fourth-quarter results Archives - The Entrepreneur Times

Germany’s Commerzbank achieves its strongest financial performance in a decade, buoyed by elevated interest rates

Posted on February 15, 2024September 7, 2024 by admin

Commerzbank reported a 55% surge in net profit for 2023 on Thursday, marking its most robust financial performance in 15 years, largely driven by elevated interest rates. The net profit for the year exceeded expectations, reaching 2.2 billion euros ($2.36 billion), up from 1.4 billion euros the previous year. Although fourth-quarter net profit showed a decrease of over 16% compared to the same period in the previous year, it surpassed consensus estimates released by Commerzbank.

Investors responded positively to the results, causing shares to rise by approximately 3.7% in morning trading on Thursday. The impact of high interest rates was evident, with net interest income increasing by around 30% for the entirety of 2023 and 8.5% higher in the fourth quarter.

In its outlook, the bank acknowledged the challenge posed by a “continuing economic slowdown” in the current financial year but expressed optimism about surpassing 2023 net profit levels. Deutsche Bank analysts Benjamin Goy and Marlene Eibensteiner described the results as a “solid set of 4Q23 results” and maintained their buy rating on the stock in a Thursday analyst note.

While noting that the 2024 guidance aligns with expectations, the analysts questioned whether the implied net interest income slowdown is too conservative, especially considering Commerzbank’s track record of beating and raising its own 2023 net interest income guidance five times.

The reported results follow a significant business overhaul at Commerzbank, which received a bailout from the German government during the 2008-2009 financial crisis. The bank disclosed a reduction in costs to 6.4 billion euros in 2023, down from 6.5 billion euros the previous year.

Concerns about unstable banks resurface with NYCB troubles as the anniversary of the March crisis approaches.

Posted on February 8, 2024September 1, 2024 by admin

Struggling financial institution New York Community Bank (NYCB) has recently shared an array of financial indicators in the last 24 hours, aiming to reassure uneasy investors. However, NYCB seems to be facing a scarcity of a crucial asset: confidence.

In a late Tuesday announcement, the regional bank asserted that deposits remained steady at $83 billion, emphasizing its substantial resources to address potential outflows of uninsured deposits. Shortly thereafter, the bank elevated chairman Alessandro DiNello to a more involved role in management.

Despite these efforts, NYCB shares experienced a modest 6% increase on Wednesday, offering a minor reprieve from the stock’s drastic 50% drop since reporting fourth-quarter results a week ago. Currently trading at approximately $4.48 per share, the market remains skeptical about the bank’s leadership, describing it as a “confidence crisis,” according to Ben Emons, head of fixed income at NewEdge Wealth.

Amid the downward spiral, Moody’s downgraded NYCB’s credit ratings by two notches to junk, citing challenges in risk management and the ongoing search for key executives. The bank is also facing its first shareholder lawsuit, alleging that executives provided misleading information about the state of its real estate holdings, adding further turmoil.

Last week’s revelation about the need for a substantial cash reserve for losses on offices and apartment buildings, along with a significant dividend cut of 71% to preserve capital, intensified concerns. This unexpected downturn has reignited fears regarding the stability of medium-sized American banks, with worries that losses on commercial real estate loans could trigger a new wave of turmoil.

NYCB’s results have sent shockwaves through the market, impacting the shares of other regional banks with significant exposure to commercial real estate. Valley National, for instance, has seen a 22% decline in the past week. Analysts predict a potential acceleration in commercial real estate nonperforming loans and loan losses throughout 2024, contributing to the caution in investor sentiment.

Despite a diminished valuation, the perceived risks associated with commercial real estate are likely to impede investor interest. Analysts suggest a challenging outlook for the real estate market, especially in office spaces facing decreased occupancy due to remote and hybrid work models, compounded by changes in New York’s rent stabilization laws affecting multifamily dwellings.

Notably, speculators are actively engaging in trades betting on further declines in NYCB shares, evident in the surge of put options activity. Treasury Secretary Janet Yellen has expressed concern about losses in commercial real estate but remains confident in regulators’ ability to manage the situation. Analysts anticipate regulators taking a more critical stance on reserving for potential loan losses following the NYCB incident, possibly leading to increased write-offs and additional capital requirements.

Boeing is poised to announce its fourth-quarter results against the backdrop of the 737 Max 9 crisis.

Posted on January 31, 2024September 1, 2024 by admin

On Wednesday, Boeing is scheduled to disclose its fourth-quarter results, addressing investors’ concerns about the repercussions of a midair incident involving one of its new 737 Max 9 aircraft. Although the impact of this event won’t be reflected in the earnings report, it is expected to be discussed in Boeing’s outlook. Analysts surveyed by LSEG, formerly known as Refinitiv, anticipate the following performance metrics for the last three months of 2023:

Adjusted loss per share: 78 cents
Revenue: $21.1 billion

Boeing’s CEO, Dave Calhoun, who assumed leadership four years ago following two fatal crashes of the Max, is once again facing pressure to restore the company’s reputation with airlines, regulators, and the public. This follows a January 5th incident on Alaska Flight 1282, where a panel blew out as the plane ascended from Portland, Oregon, causing a significant breach in the aircraft’s side.

Federal investigators are currently examining whether the door plug was improperly installed before the Max 9 was delivered to Alaska Airlines late last year. The incident is part of a series of production flaws that have impacted the timely delivery of new planes, causing dissatisfaction among major airline customers. Meanwhile, Boeing’s main competitor, Airbus, continues to outpace Boeing in new aircraft deliveries.

Although the Federal Aviation Administration recently cleared the Max 9 to resume flights, it announced a halt to Boeing’s planned production ramp-up. Boeing had aimed to reach approximately 50 planes per month in 2025 or 2026. The Boeing 737 Max, the company’s best-selling plane, is crucial to its financial targets. Any delay in production increases could impact Boeing’s financial goals and affect suppliers preparing for higher output, as well as customers anticipating new planes to meet post-COVID travel demand.

In response to the incident, Calhoun has undertaken visits to company and supplier production lines, as well as engagements with lawmakers on Capitol Hill. He has committed to transparency and addressing any deficiencies in manufacturing. The company conducted the first of several production stand-downs last week to discuss manufacturing issues with workers and explore potential improvements to Boeing’s processes.

Tag: fourth-quarter results

Germany’s Commerzbank achieves its strongest financial performance in a decade, buoyed by elevated interest rates

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