Markets Defused is an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- Verizon’s financials shy of expectations, albeit improved
- Reddit boosted as it teams up with US sports leagues
- Ryanair shares hit as it warned of softer summer fares
- Ocado landed a new robot tech deal
- Rentokil traded up on a takeover rumour
Verizon’s financials shy of expectations, albeit improved
Verizon Communications Inc (NYSE:VZ, ETR:BAC) stock price dropped back, losing around 6.66%, after the telecoms operator reported second-quarter revenue of $32.8 billion, slightly short of the $33.0 billion that Wall Street analysts predicted.
Nonetheless, Verizon added 148,000 net retail phone subscribers, marking a significant improvement on the 68,000 subscriber loss in the preceding quarter.
The broadband business gained 391,000 subscribers, up to 11.5 million.
The company highlighted success with its ‘flex’ plans – which allow customers to ‘pick ‘n’ mix’ services depending upon their budget.
“Our industry-leading network serves as a catalyst for how our millions of customers live their lives, and serves as the backbone for new and emerging technologies,” Verizon chief executive Hans Vestberg said in a statement.
“We continue to build and expand on our strengths and successes with new products and services, and we are confident that this upward momentum will position us for future growth."
Back to the financials, however, Verizon reported net income of $4.7 billion for the quarter, down from $4.8 billion in the previous year. Earnings (adjusted EBITDA) per share came in at $1.15, in line with expectations.
In New York, Verizon shares were down $2.73 or 6.56% changing hands at $38.89.
Reddit (NYSE:RDDT) boosted as it teams up with US sports leagues
Reddit (NYSE:RDDT) shares traded higher, up more than 5%, with the buzz of a new brand partnership with America’s largest sports leagues - the NFL, NBA, MLB, PGA Tour, and NASCAR.
The social media company, in a statement, said the partnerships will see exclusive video content including highlights, behind-the-scenes footage, and player ‘AMAs’.
On the platform the aim is to boost user engagement, meanwhile, on the business side, the collaborations aim to attract more advertising revenue.
It follows a test with NFL content, which found an improved purchase intent, brand favorability, and awareness among users.
“Reddit is the go-to destination for sports fans around the world because it’s the place where they can dive deeper than anywhere else, and connect with other fans beyond the season and throughout the year,” Reddit’s chief operating officer Jen Wong said in a statement.
“The country’s major sports leagues see the opportunity to reach global audiences on Reddit.
“We’re continuing to build more ways for businesses and organizations to engage with Reddit’s communities; this benefits our communities, program partners, and advertisers.”
In New York, Reddit stock was up $3.49 or 5.4% changing hands at $68.19.
Ryanair shares hit after it warned of softer summer fares
Ryanair Holdings PLC (LSE:RYA) New York listed shares plummeted nearly 20% in Monday’s trade, as Europe’s leading budget airline reported disappointing financials and warned of a softening of air fares this summer.
The airline’s first quarter profit fell by 46% to €360 million, as average fares declined 15% to €41.93.
Lower fares took a substantial bite out of Ryanair’s margins, given that passenger numbers actually increased to 55.5 million.
Moreover, it warned that fares for the summer season will be significantly lower than last year.
Ryanair highlighted its need for increased discounting, as consumers were increasing cautious and cost conscious.
On the other side of the airline’s ledger, operating costs rose by 11% as higher wages more than offset recent savings on fuel costs.
Besides the softer fares, Ryanair also noted the recent operational impacts of last week’s global IT outage – caused by the Crowdstrike / Microsoft software update – and also air traffic control strikes in France.
Chief executive Michael O'Leary, meanwhile, told investors that Ryanair’s performance over the rest of the summer would be highly dependent on last-minute bookings, particularly in August and September.
In a statement, the airline added: “As is normal at this time of year, we have almost zero Q3 and Q4 visibility, although Q4 will not benefit from last year’s early Easter.
“It is too early to provide meaningful FY25 PAT guidance, although we hope to be able to do so at our H1 results in Nov.”
In New York, Ryanair shares were down $20.81 or 18.2% changing hands at $93.51.
Ocado landed a new robot tech deal
Ocado Group PLC (LSE:OCDO) shares started the week on the front foot, up 10%, with the news of a new technology partnership – as the grocer-come-automations-specialist inked a deal with American supermarket chain Kroger.
The London-listed firm, which in the UK is partnered with Waitrose, will now supply its order automation technologies to Kroger customer fulfillment centers.
It will include Ocado's ‘on-grid’ robotic pick service, robotic arms for packing groceries into bags, and automated frameload systems for dispatching orders.
All these technologies enable the automated picking and packing of online customer orders, and reduces the number of warehouse staff and the timelines needed to fulfil grocery orders.
"We are delivering a step-change in warehouse automation and new levels of efficiency to our partners as global supply chains are under significant pressure to manage higher volumes and greater complexity, as well as challenges in labor cost and availability,” Ocado chief executive Tim Steiner said in a statement.
The move comes after Ocado successfully implemented similar technologies with Japanese retailer Aeon.
In London, Ocado shares climbed more than 37p, or 9.97%, to trade at 415.8p.
Rentokil traded up on a takeover rumour
Rentokil Initial PLC (LSE:RTO) shares advanced on Monday on reports that former BT Chief Executive Philip Jansen is attempting to acquire the pest control business, supported by private equity money.
The company's shares rose to 497.60 pence, returning to levels last seen in March.
Jansen is seeking to become Rentokil's chairman, according to a weekend report by The Sunday Times.
In terms of game plan, the report suggests he will aim to address integration issues with North American business Terminix, acquired by Rentokil in 2022, and pursue further acquisitions in the US.
A potential deal could value Rentokil at approximately £15 billion ($19.37 billion), which would be a 30% takeover premium.
Private equity firms including Bain Capital, CVC, and Advent were said to be involved.
Terminix represents around 30% of US market share, but Rentokil has struggled to integrate the two businesses, and in late 2023 it issued a profit warning.
In London, Rentokil shares were up 39p or 8.7% changing hands at 487.1p on Monday.
The price remains some 24% lower over the past twelve months, however.