Deutsche Bank Battles Back

Deutsche Bank is looking to buck the trend of other European banks, rising sharply during a difficult market session. 👍

The German lender’s third-quarter net profit of 1.031 billion euros topped estimates of just under 1 billion. That was down 8% YoY but up 35% sequentially as it wrestles with troubles in its investment unit.

As for its segments, its corporate banking business benefited from higher interest rates, seeing revenues rise 21% YoY. Meanwhile, its investment arm revenues struggled with the rest of the market. Revenues were down 4% YoY and 12% YoY through the year’s first nine months. 📊

Overall, CFO James von Moltke said results are essentially in line with what the bank forecasted. Fixed income and currency revenues are normalizing, so the bank is focusing on other products like credit and financing.

Common equity tier one (CET1) capital continues to improve, rising to 13.9% from 13.8% last quarter and 13.3% last year. Return on tangible equity also increased from 5.4% to 7.3% over the last quarter. This shows investors that its capital levels and overall operational performance continue to improve. 

Additionally, the bank expects 29 billion in revenues for the year, near the top end of its previous estimates. It also has the ability to release up to 3 billion euros more in capital to increase and accelerate share buybacks and/or dividends. 💰

That said, investors are not blind to the challenges ahead. Weaker European growth rates, macroeconomic uncertainty, and individual operational risks remain headwinds for the overall sector. 

$DB shares rose 7% on the day. However, they’re still stuck in a long-term range as it tries to fight off the “mediocrity” much of Europe’s financial sector has experienced since the financial crisis. 😓

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Semis Continue To Tower Over Market

Semiconductors continue to dominate the market and thus dominate our headlines. With that said, today we’ve got a fresh stock breaking out and another setting up, so stick with us. 👇

First up is Tower Semiconductor, an Israeli chip manufacturer that reported results today. The company’s revenue fell 13% YoY to $351.7 million during the fourth quarter but topped the $350 million expected by analysts. Its earnings per share were down about 30% YoY to $0.48, but again, better than anticipated. 🔺

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Walmart Bets Big On Advertising

One of the core themes we’ve been discussing for a long time is the “ad-ification” of everything. No matter where you go or what you do, you’re likely being targeted by some form of advertising. And the reason why is because it’s such a high-margin, profitable business opportunity. 🎯

As a result, it’s no surprise to see America’s largest employer and big-box retailer, Walmart, leaning heavily into that narrative during its earnings call. 

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Meta Matures And Amazon Embraces AI

Meta’s Mark Zuckerberg has finally grown up, issuing the company’s first-ever quarterly dividend while announcing record results. 🤩

The company’s revenues jumped 25% YoY in the fourth quarter, while expenses fell 8%. That propelled earnings well above expectations, with revenues also beating as its core advertising business continues to rebound. Daily active users (DAUs), monthly active users (MAUs), and average revenue per user (ARPU) all beat expectations as well.

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Lyft’s IR Department Just Whiffed

Investor relations departments are the silent heroes of a public company, receiving little recognition for the critical role they play. When they do receive a lot of attention, it’s generally not for good reason. That’s unfortunately what Lyft’s team is finding out today. 😵‍💫

After the bell, ridesharing company Lyft reported fourth-quarter results that were good, not great. But the stock immediately shot up and notched as high as a 60% gain before anyone realized what happened. Did the company just invent a cure for rare diseases? Are they pivoting to crypto or semiconductors? What was the cause of this?

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