EPS Down 30% at Temenos in the Fourth Quarter
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The banking software specialist Temenos recorded significantly less profit in the fourth quarter and in 2022 as a whole. For the current year, however, the company is again holding out the prospect of an increase in earnings. The company, which is one of the 30 most important traded on the Swiss stock exchange, posted adjusted earnings of 0.99 US dollars per share in the final quarter. That was 30 per cent lower than a year earlier, Temenos admitted on Monday evening. For the full year 2022, earnings were $2.82 per share (-26%). Shareholders can nevertheless look forward to a higher dividend of 1.10 francs per share after 1.00 francs in the previous year. Already a month ago Temenos had informed that there had been a strong slump in the adjusted operating profit EBIT - both in the quarter and in the full year. Operating EBIT fell 27 per cent to $94 million in the fourth quarter and 24 per cent to $272 million for the full year. For the current year 2023, Temenos expects software licensing revenue to grow by at least 6 per cent. On Tuesday (today), the Geneva-based company will hold an investor day.
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The Swiss stock market ticked higher on Monday, closing in the green for the second straight session. The SMI gained 0.1 per cent to 11,267 points. Among the 20 SMI stocks, there were eleven price gainers and nine price losers. 29.23 (previously: 45.97) million shares were traded. The market was led by Lonza, which rose by 1.7 per cent in the absence of any news. Credit Suisse (+1.5 per cent) and Holcim (+1.1 per cent) were also sought after. Novartis fell 0.5 per cent. The pharmaceutical company had appointed Gilbert Ghostine as chairman of the board of its generics division Sandoz, which Novartis is currently spinning off. In the wake of the figures published last week by Sika (hardly changed) and Swiss Re (+1.4%), there were some positive analyst comments supporting the shares. In the second tier, Sulzer closed 0.9 per cent lower. The industrial company's business figures had been described as solid and the outlook as positive. However, the stock had been performing well recently, so investors may have taken profits.
European stocks hovered around the flatline on Monday in a subdued session as U.S. markets are closed for Presidents Day. Global geopolitical tensions were running high, and with investors looking ahead to the Federal Reserve minutes on Wednesday and core PCE inflation data on Friday, any gains were modest. The Stoxx Europe 600 index gained 0.1% to 464.6 points. In Paris, the CAC 40 and the SBF 120 lost 0.2% and 0.1% respectively. The DAX 40 in Frankfurt ended virtually unchanged, while the FTSE 100 in London added 0.1%. Automotive supplier Faurecia (+2.3%) reported robust 2022 results, including cash generation, according to JPMorgan. British activist investment fund TCI, led by Chris Hohn, has asked Airbus (-2.2%) to immediately abandon its plan to buy a 29.9% stake in Evidian, the future division of Atos (-1.2%) that will combine its digital transformation and Big Data and Security (BDS) activities, the Financial Times reported on Monday. The US Food and Drug Administration (FDA) granted priority review to Valneva (+0.7%) for its chikungunya vaccine candidate, VLA1553. Deutsche Börse announced on Friday evening that industrial gases specialist Linde, whose shareholders approved its delisting last month, would be replaced by Commerzbank (-3.5%) on the DAX 40, the Frankfurt Stock Exchange's flagship index. The changes will take effect on 27 February, the German stock exchange operator said. Equally in the European indices, the process ensures a change in the top league of the largest listed companies. The shares of the French company Safran replace the stocks in the pan-European blue-chip index Stoxx-50. In the Euro-Stoxx-50, Linde is substituted by the Italian UniCredit.
On Monday, U.S. markets were closed for Presidents Day.
sian stocks were little changed on Tuesday, as investors reacted to weak purchasing manager index reports from Japan and kept a wary eye on the latest geopolitical developments. U.S. President Joe Biden made an unannounced visit to Kyiv ahead of the one-year anniversary of Russia's invasion of Ukraine amid mounting concerns over China's stand on Russia and Ukraine. U.S. Secretary of State Antony Blinken warned China of consequences should it provide material support to Russia and North Korea fired more missiles. Chinese shares were seeing modest gains, with the Shanghai Composite index rising 0.1 percent on optimism around post-COVID economic recovery. Hong Kong's Hang Seng index was down 1.3 percent. In Hong Kong, property stocks lead the way as they did the previous day. Country Garden Holdings and China Overseas Land & Investment climbed 1.2 and 1.4 per cent respectively, supported by expectations of further government aid and an easing of Chinese monetary policy. HSBC shares lose 2.3 per cent after the presentation of the fourth quarter figures. Japan's Nikkei index slipped 0.2 percent as a business survey showed manufacturing activity in the country contracted at the fastest pace in 30 months in February. Traders speak of unsettled investors due to the uncertainties of Japanese monetary policy with the change at the top of the central bank. South Korea's Kospi edges 0.2 per cent higher, with electronics stocks and the internet sector holding back. Preliminary data from the first 20 days of February show the exporting nation heading for another trade deficit this month. Exports of semiconductors and mobile phones in particular are sputtering. Index heavyweight Samsung Electronics is down 1.0 per cent. Samsung Fire & Marine Insurance lost 0.5 per cent after presenting its fourth-quarter figures.
As to Swiss government debt yields, the yield of the 10-year Confederation bonds was quoted at 1.417% and those of the 2-year Confederation bonds at 1.275%. On Monday, U.S. markets were closed for Presidents Day.
Sika price target: Barclays lifts to CHF 340 (290) - Overweight
Nestlé price target: Morgan Stanley upgrades to CHF 123 (122) - Overweight
Swiss Re target price: Goldman Sachs cuts to CHF 86 (88) - Sell
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