Spark was the story of the day; And it wasn't bright
The New Zealand sharemarket dropped nearly 1% today after investors voted with their feet following the release of Spark’s half-year result, resulting in a significant value drop.
Friday, February 21st 2025, 6:43PM
by BusinessDesk
The S&P/NZX 50 Index closed down 0.99% or 127.78 points falling to 12,752.58 with 53,197,662 shares changing hands to the value of $196.95 million.
The market was dragged down by the S&P/NZX10 index stocks.
There were 46 gainers on the main board and 92 decliners.
'Weakness across the board'
Spark was the story of the day, with its share price falling by 18.77% to $2.38, down 55c.
Devon Funds Management's head of retail, Greg Smith, said Spark is a clear example of how tough our economy's challenges are.
“We’ve seen reduced Government spending, but also businesses have been cutting back as well. It’s been weakness across the board, generally,” Smith said.
“They [Spark] talked about the recessionary conditions, but they’re taking measures to counter this by reducing costs.
"Obviously, we’re seeing many businesses do this against the backdrop of a recession. The only area doing relatively well is data centres, but it’s a relatively small part of the business for now.”
Elsewhere, Sky Network Television also reported a decline in earnings, with its share price falling 3.08% or 8c to $2.52.
“They’ve got some challenges on a couple of fronts with half-year earnings down 26%. I suppose the positives were the Sky Box churn; that’s eased, and streaming appears to be doing pretty well. But people are cutting back, and that includes discretionary things like TV.
“A big positive for them is they’ve reached a deal with New Zealand Cricket for the Black Caps’ home matches for the next six years.”
More positive news: Fonterra announced its full-year earnings will be in the “upper half” of its range. The share market responded, with Fonterra’s share price rising by 4.70% or 24c to $5.35.
Looking ahead to next week, Smith said results to watch included Heartland Bank, particularly following its announcement of a $49.6m impairment, Gentailers Mercury and Meridian, and Summerset Holdings.
US stocks
Wall Street stocks dropped Thursday following disappointing results from Walmart as banking shares fell in a move analysts attributed to profit-taking.
Walmart reported quarterly results that met expectations, but shares slid 6.5% after its forecast missed expectations.
Meanwhile, shares of Citigroup, Goldman Sachs, and JPMorgan Chase fell 3% or more, dragging on major indices.
The S&P 500, which finished at a record the last two days, dropped 0.4% to 6,117.55.
The Dow Jones Industrial Average fell 1.0% to 44,176.65, while the tech-rich Nasdaq Composite Index declined 0.5% to 19,962.36.
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