European Economics Preview: Eurozone Economic Confidence Data Due

Economic confidence data from euro area is due on Thursday, headlining a busy day for the European economic news.

At 2.00 am ET, retail sales from Norway and economic confidence from Turkey are due. Economists forecast Norway retail sales to grow 1.1 percent on month in January.

At 3.00 am ET, the National Institute of Economic Research publishes Sweden’s economic tendency survey results.

In the meantime, flash inflation from Spain and unemployment from Hungary are due. Spain’s inflation is forecast to remain unchanged at 1.1 percent in February.

Half an hour later, Statistics Sweden publishes retail sales, foreign trade and producer prices for January. Economists forecast sales to drop 0.9 percent on month, in contrast to a 0.5 percent rise in December.

At 4.00 am ET, the European Central Bank releases euro area private sector credit data. M3 money supply is forecast to grow 5.3 percent annually in January.

At 5.00 am ET, the European Commission is slated to publish monthly economic and business confidence survey results. The euro area economic confidence index is forecast to fall to 102.6 in February from 102.8 in January. The business climate index is seen at -0.28 versus -0.23 in January.

Stock Alert: LHC Group Down 11%

Shares of LHC Group, Inc. (LHCG) are sinking more than 11% Thursday morning after the healthcare provider’s first-quarter outlook fell short of estimates.

Fourth-quarter earnings, however, came in better-than-expected.

Net income in the fourth quarter was $21.8 million or $0.70 per share, an increase from $20.55 million or $0.66 per share in the comparable quarter last year.
Excluding items, adjusted EPS of $1.15 beat average estimate of 11 analysts polled by Thomson Reuters at $1.13.

Net service revenue increased 4.2% year-on-year to $531.3 million.

For the first quarter, net service revenue is expected to be in the range of $500 million to $510 million and earnings per share is expected to be in a range of $0.70 to $0.80. Analysts see earnings of $0.97 on revenue of $539.28 million.

Full-year 2020 net service revenue is expected to be in a range of $2.13 billion to $2.18 billion and earnings per share is expected to be in a range of $4.60 to $4.80. Analysts have a consensus estimate for revenue of $2.24 billion and for earnings of $4.74.

LHCG is currently at $133.21. The stock has been in a range of $98.41- $159.48 in the past one year.

PayPal expects coronavirus to negatively impact revenue by 1 percentage point

PayPal Holdings Inc. PYPL, -0.50% expects the coronavirus to have a negative revenue impact of 1 percentage point for the March quarter, the company disclosed in a release Thursday morning. PayPal currently expects revenue for the quarter to fall toward the low end of its previously issued forecast of $4.78 billion to $4.84 billion. "Stronger performance quarter-to-date across our diversified business is partially offsetting this one percentage point negative impact," PayPal said in its release. The company left its earnings outlook unchanged. Fellow payments giant Mastercard Inc. MA, -1.60% lowered its forecast earlier this week, while Square Inc. SQ, -0.60% said Wednesday that it didn’t expect a "material impact" in the first quarter as a result of the outbreak. PayPal shares are off 1% in premarket trading Thursday, and they’ve lost 5.3% over the past month as the S&P 500 SPX, -0.38% has dropped 3.9%.

U.S. Leading Economic Index Climbs Much More Than Expected In January

Indicating the current economic expansion will continue through the first half of 2020, the Conference Board released a report on Thursday showing a much bigger than expected increase by its reading on leading U.S. economic indicators.

The Conference Board said its leading economic index climbed by 0.8 percent in January after falling by 0.3 percent in December. Economists had expected the index to rise by 0.3 percent.

The bigger than expected rebound by the index reflected a sharp drop in initial jobless claims, increasing housing permits, an improvement in consumers’ outlook on the economy and positive contributions from financial indicators.

“The LEI’s six-month growth rate has returned to positive territory, suggesting that the current economic expansion – at about 2 percent – will continue through early 2020,” said Ataman Ozyildirim, Senior Director of Economic Research at the Conference Board.

He added, “While weakness in manufacturing appears to show signs of softening, the COVID-19 outbreak may impact manufacturing supply chains in the US in the coming months.”

The report also said the coincident economic index inched up by 0.1 percent in January after showing no change in December.

Meanwhile, the lagging economic index came in unchanged in January after edging down by 0.1 percent in the previous month.

U.S. grants sanctions waiver for humanitarian aid to Iran

WASHINGTON (Reuters) – The United States on Thursday granted a license to allow for certain humanitarian trade transactions with Iran’s sanctioned central bank, a move it said was in step with the formalization of a Swiss humanitarian aid channel.

The newly created channel, which the U.S. Treasury Department said became fully operational on Thursday as it granted the license, would allow for companies to send food, medicine and other critical supplies to Iran.

Why Square Is Surviving Thursday’s Market Carnage

When Square Inc. (NYSE: SQ) released fourth-quarter financial results after markets closed Wednesday, the mobile payment company said that it had $0.23 in earnings per share (EPS) and $1.31 billion in revenue. The consensus estimates had called $0.21 in EPS and $1.186 billion in revenue, and the same period of last year reportedly had EPS of $0.14 on $933 million in revenue.

During the most recent quarter, gross payment volume (GPV) increased 25% year over year to $28.6 billion. The GPV from larger sellers grew 33% year over year and accounted for 55% of total GPV, up from 51% in the fourth quarter of 2018.

Transaction-based revenue was $832 million, up 25% year over year, and transaction-based profit was $313 million, up 27%.

Subscription and services-based revenue totaled $281 million in the fourth quarter, up 45% year over year. Also, subscription and services-based gross profit came to $231 million, up 63% in the same period. Hardware revenue was $22 million, up 23% year over year, and hardware generated a gross loss of $18 million.

Looking ahead to the first quarter, the company expects to see EPS in the range of $0.16 to $0.18 and revenue between $1.34 billion and $1.36 billion. Consensus estimates call for $0.16 in EPS and $610.26 million in revenue for the quarter.

Square stock traded up about 6% at $81.06 Thursday morning, in a 52-week range of $54.41 to $87.25. The consensus price target is $76.22.