added to the U.S. economy in January 2023, the annual U.S. CPI figure for January came in slightly above expectations at 6.4%. Market participants will eagerly await the release of February’s NFP report to gauge how the FED will evolve its stance against fighting inflation.

Sources: Bloomberg, CNBC, Reuters, Refinitiv, Trading View

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