☕️ Tech earnings scorecard

Now is a good time for a big tech health check

August 04, 2023

Good morning.

Results from the most valuable company in the world, Apple, dropped just a few minutes before this newsletter went out the door. It’s always a risk trying to draw conclusions while the market is still digesting the numbers and before the earnings call is underway. But one way to gauge knee-jerk sentiment: Apple shares are down in after-hours trading after the top line missed estimates and shrank for the third straight quarter.

There are a couple of bright spots for Apple bulls to hold on to though: services revenue and China revenue were both up and there will almost certainly be a new iPhone out next month.

The June quarter big tech earnings scorecard so far? Google, Facebook Amazon were good; AI-darling Microsoft was bad, Apple TBC.

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MARKET MOVERS

*Stock data as of the market close. Commodities and crypto data in USD.

Market News: Another rough day for local stocks and the best performer on the ASX wasn’t even Australian. Virgin Money, the British bank listed in both London and on the ASX (a legacy of once being ultimately owned by NAB) was the best performer among the top 200.

The lender, which still counts Richard Branson among its shareholders, admitted that the UK economic outlook remains mixed at best, with high inflation and concerns about interest rate rises keeping a lid on borrowing.

On the other hand, unemployment remains low. Regardless, the company’s plans to buy back up to £175m ($388m) in shares over the course of the financial year proved to be a crowd pleaser.

THE QUICK SYNC

  • The Bank of England raised interest rates in the UK by 25ps to 5.25% (City Index)

  • Amazon beat expectations for both the top and bottom line with its quarterly results (CNBC)

  • Apple posted its third straight decline in quarterly revenue, but net profit and services revenue both grew (WSJ)

  • Softbank-backed UK chip designer ARM is targeting a US$60-70bn valuation in a September IPO (Bloomberg)

  • Apollo CEO Marc Rowan has warned that the global private equity industry is in retreat, and funds will have to become better investors, due to higher interest rates (Financial Times)

TRADING FLOOR

M&A:

  • Viridian has agreed terms for a scrip-based deal to acquire Smartmove Professional Advisors. (AFR)

  • Private construction group Built has reportedly held talks with Brookfield about acquiring its construction business Multiplex. (The Australian)

  • TrueGreen will acquire North Sydney Bus Charters in a deal that values the group at as much as $100m. (AFR)

  • The ACL-Healius merger still looks like a long shot. (The Australian)

  • Whitehaven Coal is among the short-listed parties for BHP’s Blackwater and Daunia coal mines in Queensland. (AFR)

  • PharmaCare acquires Bounce Foods to complement its portfolio of brands. (BNA)

  • Suntory will merge its two drinks businesses in Australasia to create a $3bn-a-year company. (AFR)

Capital Markets:

  • Mont Royal Resources is seeking to raise $2m overseen by Wentworth Securities. (AFR)

  • Bis Industries is refinancing its debt requiring its owners to put in an additional $130m in capital to keep the company afloat. (AFR)

  • GigaComm is trying to raise $100m with Morgan Stanley’s bankers leading the talks. (AFR)

VC:

  • Vitable, an online vitamin brand, has raised $7.5m. (BNA)

  • Cicada was awarded a $7.8m grant to help health and medtech startups to develop their research (StartupDaily)

Others:

  • Pinnacle Investment Management claims performance fees of $54.8m in the six months to June 30. (AFR)

  • More redundancies have happened in Credit Sussie as it continues to wind down. (The Australian)

  • ASIC takes eToro to court over high-risk CFD. (BNA)

  • Bardee lets go of more than half its workforce. (BNA)

THE WATERCOOLER