Netflix House: Netflix’s New Fan-Friendly Places

Good morning and welcome to this week’s edition of 4 Customs Street, our weekly newsletter on the stock market.

The newsletter is divided into two:?

• Green White Green—focused on the Nigerian stock market.?
• Star-Spangled Banner—focused on the US stock market.

Green White Green Last Week?

C&I Leasing Q2 report

C&I Leasing Group released their report for the second quarter of 2023.

These are a few key things to note from their performance for the second quarter of 2023:

• Their gross earnings increased by 3.2% to ?10.02 billion in Q2 2023 from ?9.7 billion in Q2 2022.

• The profit for the period increased by 79.1% from ?134.4million in Q2 2022 to ?240.8 million in Q2 2023. This was largely driven by a 18.3% increase in income from a joint venture from ?323.3 million in Q2 2022 to ?382.4 million in Q2 2023.

• Interest income increased by 23.1% from ?25.09 million in Q2 2022 to ?30.9 million in Q2 2023.

• Earnings per share grew by 57% from ?0.14k per share in Q2 2022 to ?0.22k in Q2 2023.

Sukuk demand surpasses expectations

The ?150 billion Sovereign Sukuk, a kind of investment, got a lot of people interested when it was available to buy until October 11, 2023. People wanted to invest in it, and they put in a total of ?652.827 billion, which is way more than the N150 billion offered, 435% to be exact. This shows that more people know about this investment, and they want to help fund infrastructure projects.

Because so many people wanted to buy the Sukuk, the Debt Management Office (DMO) decided to give ?350 billion of it to different investors. This money will be used to build and fix roads and bridges in different parts of the country.

Green White Green This Week?

The following companies will hold their board meetings this week: Transcorp Hotels, Gerugu Power, BUA Foods, UBA, and United Capital. They’d be meeting to discuss their results for the third quarter of the year.

Unity Bank Plc will be holding their AGM on October 19, 2023.

AGM stands for Annual General Meeting. It is a mandatory yearly meeting held by companies, organisations, and associations to discuss important matters with their shareholders or members.

The AGM serves as a platform for key stakeholders to receive updates on the company's performance, review financial statements, elect board members or directors, approve the distribution of dividends, and address any other significant issues.

If you held your shares within the qualification period, expect your dividends after the AGMs.?

Star-Spangled Banner Last Week

Oil & gold prices rise as a result of Hamas’ attack

After the attack by Hamas on Israel, the prices of crude oil and gold futures have shot up. This war has sadly led to the loss of lives on both sides, with many Israelis affected. It has also caused the kidnapping of several Israeli citizens and soldiers. The price of crude oil for November has risen by 3.5% to $85.73 per barrel, and December's Brent crude is up by 2.9% to $87.00 per barrel. In the case of gold, its price for December has increased by 1% to $1,850.64 per ounce. Chevron was told by the Israeli government to stop producing natural gas at the Tamar platform in the Mediterranean Sea due to an attack on Israel by Hamas over the weekend.

Experts predict that crude oil prices will have a quick and significant increase, but this may not last if the conflict doesn't spread to other regions, particularly important oil-producing areas. There's a concern that if Iran is found to be involved, the US might impose more sanctions on their oil exports, potentially affecting oil prices.

Saudi Arabia is unlikely to reduce its oil production in support of the Palestinians, but the conflict could disrupt diplomatic talks and any additional oil supply from Saudi Arabia. However, if Israel were to strike Iranian facilities, crude oil prices could skyrocket due to the perceived threat of supply disruption. Additionally, this conflict may lead to increased interest in safe-haven assets like gold and the US dollar, and possibly a higher demand for US Treasuries.

UK authorities approve Microsoft Activision tie up

Microsoft just bought a big video game company called Activision Blizzard for $69 billion. This is the biggest deal Microsoft has ever done, and they had to deal with regulators in the US and Europe to make it happen. This deal gives Microsoft a bunch of popular game franchises like Call of Duty and Warcraft. The game company made $7.5 billion in the last year, while Microsoft made $212 billion.

Microsoft's plan is to bring these games to their Game Pass and other platforms. The CEOs of both companies will stay for a while, and this deal is part of Microsoft's strategy to do more than just make operating systems and software.

It took a while to close this deal because regulators had concerns. Microsoft had to make some promises to make them happy, like letting people in Europe stream the games for free. They also made deals with Nintendo, Sony, and cloud gaming providers to share some games. The US Federal Trade Commission (FTC) tried to stop the deal but didn't succeed. UK officials had their own concerns, and Microsoft promised to let another company, Ubisoft, stream the games for a long time.

The FTC is still worried about this deal, and they think it could harm competition. Activision ended the second quarter with $587 million in net income on $2.2 billion in revenue, which was up 34% year-over-year.

Netflix House: Netflix’s new fan-friendly places

Netflix is going to make special places for fans to enjoy their favourite TV shows. These places will have themed clothes, food, and fun activities, like the games in "Squid Game." They're calling these places "Netflix House." They'll be like a mix of stores, restaurants, and live shows. Netflix wants to start with two in the US by 2025 and then open more worldwide.

Netflix has already done 40 temporary fan events in different cities, like "Bridgerton Experience" and a shop in Los Angeles. Now, "Netflix House" will be a permanent place, showing they're serious about promoting their shows. Other companies have used theme parks, toys, and stuff to make money from their shows. Netflix sees "Netflix House" as a way to promote their shows, not mainly to make money.

JPMorgan Chase beats Q3 profit and revenue expectations

JPMorgan Chase did better than what experts predicted in the third quarter. They made more money from interest, and their costs for bad loans were less than expected. Here are the numbers they shared:

• Earnings: $4.33 per share
• Revenue: $40.69 billion, while experts thought it would be $39.63 billion.

The bank made a lot more money in the third quarter compared to last year, with a profit of $13.15 billion, which is $4.33 per share. But, this per-share number includes 17 cents from losses in securities and 22 cents from legal expenses. It's not clear which items were part of the $3.96 per share profit estimate by LSEG.

LSEG stands for the London Stock Exchange Group. It is a global financial markets infrastructure and data provider. LSEG operates stock exchanges, including the London Stock Exchange, and provides various financial services and data products to the financial industry.

Their total revenue also went up by 21% to $40.69 billion, thanks to earning more money from interest than expected, which reached $22.9 billion, exceeding what analysts thought by about $600 million. At the same time, the amount of money they set aside for potential loan losses was much lower ($1.38 billion), compared to the expected $2.39 billion.

JPMorgan's retail banking division made a profit of $5.9 billion, up 36%, due to more interest income and acquiring First Republic. However, their corporate and investment bank's profit decreased by 12% to $3.1 billion because they earned less money from trading and advisory services. After these results were reported, JPMorgan's shares went up by 1.5% on Friday.

Citigroup Q3 earnings beat expectations

Citigroup shared its results for the third quarter on Friday. They did really well in both business and personal banking, making more money and profit than what Wall Street experts thought they would.

Here's what Citigroup achieved compared to what Wall Street predicted:

• They earned $1.63 per share, or $1.52 without counting the impact of selling assets, while Wall Street expected $1.21. It's not certain if the analysts considered the impact of selling assets when making their estimates.
• Their revenue was $20.14 billion, higher than the expected $19.31 billion.

Revenue and net income rose by 9% and 2%, respectively, year-over-year. Their division for big business clients earned $10.6 billion, which is 12% higher than last year and 2% more than the previous quarter. They also had their best third quarter in a decade for making money in rates and currencies.

At the same time, the part of the bank that deals with regular people's money and investments earned $6.8 billion, which is about 10% more than last year and 6% more than the previous quarter.

The CEO, Jane Fraser, said that despite facing challenges, all of their main businesses made more money, leading to an overall 9% increase in revenue.?

Even though Citigroup did better than people thought, the bank's stock price went down by 0.2% on that day. Overall, Citigroup's stock has dropped more than 8% over the course of the year.

PepsiCo reports strong Q3 results with 8.8% organic sales growth

In the third quarter of 2023, PepsiCo's sales increased by 8.8% compared to the same time last year. This was even better than what most people expected, which was an 8.3% increase. Their weight-loss drug, Ozempic, didn't seem to slow down the demand for their products. The CFO mentioned in a conference call that they haven't noticed any negative impact on their sales so far.

The growth in sales mainly came from strong performances in Europe (13% increase) and the regions of Africa, the Middle East, and South Asia (17% increase). The increase in sales was mainly due to raising prices. The number of products sold remained the same for beverages, and it went down by 1.5% for convenient foods.

The company's operating profit went up by 20%, with the most significant gains in PepsiCo Beverages North America (24% increase) and Latin America (28% increase). Earnings per share (EPS) were $2.25, which is higher than the expected $2.15 and much better than the $1.97 from a year ago.

Looking forward, PepsiCo now predicts that their EPS for the full year of 2023 will increase by 13%, up from the previous estimate of 12%. They also expect the organic revenue for the full-year of 2023 to go up by 10%. CEO Ramon Laguarta says they anticipate that the organic revenue and core constant currency EPS growth for the full-year of 2024 will be at the higher end of their long-term goals.

Star-Spangled Banner This Week

• This week, several major global companies, such as Tesla, Netflix, Johnson & Johnson, Bank of America, Goldman Sachs, Morgan Stanley, AT&T, and Lockheed Martin, will report their earnings.?
• The US Census Bureau will release data on national retail sales for September on Tuesday to assess how much Americans are spending.?
• We will also receive new information about the housing market, including data on housing starts and existing home sales for September, along with the NAHB's Housing Market Index for October.

REFERENCES?

https://www.usatoday.com/story/money/2023/10/13/netflix-houses-coming-2025/71174354007/

https://www.cnbc.com/2023/10/13/jpmorgan-chase-jpm-earnings-3q-2023.html

https://www.cnbc.com/2023/10/13/citigroup-c-q3-earnings-report-2023.html