Morning Bell – US in a recession and Apple beats expectations

The United States entered a technical recession, with its gross domestic product (GDP) contracting 0.9% in the second quarter of 2022.

The 0.9% decline followed a 1.6% contraction in the first quarter and was unexpected as experts predicted 0.5% growth.

On the positive side, Apple and Amazon produced positive results, which saw their share prices increase in after-hours trading.

Here is the biggest news of the day.

• The United States is now in a technical recession, with the second consecutive quarter of negative GDP growth. GDP for Quarter 2 came in at -0.9%, versus the consensus expectation of +0.5%. Quarter 1 GDP was -1.4%.

• Apple beat earnings expectations. Its earnings per share came in at $1.20 versus the expectation of $1.16. Revenue grew by 2% to $83 billion with a gross margin of 43%. The iPhone still leads revenue generation, followed by services.

• Amazon also beat expectations, with revenue of $121 billion versus the expectation of $119 billion. Revenue guidance for Q3 is $125 billion to $130 billion. Earnings per share came in at a loss of -$0.20 versus the expectation of +$0.12.

• Intel missed earnings expectations, with revenue down 22% compared to Q2 2021. Earnings per share came in at a loss of -$0.11 compared to +$1.24 in Q2 2021.

• Roku is crashing after its earnings release disappointed, with the share price falling 25% in aftermarket trading.

• DRA Global announces the sale of its APAC maintenance and construction business to KAEFER Integrated services for $8 million, recording an impairment between $17 million and $20 million. DRA subsequently withdrew its EBIT guidance for 2022.

• Resilient REIT sells more shares of NEPI Rockcastle, with a further 10.5 million shares sold for R993 million. This is in addition to the sale of 35.2 million shares that was announced in February.

• Anglo American declared a dividend of $1.24 per share for its semi-annual results, in line with its 40% payout policy. Basic headline earnings per share came in at $3.02 compared to $4.22 in 2021.

• Anheuser-Busch InBev declared revenue growth of 11.5%, for its semi-annual results. Earnings per share came in at $1.33 compared to $1.30 in 2021.

• Afrimat will issue 13.4 million new ordinary shares for a price of R50.85. The “bookbuild” equity raise of R680 million accounts for 8.5% of the company’s market cap.