Markets Defused aims to present an easy-to-understand and straightforward recap of the week’s most engaging stock market news
- Apple impressed Wall Street, Cook promises AI growth
- Sony stepped in with $26bn bid to buy Paramount
- Ozempic and Wegovy gave more record results at Novo Nordisk
- Goldman Sachs ready to boost banker bonuses in London
- Qualcomm optimistic about future smartphone sales
- AMD fell short of high expectations
- Starbucks revenues disappointed
- Amazon’s beat expectations
Apple financials impressed Wall Street, Cook promises AI growth
Apple Inc (NASDAQ:AAPL, ETR:APC) investors welcomed the iPhone maker’s latest earnings report on Thursday, buying up the shares following Thursday’s report.
Revenues came in ahead of Wall Street expectations for Apple’s first quarter driven by demand in its services businesses – iCloud, Apple TV+, and Apple Music – whilst iPhone sales declined. iPhone sales were down 10% decline, totalling $45.9 billion compared to $51.3 billion this time last year. In particular, Chinese iPhone sales fell more significantly.
Nevertheless, Apple’s total revenue amounted to $90.8 billion which was down slightly compared to the same quarter last year but was comfortably better than Wall Street analysts had forecast.
Apple meanwhile said it was rewarding shareholders via a massive $110 billion stock buyback plan.
Alongside the financial results chief executive Tim Cook promised more details about Apple’s AI initiatives and upcoming product launches, including new iPads, at the company’s upcoming Worldwide Developers Conference which is scheduled for 10 June 2024.
Glencore to rival BHP for Anglo American
Glencore PLC (LSE:GLEN) is the new name in the frame to buy Anglo American PLC (LSE:AAL), according to a Reuters report on Friday, claiming the other big miner in London could be about to table an offer.
It comes after BHP Group's (LSE:BHP, ASX:BHP) unsuccessful $39 billion offer later week.
BHP is also reportedly preparing a new improved offer.
Meanwhile, in London trading Anglo American shares ticked higher at the end of the week.
Sony stepped in with $26bn bid to buy Paramount
Paramount Global (NASDAQ:PARA) potential takeover story took a fresh turn on Thursday as Sony and a private equity investor stepped in with the latest bid, pitched at $26 billion.
Sony Pictures and Apollo Global Management (NYSE:APO) made the cash offer to rival the existing negotiations with Skydance Media. It could become a significant move for Sony and the broader entertainment industry.
The move marks Sony’s ambition to expand its catalogue of content IP, and significantly via Paramount+ the potential acquisition would give Sony its first foothold in the streaming sector.
The offer was described in reports as a starting point for negotiations.
Shell reloaded $3.5bn share buybacks as financials held up
Shell PLC (LSE:SHEL, NYSE:SHEL) said on Thursday that its next round of share buybacks would total $3.5 billion, thanks to better-than-expected quarterly financial results.
The UK-listed oil supermajor reported $7.7 billion of adjusted earnings for the first three months of 2024, down 10% year-over-year but significantly ahead of market expectations pitched at $6.25 billion.
The business generated $9.8 billion of free cash flow in the period, up from $6.9 billion in the preceding one.
Chief executive Wael Sawan called it "another quarter of strong operational and financial performance".
Having completed the $3.5 billion share buyback announced at the last results, Sawan announced another of the same size that is expected to be completed by the time of half-year results.
Ozempic and Wegovy gave more record results at Novo Nordisk (NYSE:NVO)
Novo Nordisk (NYSE:NVO) on Thursday reported a strong financial performance at the start of 2024, driven by rampant demand for weight-loss and diabetes drugs Wegovy and Ozempic.
The company said its first-quarter sales were up 24% and pre-tax profit was up 29%. It highlighted that it is adding around 27,000 new Wegovy patients each week in the United States.
Looking to the rest of the year, the company upgraded its forecast for full-year profit to £15.3 billion.
Novo Nordisk (NYSE:NVO) is presently the most valuable company in Europe.
Goldman Sachs ready to boost banker bonuses in London
London-based bankers working for Goldman Sachs (NYSE:GS, ETR:GOS) as set for a windfall year, as the American bank removed its cap on bonus pay. Goldman on Thursday announced the removal of the bonus cap for its London-based staff and as a result, its top earners will be able to receive up to 25 times their base salary in bonuses.
The bank said this will align its UK bonus structure with its global practices.
Previously, EU rules had prevented bonus above 100% of salary, extendable up to 200% with shareholder approval. The restriction was intended to curb excessive risk-taking following the financial crisis.
Qualcomm is optimistic about future smartphone sales
Smartphone processor maker Qualcomm Inc (NASDAQ:QCOM, ETR:QCI) has told investors on Wednesday that its optimistic about sales in its next quarter, after its previous quarter beat Wall Street expectations.
Qualcomm reported net income of $2.33 billion, up from $1.7 billion this time last year, whilst revenue increased modestly to $9.39 billion from $9.28 billion. Handset sales grew by only 1%, to $6.18 billion though sales in the ‘Internet-of-Things’ sector were down 11% in year-on-year comparisons, to $1.24 billion.
Looking forward, Qualcomm was optimistic about the next quarter, projecting revenues between $8.8 billion and $9.6 billion.
AMD financials fell short of high expectations
Microchip maker Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD) saw its shares drop on Wednesday after its reported 80% jump in datacenter revenue wasn’t enough to offset otherwise disappointing financial results for investors.
First-quarter earnings for 2024 were well short of what Wall Street commentators now call “high expectations”. AMD’s datacenter chips performed well, with revenues up 80% to $2.4 billion driven by strong demand thanks to AI cloud computing.
At the same time, however, the gaming segment experienced a 48% decline in revenue, to $922 million, whilst its embedded chip segment similarly saw a decrease of 46%, to $846 million.
GSK’s first quarter got a vaccine boost
GSK PLC (LSE:GSK, NYSE:GSK) confirmed on Wednesday that its vaccines business was performing well – as strong sales of jabs for shingles and the cold-like condition called RSV had driven better-than-expected numbers from the pharma giant.
The UK-listed pharma giant said it had increased its full-year profit outlook and it now anticipates higher sales in the first half of the year.
It upgraded its annual earnings growth forecast from 6%-9% to 8%-10%, and moved 2024 sales forecast towards the higher end of the previously estimated 5% to 7% range.
Starbucks stock dropped as revenues disappointed
Starbucks Corp (NASDAQ:SBUX, ETR:SRB) shares fell late on Tuesday after the global coffee-shop chain reported a big drop in revenue and profit.
The second quarter results disappointed Wall Street as the Seattle-headquartered coffee giant saw a 4% drop in same-store sales, alongside a 6% decline in foot traffic to its outlets. Group revenue was down nearly 2% to $8.56 billion, significantly below Wall Street estimates of $9.13 billion.
Starbucks said net income for the quarter was $772 million, equating to 68 cents per share, and it was down 15% from this time last year. Wall Street forecasts expected 79 cents per share.
Laxman Narasimhan, Starbucks’ chief executive, told investors that the results ” do not reflect the power of our brand, our capabilities, or the opportunities ahead”.
Instead, he blamed “a highly challenging environment”.
Amazon’s latest profit beat expectations
Amazon.com Inc (NASDAQ:AMZN) shares traded higher after Tuesday’s stock market close after the e-commerce giant reported first-quarter earnings that surpassed Wall Street forecasts.
The company’s revenues for the quarter stood at $143.3 billion, up from $127.4 billion this time last year. It was driven by its cloud computing business Amazon Web Services (AWS) which, boosted by demand for AI services, increased revenues by 17% to $25 billion.
Amazon also put the spotlight on its $4 billion investment in Anthropic, an AI company developing a rival to OpenAI’s ChatGPT.
Amazon reported net income if $10.3 billion for the quarter, up massively from the $3.2 billion achieved for the same period in 2023.