Airbnb Reports Strong Q4 Revenue but Expects Slower Q1 Growth, Shares Up 14% After Hours

Local Market Commentary

The JSE Top 40 index declined by 0.09% to 80,067.2 points, while the All Share index edged 0.11% lower to 87,841.5 points. President Cyril Ramaphosa emphasised the need for national unity in response to criticism of South Africa’s land expropriation laws and foreign policy by US President Donald Trump, highlighting the country’s exposure to global economic headwinds. Meanwhile, South African Reserve Bank Governor Lesetja Kganyago warned of the growing influence of populist leaders and the risks they pose to institutions such as central banks. In the corporate sector, Bain & Co is engaged in a legal battle to overturn a decade-long ban on state contracts following its involvement in a corruption scandal. The Boston-based consultancy, seeking to restore its reputation, has been providing pro bono services to prominent business organisations while the case enters its second year.

European Market Commentary

European equities reached record highs on Thursday, driven by strong earnings from Siemens and optimism surrounding a potential resolution to Russia’s prolonged conflict with Ukraine. The STOXX 600 index climbed 1%, while mid-cap stocks advanced 1.1%, marking their highest levels since January 2022. Investor sentiment was further supported by speculation of a peace deal, though concerns remain that Kyiv and its European allies could be sidelined in negotiations. Meanwhile, Russia’s current account balance showed a deficit of $0.7 billion in January 2025, a sharp decline from the $2.9 billion surplus recorded a year earlier, according to central bank data. The country’s foreign trade surplus also narrowed to $4.5 billion from $5.6 billion in December 2024.

U.S. Market Commentary

The S&P 500 closed higher on Thursday, driven by gains in Nvidia, Apple, and Tesla, following President Donald Trump’s announcement of a plan to implement reciprocal tariffs on U.S. trading partners. A White House official indicated that these tariffs, designed to match higher duties imposed by other nations, could take effect within weeks. Market sentiment was also supported by economic data showing a rise in U.S. producer prices for January, while key components of the core Personal Consumption Expenditures (PCE) index—closely monitored by the Federal Reserve—remained stable or declined. Notably, healthcare costs, which account for nearly 20% of the core PCE, edged down by 0.06%. Additionally, a separate report highlighted a decline in U.S. jobless claims, reinforcing optimism about the labour market.

Asia Market Commentary

Asia-Pacific markets largely advanced on Friday, following Wall Street’s gains after President Donald Trump signed a reciprocal tariffs plan without immediate implementation. In India, wholesale price inflation for January is projected to rise to 2.5%, up from 2.3% in the previous month. Singapore’s economy grew by 4.4% in 2024, marking its strongest expansion since 2021, with fourth-quarter GDP rising 5% year-on-year, exceeding Reuters’ forecast of 4.7%. Despite this, the Straits Times Index retreated 0.37% after hitting a record high earlier in the week. Meanwhile, South Korea’s unemployment rate eased to 2.9% in January, down from a three-year high of 3.7% in December. Government data showed a 1% annual increase in the country’s unemployed population to 1.08 million, while the economically active population expanded by 0.5% to 28.96 million.

Currency Market Commentary

The South African rand regained some ground against a weaker U.S. dollar on Thursday, following reports that Washington intends to initiate talks to resolve the Russia-Ukraine conflict. The dollar softened after January’s producer price data suggested a moderation in inflation, reinforcing expectations of a lower core PCE inflation reading when released later this month. Sentiment weakened further after the White House confirmed that proposed reciprocal tariffs on other nations would not take immediate effect. Meanwhile, the euro, along with European currencies such as the Swiss franc, Swedish krona, and Norwegian krone, strengthened on renewed optimism over a potential Russia-Ukraine peace agreement

Commodity Market Commentary

Gold prices remained stable on Friday, set for a seventh consecutive weekly gain, as concerns over a potential global trade war intensified following U.S. President Donald Trump's proposal to impose reciprocal tariffs on all nations taxing U.S. imports. Elevated gold prices, reaching record highs, have dampened jewellery demand in India’s wedding season, while Chinese dealers have resorted to discounts to stimulate sales. Meanwhile, oil prices edged higher, poised to break a three-week losing streak, driven by strong global fuel demand and expectations that Trump's tariff measures will not take effect until April, allowing time for negotiation. Global oil demand has risen to 103.4 million barrels per day, reflecting a year-on-year increase of 1.4 million bpd, according to JPMorgan. The International Energy Agency (IEA) reported that Russian crude production climbed slightly last month, suggesting that its exports may persist if workarounds to the latest U.S. sanctions are found. As the world’s third-largest oil producer, Russia's crude output remains a key factor in sustaining elevated oil prices.

British American Tobacco Plc (BTI) -8.28%

British American Tobacco (BAT) remains committed to transitioning into a predominantly smokeless business by 2035, with 2024 serving as a pivotal investment year. Despite a 5.2% decline in reported revenue, mainly due to the sale of Russian and Belarusian operations and foreign exchange headwinds, organic revenue grew by 1.3%, driven by an 8.9% rise in New Categories revenue. The number of adult consumers using BAT’s smokeless products increased by 3.6 million to 29.1 million, now representing 17.5% of group revenue. Profit from operations rebounded to £2.74 billion from a significant loss in 2023, reflecting strategic investments and improved commercial execution, particularly in the U.S. and Europe. Adjusted organic profit from operations rose by 1.4%, and diluted EPS increased by 3.6%. BAT’s financial strength remains evident, with free cash flow at £7.9 billion, a 2% dividend increase to 240.24p, and a planned £900 million share buy-back in 2025. The company anticipates regulatory and fiscal challenges in Bangladesh and Australia but remains focused on achieving 3-5% revenue growth and 4-6% adjusted profit growth by 2026.

South32 Limited (S32) +6.39%
South32 Limited reported robust financial results for the half year ending 31 December 2024, with revenue from continuing operations rising 25% to US$3.12 billion compared to the previous year. Headline earnings surged to US$385 million (8.5 US cents per share), a significant improvement from US$53 million (1.2 US cents per share) in H1 FY24. The company announced an interim dividend of 3.4 US cents per share, fully franked, payable on 3 April 2025, reflecting a 750% increase from the prior year. Shareholders on the South African branch register should note key trading restrictions between 27 February and 7 March 2025. Further details, including currency conversion rates and dividend information, are available on South32’s website.

Italtile Limited (ITE) +0.08%

Italtile Limited has issued a voluntary trading statement for the six months ending 31 December 2024, ahead of its full results release on or about 3 March 2025 via SENS. The Group expects earnings per share (EPS) to be between 69.0 and 72.2 cents, reflecting a 2.2% to 6.9% increase from the prior period’s 67.5 cents. Headline earnings per share (HEPS) are projected to range from 68.5 to 71.7 cents, representing a rise of 2.0% to 6.7% from 67.2 cents in H1 2023. While these results indicate moderate growth, shareholders are advised that the financial information has not been reviewed or audited.

Airbnb Inc. (ABNB) +0.37%

Airbnb reported higher quarterly revenue on Thursday, driven by strong international travel demand, particularly in Latin America and sustained cross-border travel across Asia Pacific, Europe, the Middle East, and Africa. Despite this, the company forecast slower growth for Q1 due to challenging year-over-year comparisons and a stronger dollar. Shares rose 14% in after-hours trading. For Q1, Airbnb projected revenue between $2.23 billion and $2.27 billion, reflecting a 4% to 6% increase year-on-year. However, it expects a slight decline in the average daily rate due to exchange rate impacts. Nights and Experiences Booked are expected to remain flat, excluding Leap Day. The company also announced plans to invest $200 million to $250 million in new business initiatives. For the fourth quarter ending 31 December, revenue rose 11.8% to $2.48 billion, surpassing Wall Street expectations, with earnings of 73 cents per share, beating the consensus estimate of 58 cents.

Deere & Company (DE) -2.17%

Deere reported a 35% drop in quarterly revenue, missing analysts' expectations, as farmers opted to retain older equipment or switch to rentals due to weak incomes and high borrowing costs. The company maintained its 2025 profit forecast of $5 billion to $5.5 billion, though analysts expect potential upward revisions later in the year. Deere revised its forecast for sales in its largest production and precision agriculture segment, now projecting a 15% to 20% decline, worse than the previous estimate of a 15% drop. First-quarter net sales fell to $6.81 billion, below the $7.7 billion analysts had anticipated. However, the company reported a profit of $3.19 per share, slightly beating Wall Street’s expectation of $3.11, aided by a reduction in production costs.

Coinbase Global Inc. (COIN) +8.44%

Crypto exchange Coinbase exceeded fourth-quarter profit estimates, reporting earnings of $4.68 per share for the period ending 31 December, well above the $1.81 per share anticipated by analysts. This strong performance was driven by higher trading volumes in bitcoin and other digital tokens, following heightened interest in crypto post the U.S. presidential election. The surge in crypto interest, particularly driven by expectations of more crypto-friendly policies under Donald Trump's administration, saw bitcoin surpass $100,000 during the quarter. Coinbase’s transaction revenue soared 172% to $1.6 billion, while its subscription and services unit saw a 15% increase, contributing to total revenue rising to $2.3 billion from $953.8 million a year earlier. The profit also included $476 million in pre-tax gains from its crypto asset investment portfolio.

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