Weekly Earnings Outlook

Stellar earnings across the US Tech sector have sparked renewed vigour for risk; despite a difficult macroeconomic environment, some major global indices push higher. This week is no different, earnings are still pushing forward, and the US FOMC is meeting to deliver another blow to the consumer on Wednesday. Some interesting companies are set to release their report cards on the local front, like Anheuser-Busch InBev SA, Impala, Goldfields and Combined Motor Holdings Ltd. 

Update 8 May 2023

Inflationary Pressures Fail to Dampen Ab InBev’s Q1 Performance

Get the latest on the Federal Reserve’s interest rate hike, Pfizer’s Q1 earnings, and Anheuser-Busch InBev’s first-quarter results. The Fed raised interest rates by 25 basis points, signaling that it may not increase them any further. Meanwhile, Pfizer exceeded analysts’ expectations despite lower demand for its Covid-19 vaccine, and Anheuser-Busch InBev saw a significant increase in core profit despite minimal sales volume growth.

At its May meeting, the Federal Reserve raised interest rates by 25 basis points, making it the tenth increase and bringing borrowing costs to their highest level since September 2007. However, the central bank also hinted that it may not increase interest rates any further, as the sentence in its statement suggesting the need for additional policy firming was removed. During the press conference, the US Fed Chair, Jerome Powell, indicated that the Fed may have reached the end of the current tightening cycle, stating that it is “getting close to or may even be there.”

Pfizer Inc. (NYSE: PFE)

Pfizer posted Q1 earnings and revenue on Tuesday that surpassed analysts’ expectations, despite a drop in sales due to lower demand for its Covid-19 vaccine. In the first quarter, the company’s net income was $5.54 billion down from $7.86 billion, in the same period last year. Sales for the quarter totaled $18.28 billion, representing a 29% decrease from the same period a year ago. Of that number, Covid-related sales contributed $7.1 billion, with $3 million in Covid vaccine revenue and $4 million in sales of its Covid antiviral pill ‘Paxlovid’.

Anheuser-Busch InBev SA/NV (JSE: ANH)

Anheuser-Busch InBev, the world’s largest brewing company, poured a 13.6% increase in core profit to $4.76 billion in the first quarter of the year. Revenues rose 13.2% year-on-year to $14.2 billion, driven by price increases and sales of premium products. The company achieved this despite a minimal increase in sales volumes, as the beer industry remained resilient despite inflationary pressures. Non-alcoholic beer revenues grew by 30% in the quarter, and sales growth in the company’s core beer portfolio was strong outside of the US, with the return of consumer demand in China and continued growth in India. Anheuser-Busch InBev also owns brands including Beck’s, Corona, and Stella Artois. The company reiterated its full-year earnings growth forecast and managed to pass on higher input costs to consumers through price increases.

Sources: The Wall Street Journal, CNBC, SENS, The Money Web, CNN

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