TMR

HON HAI Precision Industry Co.’s revenue rose 35.5% in January, suggesting demand for Nvidia Corp. servers remains resilient during a global wave of AI development.

The company also known as Foxconn reported revenue of NT$730 billion ($23 billion) last month. The year-ago comparison, however, may have been affected by the Lunar New Year holidays, which in 2025 fell in January. It’s projected to report a 28% rise in sales for the three months ending March.

Hon Hai, which makes the servers that house chips in data centers, is one of the key players of an AI hardware industry centered on Nvidia. It’s benefited as US firms from Meta Platforms Inc. to Amazon.com Inc. deploy billions of dollars on the gear needed to train and operate AI, despite warnings of overcapacity given lingering uncertainty over how to monetize the technology. —BLOOMBERG

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SHELL Plc said its fourth-quarter profit slumped, undershooting expectations as lower crude prices, a weak oil-trading performance and a struggling chemicals business dented earnings.

Europe’s largest oil company reported adjusted net income of $3.26 billion for the quarter, down 11% from a year earlier and lower than the average analyst estimate of $3.51 billion. Shell maintained its quarterly share buyback of $3.5 billion even as lower oil prices challenge its plan to boost investor returns through 2030. Production rose slightly. 

Investors are increasingly focused on Shell’s growth outlook after Chief Executive Officer Wael Sawan cut costs and shed underperforming assets. His goal to close a large valuation gap with Exxon Mobil Corp. and Chevron Corp. has gotten harder this year after the shares of the US rivals soared, buoyed by strong production from low-cost oil fields in Guyana, the Permian Basin and Kazakhstan. 

Shell’s stock was the best performer among the world’s top five oil majors in dollar terms last year, but since mid-November the gains have fizzled and so far in 2026 it’s been lagging its peers.

The company’s 2% year-on-year production growth in the quarter pales in comparison to that of the Americans. Chevron increased output by 20% in the fourth quarter from a year earlier, thanks to volumes from its Kazakhstan project and integration of the Hess Corp. portfolio. Exxon expanded production by 15% driven by output in the Permian, as well as from its massive Guyana project.

Brazil and the Gulf of Mexico are key to Shell’s production, as well as its new UK North Sea joint venture with Equinor ASA. But investors are less excited about these plays than those of Exxon and Chevron. Elsewhere in the world, Shell is seeking to find pathways to commerciality for its Namibia oil discoveries and has re-entered Libya fossil-fuel development.

Oil prices tumbled 18% in 2025 as rising production in and outside the OPEC+ alliance led to widespread expectations of a glut forming this year. Benchmark Brent futures have recovered some of the losses so far in 2026, trading around $68 a barrel, as US-Iran tensions add a geopolitical risk premium to prices. But they remain well below the 2025 highs above $80.

Shell’s profit miss comes after analysts revised down their forecasts, following a company update in January that warned its oil trading performance in the quarter had been “significantly lower” than in the previous and that the troubled chemicals division lost money.

Shell’s 2026 capital spending plan remains $20 to $22 billion, after the company’s 2025 expenditures came in slightly less than that range. Sawan and Chief Financial Officer Sinead Gorman have been reining in Shell’s spending during their three years at the helm.

The London-based firm reported an increase in gearing — the ratio of net debt to equity — to 20.7% in 2025, from 17.7% the previous year.

Losses in the chemicals division were significant enough to offset stronger refining margins, which were a boost for Exxon when the Texas giant reported results late last month.

The chemicals business has been a drag on earnings Sawan has pledged to address, but he’s cautioned it could be a long process. –BLOOMBERG

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HSBC Holdings Plc is preparing to hand some bankers little or zero bonuses as the 160-year-old British lender seeks to emulate its Wall Street rivals with a more hard-edged, “eat-what-you-kill” stance.

The bank plans to encourage underperforming staff in divisions including investment banking and wealth management to depart following bonus payouts in the coming weeks, according to people familiar with the matter. This will also include those at managing director levels, some of the people said and added that no final decisions have been made.

Such a move is aligned with the vision of Chief Executive Officer Georges Elhedery, who wants to bring the bank more in line with pay practices at American peers. 

For employees, this is the latest round of tough messaging coming from the leadership of Europe’s largest bank, which is in the midst of a major restructuring. Since taking the helm in the second half of 2024, Elhedery has shuttered most of HSBC’s deals and equity underwriting operations in the US, UK and continental Europe, while combining its commercial and investment banking units. The overhaul led to the exit of several senior and veteran executives.

“We are committed to ensuring our employees are rewarded competitively, with a focus on differentiation determined by performance, to attract and retain talent,” a representative for the bank said in an email.

Little Changed

The bank’s overall bonus pool in 2024 was little changed at $3.8 billion from the previous year, bucking an industrywide trend of higher payouts. Some employees in areas such as the corporate and institutional banking arm were warned to expect lower payouts.

While Elhedery has emphasized that his revamp — with anticipated savings of $3 billion — is aimed at transforming HSBC into a “simpler, more dynamic and agile organization,” the exercise has been weighing on its balance sheet. The lender’s cost-to-income ratio rose to 49.9% in the first half of 2025 from 43.7% in the same period a year earlier, amid higher operating expenses.

Investors, however, have rewarded Elhedery’s efforts. HSBC’s share price has almost doubled since his promotion to the top role on Sept. 2, 2024, though the gains have lagged behind those of rivals including Barclays Plc and Standard Chartered Plc. 

HSBC is still the largest financial institution in Europe with a market valuation of about £225 billion, ahead of Spain’s Banco Santander SA, Switzerland’s UBS Group AG and France’s BNP Paribas SA.

The London-headquartered firm, one of the world’s leading trade banks and a key conduit for commerce between Asia-Pacific and the rest of the world, has had deep roots in Asia after its founding in 1865 in Hong Kong by Scottish merchants. In the past few years, HSBC has deepened its focus on the continent even as global businesses straddling the East and the West face rising risks in an era of shifting geopolitics. It has increased its attention on the Middle East as well.

HSBC, which reports full-year earnings for 2025 this month, is also exploring options for its insurance unit in Singapore. A sale would follow other HSBC disposals in Europe and North America. Last year, the bank agreed to sell its UK life insurance business to Chesnara Plc and its custody business and private banking operations in Germany. It also sold its French life insurance unit. –BLOOMBERG

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A.P. MOLLER-MAERSK A/S plans to cut jobs and focus on cost discipline this year as the container giant seeks to insulate its earnings against deteriorating freight rates with Red Sea routes reopening. The shares fell.

Maersk said it expects underlying earnings before interest, taxes, depreciation and amortization to be in the range of $4.5 billion to $7 billion this year, down from $9.57 billion recorded in 2025, the company said in a statement on Thursday. Analysts on average estimated $5.76 billion. 

Maersk shares fell as much as 8.1% as trading started in Copenhagen, the most in three weeks.

The 2026 guidance is based on a gradual reopening of the Red Sea, which will free up global vessel capacity. The container line industry had benefited from the extra transport time needed to sail the long route south of Africa, which effectively lowered capacity worldwide by 7-8% at a time of fierce competition among shipowners for cargo.

“We expect more and more services to go through the Red Sea again, which will free further capacity and we expect this will create a pricing environment that will be under pressure for the shipping division,” Chief Executive Officer Vincent Clerc said in an interview on Bloomberg TV. “We have quite a lot of opportunities on cost, to do more” as “we head into this down cycle on shipping.” 

Maersk is planning to cut 1,000 jobs, equivalent to 15% of roles in its corporate functions, but under 1% of total workforce. Annual cost cuts will be $180 million, the company said. There will be a “very sharp focus on productivity,” including use of artificial intelligence applications, Clerc said.

Global container trade will grow 2-4% this year, Maersk forecast, saying it expects to grow in line with that market.

The shipping line also said it’ll start a share buy-back program of as much as 6.3 billion kroner ($1 billion) to run over the next 12 months.

Danske Bank A/S credit analyst Brian Borsting said of Maersk’s financial guidance that “the low end of the range should be possible even with a full re-opening of the Red Sea.”

In December, Maersk made the first transit in almost two years through the Bab el-Mandeb Strait after attacks from Yemen-based Houthis had faded. 

Container rates out of Shanghai have dropped more than 40% since a June peak and are set to weaken even further in coming weeks, according to Bloomberg Intelligence. At the same time, the world’s five largest container lines have vessels on order to come in over the next years with a combined capacity of nearly 7 million standard 20-foot containers — about 20% of the current global fleet — according to industry consultant Alphaliner.

In the fourth quarter, Ebitda nearly halved to $1.84 billion compared to the same period last year, Maersk said. Revenue dropped almost 9% to $13.33 billion. —BLOOMBERG

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