Service Sector in Emerging Economies Remains Mixed in September
Emerging economies remain mixed in September, with Russia expanding and Brazil contracting further. Although Russia has moved back to expansionary phase, its overall economic environment remains challenging with rising inflationary pressure.
The Markit Eurozone Composite PMI (Purchasing Managers’ Index) fell to 53.9 in September from 54.3 in August. With manufacturing slowing and the service sector not picking up at the desired pace, the outlook for overall growth of the Eurozone economy remains unstable.
All the indices are lower than their 12-month trailing averages, indicating a slow pace of growth in the US economy—85% of which depends on the service sector.
With manufacturing slowing, a reading of the Non-Manufacturing Index at an above-neutral level (56.9) may provide some relief to the US economy, which is highly dependent on the service sector for its economic growth.
Hewlett-Packard Enterprise Company, a wholly owned subsidiary of Hewlett-Packard Company (HPQ), issued high-grade bonds rated Baa2/BBB worth $14.6 billion in nine parts.
Investment-grade bond issuance fell to $26.275 billion last week as compared to $32.35 billion in the previous week.
Investment-grade corporate bonds worth $26.275 billion were issued in the primary market in the week to October 2, 2015.
Investment-grade corporate bonds are debt instruments that Standard & Poor’s rates as BBB- and above.
Investment-grade bond yields fell week-over-week after a disappointing US jobs report. Non-farm payrolls in the US rose by a less-than-expected 142,000 in September.
NetApp generated investor returns of -28% in the TTM period and -2.09% in the trailing one-month period. It generated 2.41% in 2014 and -27.79% YTD.
NetApp’s cash-to-debt ratio in 1Q16 was 3.33x—higher than the 1.36x industry median. Its operating income was -$26 million.
NetApp reported 1Q16 revenue growth per share of 2.40% over the past 12 months. Its EBITDA and free cash flow growth were -19.30% and 4.20%, respectively.
On August 19, 2015, NetApp announced its 1Q16 results, reporting revenues of $1.34 billion. Its GAAP net loss for 1Q16 was $30 million, or $0.10 per share.
As of October 2, 2015, Western Digital generated investor returns of -16.73% in the trailing 12-month period and -0.72% in the trailing one-month period.
The cash-to-debt ratio of Western Digital in 4Q15 was 2.06x—higher than the industry median of 1.36x. Its operating income was $255 million.
Western Digital’s revenue growth per share over the past twelve months was -1.60%. Its EBITDA growth and free cash flow growth were -8.30% and -24%.
In June 2015, shares of Western Digital (WDC) saw a 19% drop, which was driven by overall falls in demand in its global PC segment.
Western Digital generated $488 million in cash from operations in 4Q15, ending with total cash and cash equivalents of $5 billion.
Western Digital reported 4Q15 revenues of $3.2 billion—a 10.11% decrease compared to 3Q15 and 12.59% lower than its 4Q14 revenues.
Macroeconomic factors like the Greek debt crisis, the declining Chinese stock market, and global growth issues have made tech stocks not so attractive.