—— Meta Plunges Nearly 20%; China GDP Forecast Raised to 4.8%; U.S. Births Hit 40-Year Low; Hyundai Profit Beats on Weaker Won; Nestlé Sales Decline Again; Deutsche Bank Posts Best Profit in 11 Years; Zuoyebang Files for U.S. IPO
1. Meta Plunges Nearly 20%
On Wednesday night, Meta Platforms released a disappointing quarterly earnings report, sending its share price down nearly 20% in after-hours trading.
In Q1, Meta posted $36.5 billion in revenue, up 27% year-over-year. Net income more than doubled to $12.4 billion.
However, Meta expects full-year capital expenditures to reach $35–40 billion, higher than previously forecast. The company also projected Q2 revenue of $36.5–39 billion, below analyst consensus.
Meta shares had risen 39% year-to-date prior to the earnings release, driven by AI optimism.
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2. China GDP Forecast Raised to 4.8%
In Q1, economists expect China’s GDP to grow 4.8%, up from the previous 4.6% forecast and close to the government’s 5% target.
Analysts have raised full-year projections, though deflation remains a concern.
Overseas demand for Chinese goods surged in Q1, and the government continues to back high-tech industries.
In March, consumer spending lost momentum and housing market issues worsened.
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3. U.S. Births Hit 40-Year Low
U.S. government data shows births fell 2% to 3.59 million in 2023, marking the lowest level in over four decades. The decline has persisted for more than 20 years.
Among women of childbearing age, the pregnancy rate also hit a historic low.
This trend is mirrored globally, especially in wealthier nations. In the U.S., falling birth rates are largely due to economic concerns, lack of paid leave, and rising healthcare costs.
More young Americans are choosing to delay having children until they feel financially secure.
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4. Hyundai Profit Beats Estimates on Weaker Korean Won
In Q1, Hyundai Motor posted $2.58 billion in operating profit, beating expectations, with revenue rising 7.6% year-over-year.
The company attributed ₩251 billion of its gains to favorable forex conditions, thanks to the weaker Korean won and stronger U.S. dollar.
Hyundai sold 947,000 vehicles, down 4% YoY. U.S. sales rose 2%, Europe increased 0.7%, while China sales dropped 14%.
Goldman Sachs, for comparison, earned $901 million in equity underwriting fees over the past nine months.
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5. Nestlé Sales Decline Again
Swiss food giant Nestlé reported Q1 revenue growth of 1.4% year-over-year, missing analysts’ 2.9% forecast.
North American sales of brands like Nescafé and Häagen-Dazs declined, pressured by inflation.
CEO Mark Schneider said the company plans to drive growth through volume expansion, increased advertising, and product innovation in 2024.
Nestlé expects organic sales to grow around 4% this year, with improved operating margins.
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6. Deutsche Bank Posts Best Profit in 11 Years
In Q1, Deutsche Bank’s net income rose 10% YoY to €1.45 billion, slightly above analyst expectations.
Revenue from investment banking jumped 13% to €3 billion, with fixed-income trading up 7% and advisory/underwriting revenue surging 54%.
The bank’s cost-cutting strategy is on track, and its loan-loss provisions decreased.
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7. Zuoyebang Files for U.S. IPO
Sources say Chinese online education platform Zuoyebang has confidentially filed for a U.S. IPO, signaling eased regulation on private edtech firms in China.
Zuoyebang is currently working with advisors and could list as early as this year, potentially raising up to $100 million.
Last Friday, China’s CSRC stated it supports overseas and Hong Kong listings. On Tuesday, Pony.ai received approval to list in the U.S.
Since early 2022, only one Chinese company has raised more than $100 million in a U.S. IPO.
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This content is sourced from Financial Times, Bloomberg, and The Real Deal, among other financial news outlets.