Netflix Q3 Subscriber Growth Slightly Exceeds Estimates

LOCAL MARKET COMMENTARY

The Top 40 index and the All Share index rose by 0.34% and 0.22%, respectively, on Thursday, closing at 78,567 and 86,582 points. This followed comments from South Africa's central bank governor, Lesetja Kganyago, suggesting that shifting to a lower inflation target could have minimal impact. The country’s September inflation figures, due next week, are expected to shed more light on inflation trends. PSG Financial Services, listed on the JSE, reported a 28% increase in headline earnings per share (HEPS) for the six months ending August 31, 2024. Meanwhile, Pick n Pay projected a larger headline loss for the half-year but indicated that its full-year profit before tax and capital items should improve significantly from the previous year.

EUROPEAN MARKET COMMENTARY

European markets closed higher on Thursday as investors evaluated a series of corporate earnings and the European Central Bank’s (ECB) third interest rate cut of the year. The ECB reduced the deposit rate by 25 basis points during its October meeting, responding to easing inflation risks as price growth in the eurozone fell to 1.8% in September, below the bank’s 2% target.

US MARKET COMMENTARY

The Dow Jones Industrial Average hit its fourth record high in five days, driven by stronger-than-expected retail sales and a positive outlook from chipmaker TSMC. While the S&P 500 saw a slight drop and the Nasdaq barely gained, strong U.S. economic data, including a 0.4% rise in September retail sales and a drop in jobless claims, showed healthy growth. With this momentum and positive third-quarter earnings reports, markets are expecting the Federal Reserve to cut interest rates by 25 basis points at their next meeting.

ASIA MARKET COMMENTARY

Asia-Pacific markets opened with mixed results this morning as investors reacted to key economic data from China and Japan. China's GDP growth for the third quarter was 4.6%, slightly above expectations but lower than the previous quarter, and house prices dropped 5.8% year-over-year in September. Despite this, China's CSI 300 rose 0.7% and Hong Kong's Hang Seng gained 1.3%. In Japan, inflation for September stood at 2.5%, with core CPI (excluding fresh food) rising 2.4%, slightly above forecasts.

CURRENCY MARKET COMMENTARY

South Africa's rand weakened against a strengthening U.S. dollar on Thursday after U.S. retail sales exceeded expectations, signalling a strong U.S. economy. The dollar was set for its third consecutive weekly gain, supported by strong U.S. economic data and a dovish European Central Bank, delaying expectations of U.S. rate cuts, especially if Donald Trump wins the presidency.

COMMODITY MARKET COMMENTARY

Gold surged past $2,700 per ounce for the first time ever this morning, driven by uncertainty surrounding the U.S. election and ongoing tensions in the Middle East, which increased demand for safe-haven assets. Additionally, loose monetary policies contributed to the rise. Meanwhile, oil prices edged higher on Thursday, recovering from two-week lows, after U.S. data revealed declining crude and fuel inventories.

Premier Group Limited (PMR) +2.32%

Shareholders are informed that for the first half of FY2025, the Group anticipates earnings per share (EPS) to increase by 27% to 35%, reaching between 415 and 441 cents, up from 326 cents in H1-FY2024. Headline earnings per share (HEPS) are also expected to grow by 25% to 33%, rising to between 414 and 440 cents, compared to 331 cents previously. Despite challenges such as high-interest rates, constrained consumer spending, and volatile soft commodity prices, the Group has achieved moderate revenue growth. This improvement is attributed to a strong focus on margin management, cost-saving measures, and enhanced operational efficiencies across manufacturing, logistics, and distribution.

Combined Motor Holdings Limited (CMH) -2.17%

For the six months ending August 31, 2024, the Group reported total assets of R4.94 billion, up 3% from the previous year. Cash resources increased significantly by 35.8% to R673.8 million. Net asset value per share rose by 4.8% to 1 768 cents. However, revenue declined slightly by 1.3% to R6.53 billion, while operating profit dropped by 21.8% to R283.9 million, resulting in a reduced operating profit margin of 4.3%. Total profit and comprehensive income fell by 31.8% to R134.2 million, with basic earnings per share down to 179.4 cents and headline earnings per share to 179.3 cents. A dividend of 102 cents per share is set for December 2024, a 30.1% decrease from last year.

PSG Financial Services Limited (KST) -0.59%

The financial results highlight a 28% increase in recurring headline earnings per share, reaching 48.2 cents, and a 26% rise in dividends per share to 17.0 cents. Total assets under management grew by 16%, totalling R435.7 billion, while gross written premiums saw a 10% increase, amounting to R3.7 billion.

Pick n Pay Stores Limited (PIK) -1.68%

For the first half of FY2025, the Group anticipates a decline in earnings across various metrics. Expected earnings per share (EPS) will decrease by 30% to 40%, ranging from -141.22 to -131.13 cents, compared to -100.86 cents for the same period last year. Diluted EPS is also projected to drop by 30% to 40%, with similar declines in headline earnings per share (HEPS), which is expected to fall by 10% to 20%, ranging between -140.98 and -129.23 cents. Comparable HEPS is projected to decrease by 20% to 30%, ranging from -142.84 to

 Netflix Inc. (NFLX) -2.04%

Netflix reported strong third-quarter earnings, surpassing expectations with earnings per share of $5.40 (vs. $5.12 expected) and revenue of $9.83 billion (vs. $9.77 billion expected). Paid memberships also exceeded forecasts at 282.7 million. The company’s net income rose to $2.36 billion, up from $1.68 billion a year ago, with revenue increasing 15%. Netflix expects fourth-quarter revenue to reach $10.13 billion and full-year 2025 revenue between $43 billion and $44 billion, driven by growth in its core content, ads, and gaming. Shares rose 5% in after-hours trading.

Blackstone Inc. (BX) +6.27%

Blackstone exceeded Wall Street's expectations for the third quarter as its assets under management (AUM) reached a record $1.1 trillion and fund values rose. The firm saw $41 billion in inflows and committed $54 billion in capital, driven by increased dealmaking amid a favorable economic outlook. Blackstone's private equity and infrastructure funds appreciated by 6.2% and 5.5%, respectively. Distributable earnings reached $1.3 billion, translating to $1.01 per share, beating the forecast of $0.92. Major deals included the $16 billion acquisition of Australia's AirTrunk and an $8.4 billion deal for U.S. firm Smartsheet. Blackstone’s shares rose 6.65%, giving it a market value of $208 billion.

Do you prefer a full in-depth report you can read offline? Click here to download the full report.