Bright spots emerge in corporate earnings as tariff uncertainty lingers

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4 days ago

Alphabet, SK Hynix, Infosys offer upbeat guidance
Rosy forecasts come against backdrop of tariff uncertainty
Governments scramble for tariff deals ahead of August 1 deadline
July 24 (Reuters) - Some of the world's top tech firms, including U.S. search giant Alphabet, South Korean chipmaker SK Hynix and Indian IT services provider Infosys, have provided upbeat guidance in their latest earnings reports, shrugging off an uncertain U.S. trade policy.
Corporate operations have been overshadowed by erratic U.S. trade action that has upended supply chains and left firms to navigate fluid tariffs on top of broader economic uncertainties such as regulatory change and currency fluctuation.
But tech titans Alphabet, SK Hynix and Infosys - which all reported earnings that beat market forecasts - predicted brighter days to come, with Alphabet and SK Hynix both flagging plans to boost spending.
Nvidia supplier SK Hynix booked record quarterly profit, boosted by strong demand for artificial intelligence chips and customers stockpiling ahead of potential U.S. tariffs.
Indian IT services provider Infosys raised the floor of its annual revenue forecast range to 1% to 3%, from flat to 3%, matching analyst expectations.
Among the major earnings on Thursday, Nestle, Reckitt, Roche and Wizz report before local markets open.
The upbeat guidance amounted to a bright spot in a turbulent second-quarter earnings season that has so far seen businesses as varied as chipmakers and steelmakers report downbeat results.
Companies have reported over July 16-22 a combined full-year loss of as much as $7.8 billion, with the automotive, aerospace and pharmaceutical sectors being hurt most by tariffs.
General Motors said tariffs knocked $1.1 billion from second-quarter earnings.
On Wednesday, Tesla Chief Executive Elon Musk said U.S. government cuts in support for electric vehicle makers could lead to a "few rough quarters", as his firm reported its worst quarterly sales decline in over a decade.
News that the U.S. had struck a deal with Japan to lower new tariffs on auto imports and spare it punishing levies on other goods lifted Asian and European stock markets on Wednesday. It stirred hope for a similar deal with the European Union ahead of August 1, when the U.S. said new tariffs will go into effect.
The European Union is moving toward a trade deal that could include a 15% U.S. baseline tariff on EU goods and possible exemptions, two European diplomats said.
One surprise on Thursday was South Korea's finance ministry saying tariff negotiations had been postponed due to a scheduling conflict for U.S. Treasury Secretary Scott Bessent.
The announcement cast fresh doubt about whether South Korea would be able to avert U.S. import duties that could hit some of its major exporting industries.
All eyes are on Washington as governments scramble to close trade deals ahead of next week's deadline that the White House has already pushed back under pressure from markets and intense lobbying by industry.
While the Japan deal has eased investor worry, the threat of higher tariffs on other large economies remains, including the European Union, Canada and Brazil.
An EU-China summit on Thursday will test European resolve and unity as the bloc faces trade pressure from both China as well as the United States, while U.S. Treasury Secretary Scott Bessent meets Chinese officials in Sweden next week. (Reporting by Reuters Newsroom; Writing by Anne Marie Roantree; Editing by Christopher Cushing)