Smartkarma Daily Briefs

• Press reports suggest that a merger between GoTo Gojek Tokopedia and Grab is back on the table, which is ironic given the progress of both companies towards profitability. 
• Any merger may encounter anti-trust issues in Indonesia, with some fallout for drivers and potentially merchants, which may encounter resistance from the government and even potential demonstrations but not insurmountable.
• Grab should book a net profit in 2025 plus higher growth, as its barbell strategy gains traction, but a GoTo merger could move the dial towards much higher profitability.

• IWG is the largest co working flex office company in the world, with brands like Regus, Spaces, HQ signature and The Lights
• The company has been profitable and has grown through a capital light strategy of managed and franchise models
• The stock is currently undervalued, with potential for significant growth in earnings and free cash flow from the managed business in the upcoming years

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• Northrop Grumman reported its fourth-quarter and full-year 2024 financial results, showcasing both achievements and challenges.
• The company ended the year with a record backlog of approximately $91.5 billion and a book-to-bill ratio of 1.23x, indicating strong demand in both domestic and international markets.
• This demand is supported by new contract wins, such as the TACAMO program and the B-21’s second LRIP Lot, as well as ongoing programs like Poland’s IBCS system, which contributes to an international book-to-bill ratio of 1.4x.

• United Parcel Service, Inc. (UPS) delivered a mixed fourth-quarter 2024 performance, reflecting strategic operational adjustments and market challenges.
• Highlighting a slight revenue growth with significant profit and margin expansion, UPS navigated the complexities of a shifting logistics landscape while undergoing significant operational transformations.
• UPS reported a consolidated revenue increase of 1.5% year-over-year to $25.3 billion for Q4 2024.

• Revenue reached JPY184.3bn (+2.7% YoY) and operating profit JPY12.9bn (+20.1% YoY), driven by strong new housing sales.
• Cumulative Q3 revenue achieved 77.1% of FY03/25 forecast, with operating profit at 88.8% and net income at 93.3%.
• New housing complex market revenue grew 12.0% YoY, while remodeling market revenue declined 5.2% YoY.

• In cumulative Q3 FY03/25, orders were JPY155.9bn (-0.7% YoY), revenue JPY160.8bn (+36.9% YoY), net income JPY7.3bn.
• Revenue increased due to higher sales in plant equipment, lithium-ion battery manufacturing, and molding machines, boosting operating profit.
• Orders and revenue rose in automotive, medical device, and airline equipment sectors, leading to significant operating profit growth.

• Caterpillar Inc.’s performance for the fourth quarter and the entire year of 2024 demonstrates a mixed set of outcomes, underscoring both the strengths and challenges faced by the company.
• The diversified nature of its end markets and its sustained focus on long-term strategic goals have been pivotal in maintaining a relatively stable financial position despite a decrease in top-line results.
• Positively, Caterpillar reported a record adjusted profit per share for the year at $21.90, a 3% increase over 2023, and achieved an adjusted operating profit margin of 20.7%.

• Parker-Hannifin Corporation recently reported its fiscal 2025 second-quarter results, showcasing both commendable achievements and areas for improvement.
• The company demonstrated strong operational excellence despite facing some top-line pressures and a slightly challenging market environment.
• Notably, Parker-Hannifin achieved record second-quarter adjusted segment operating margins of 25.6%, marking a 110 basis point improvement year-over-year.

• Roper Technologies delivered a strong financial performance in the fourth quarter and full year 2024, characterized by significant revenue and cash flow growth.
• For the year, the company achieved a 14% revenue increase, driven by equal contributions from organic expansion and strategic acquisitions.
• Roper demonstrated robust cash flow generation with a 16% year-over-year increase in free cash flow, reaching over $2 billion, while maintaining impressive free cash flow margins of 32%.

• Revenue reached JPY47.2bn (+5.6% YoY), operating profit JPY2.0bn (+6.7% YoY), recurring profit JPY2.6bn (-5.5% YoY).
• Revenue for construction materials was JPY19.1bn (+16.0% YoY), segment profit JPY1.9bn (-5.9% YoY) due to higher costs.
• Revenue for low-power radios was JPY3.7bn (-7.2% YoY), segment loss JPY444mn due to lower sales and higher expenses.