Markets Defused aims to give an easy-to-understand and straightforward recap of the week’s most engaging stock market news.
- BP profits fell short of market expectations
- Disney reported first profit for streaming
- Novavax stock price doubles on deal with Sanofi
- Air-fryer firm SharkNinja is still seeing strong demand
- ITV is looking forward to a Euro 2024 boost
- Hipgnosis takeover saga is coming to an end
- Robinhood financials were boosted by crypto trading
- Peloton stock rallied on takeover talk
BP profits fell short of market expectations
London-listed oil major BP PLC (LSE:BP.) on Tuesday reported first-quarter profits below market expectations, with its profitability marker coming in at $2.72 billion versus a forecasted $2.87 billion. It compares to $4.96 billion for the same quarter last year.
BP blamed weaker oil prices at the start of the year for the ‘miss’, and it also pointed to lower output due to an outage at a refinery in Indiana.
The oil company said it would now seek to make $2 billion of cost cuts.
BP still managed to generate some $5 billion of ‘surplus’ cash flow.
Shareholders, meanwhile, will continue to be supported by BP’s continuing share buy-back program which will see another $1.75 billion spent purchasing the oiler’s stock up until the end of July.
Disney reported first profit for streaming
Also on Tuesday, Walt Disney Co (NYSE:DIS, ETR:WDP) financial revealed its first profit in its streaming business unit, but ‘linear’ TV was more of a problem.
Disney told investors that its streaming business was now turning a profit for the first time, helped by Aussie kids TV phenomenon ‘Bluey’ (which is the most watched thing on Disney+ worldwide).
The Disney+ and Hulu subscription streamers made a $47 million profit for the second quarter, compared to a $587 million loss this time last year.
Nevertheless, Disney’s wider entertainment and sports broadcasting business fell short of stock market’s revenue forecasts. The division brought in $9.79 billion of revenue which was down 5% versus the same period last year. It was also below Wall Street predictions of $9.93 billion.
The disappointing return was the result of falling revenues in ‘linear’ TV businesses and as Disney’s light movie slate underwhelmed.
Disney’s ‘Experiences’ business division – which comprises its theme parks and vacation businesses -saw a 9% improvement in revenue, generating $8.39 billion. Specifically, it was driven by a strong performance for Florida’s Walt Disney World Resort and the Disney Cruise Line.
The theme parks benefitted from improved attendance and higher guest spending.
Novavax stock price doubles on deal with Sanofi
Novavax, Inc. (NASDAQ:NVAX) stock more than doubled on Friday, soaring 120%, after it landed a $1.4 billion deal with Sanofi for a new COVID-19 and flu shot. The contract will see Novavax and Sanofi commercialize a combined vaccine.
Previously, in late 2023, Novavax was facing concerns it may fall into bankruptcy due to declining sales for its COVID vaccine.
Under its new contract with Sanofi, the company will receive $500 million upfront and another $700 million comes in future payments tied to the development, launch and sales milestones for the combi-jab.
Before the news, Novavax had a market capitalization of just under $630 million. Then, in New York on Friday, Novavax stock was up $5.35 or 119.35% changing hands at $9.81, giving the company a market value of $1.40 billion.
The news comes just days after AstraZeneca revealed it was retiring its COVID vaccine amid waning demand versus competitor jabs.
Air-fryer firm SharkNinja is still seeing strong demand
SharkNinja (NYSE:SN) impressed Wall Street on Thursday with its first-quarter financials. At $1.07 billion revenue for the three month period was up more than 24% from the same period last year, and it was comfortably ahead of the $918 million forecast by analysts.
The company, which also sells a range of popular household gadgets, told investors that its 'food preparation appliances’ businesses had experienced a 74% uptick in sales compared to last year.
Chief executive Mark Barrocas described it as “a strong start to 2024”.
“We are gaining share in our existing product categories and geographies, we have a robust pipeline of innovative products in new categories, and we see significant opportunity to grow in international markets,” Barrocas said. “Based on the strength of our performance so far, we are raising our full year outlook.”
ITV is looking forward to a Euro 2024 boost
ITV PLC (LSE:ITV) appears to be following the broader trend for so-called ‘legacy’ media, with the British broadcaster seeing growth online but tough trading in its traditional TV business.
The TV company on Wednesday reported a 7% decline in first-quarter revenue, which amounted to £887 million. The company’s streaming platform, ITVX, grew its audience by some 16% when counted in ‘streaming hours’, and it also saw a 14% improvement in digital advertising revenue.
ITV is now focussing its attention on cost-cutting, whilst pinning hopes on England and the upcoming European football championship in June – the idea is that on-pitch success for Gareth Southgate’s England team will translate into a feel-good summer spending spree for advertisers.
It is among the rare times that ‘terrestrial’ TV broadcasters are able to capture live football audiences, ITV may be set for significantly higher viewership as it splits the 51-game tournament with the BBC.
Hipgnosis takeover saga is coming to an end
The Hipgnosis Songs Fund Limited (LSE:SONG) takeover saga appears to be reaching a conclusion, with the Blackstone investment group now expected to take the spoils. It comes after it was announced today that rival bidder Concord would not increase its previous offer, which was pitched at $1.25 per share.
Blackstone higher $1.30 per share bid should therefore be sufficient to capture Hipgnosis, which holds the rights to a catalogue of pop and rock artists including Ed Sheeran, Lady Gaga and Fleetwood Mac.
It looks set to give investors a welcome exit after several months of uncertainty and volatility.
Robinhood financials were boosted by crypto trading
Robinhood Markets Inc (NASDAQ:HOOD), operator of the stock and Bitcoin trading app, saw its shares on the rise in Wednesday’s late deals after reporting upbeat financials for its first quarter.
The performance comes amidst a recent revival in Bitcoin and cryptocurrency markets, as well as soaring investor interest in the top-tier tech stocks. These stocks, the so-called ‘Magnificent Seven’, comprise Nvidia, Meta, Tesla, Amazon, Google-parent Alphabet, Microsoft and Apple.
At the same time US stock benchmarks have also been pushing record highs, and the gold price has seen all-time record levels.
It is against this backdrop that Robinhood, an app that’s very popular with ‘retail’ investors, reported record quarterly revenue of $618 million, with crypto trading accounting for some $126 million of the tally.
Robinhood reported net income of $157 million for the quarter, versus a $511 million loss for the same period a year ago. On a per share basis, it equated to 18 cents.
The company comfortably beat Wall Street forecasts for the quarter, which were pitched at $549 million for group revenue and just 6 cents per share earnings.
Peloton stock rallied on takeover talk
Fitness-tech firm Peloton Interactive Inc (NASDAQ:PTON) spiked more than 15% higher on Tuesday off the back of a rumoured private-equity powered takeover. Talks have taken place between Peloton and at least one private-equity group, that was according to a report by US financial media firm CNBC.
Peloton last week launched a cost-cutting program aiming to take $200 million of spending out the business.
At the same time, it announced the exit of Barry McCarthy who as chief executive oversaw the company lose around 90% of its market value.