Sprawling international banking conglomerate HSBC Holdings(NYSE: HSBC) pleased the market with its first quarterly-earnings report of 2024, although the company's CEO shocked some with a surprise resignation.
Both of these developments occurred well before market open Tuesday. Investors reacted to them by trading the company's U.S.-listed American depositary receipts (ADRs) up by more than 3.3% across the day. That contrasted well with the S&P 500 index's 1.3% slide.
A convincing top-line beat and a resignation
Taking the earlier of those two big news items first, HSBC announced that CEO Noel Quinn informed the bank's board of directors that he is stepping down after a five-year stint in the position. His date of departure hasn't been set; the company said he will continue in the role while the board goes through the process of finding a successor. It said it will consider both internal candidates and outsiders for the job.
HSBC's first-quarter results were unveiled just after that, revealing that the bank earned revenue of $20.8 billion, or 3% higher year over year. Net income, when adjusted for certain one-time or extraordinary items, fell to $6.3 billion ($0.34 per ADR) from the year-ago profit of slightly over $7 billion.
That top-line figure well exceeded the average-analyst estimate of $16.7 billion. Estimates for adjusted-net income were not available.
Shareholder returns
HSBC also declared an interim dividend of $0.10 per ADR, plus a special dividend totaling $0.21 per ADR from the recent sale of its Canadian assets. Bolstering these shareholder-pleasing measures, it also announced its intention to launch a new stock-repurchase program of up to $3 billion.
The two dividends will be paid in June; the company did not get more precise about timing, nor did it specify an ex-dividend date or dates. It plans to begin the share-buyback initiative after its annual general meeting in May.
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HSBC Holdings is an advertising partner of The Ascent, a Motley Fool company. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool recommends HSBC Holdings. The Motley Fool has a disclosure policy.
