Markets Defused is an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- Disney's waning theme parks overshadowed first streaming profit
- Meta bond sale raised $10.5bn for AI investment
- Legal & General shares nudged up by unspectacular first half
- Novo Nordisk’s quarter failed to meet high expectations
- Lyft stock dropped on bookings disappointment
- Shopify's AI tools brought more merchants to platform
- WPP shares snipped lower, no growth expected this year
- Vodafone boosted by half a billion buyback
Meta bond sale raised $10.5bn for AI investment
Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB) has raised $10.5 billion in a bond sale as the Facebook, Whatsapp and Instagram owner continues investing to underpin its artificial intelligence strategies.
It has sold high-grade, long-dated debt into the market. The securities are split into multiple parts, with the longest dated debt among them given a 40-year maturity.
Proceeds from the bond sale would be used to support general corporate purposes, according to reports citing a source familiar with the matter.
This is Meta’s latest bond funding, following an $8.5 billion raise in 2023 and a $10 billion raise in 2022.
Meta meanwhile had some $58.1 billion in cash at the end of June.
In New York, Meta stock traded around $5.17 or 1% lower to $488.92.
Disney's waning theme parks overshadowed first streaming profit
Walt Disney Co (NYSE:DIS, ETR:WDP) shares traded lower with the ails of the theme park business overshadowing the first-ever profit for the media conglomerate’s streaming division.
Streaming - comprising Disney+, Hulu, and ESPN+ - contributed some $47 million to the second quarter’s operating income tally, Disney revealed in Wednesday's earnings statement. These three platforms, which in some territories are bundled and sold altogether, generated a total of $6.4 billion of revenue in the quarter which marked a 15% improvement year-over-year.
Notably, it comes less than a day after reports that Disney was preparing to hike subscription prices across these services.
The Disney World and Disney Land theme parks marked a 6% decline in operating profit, with the company noted weaker consumer demand, and, said it could persist in coming quarters.
Group revenue overall amounted to $23.16 billion, ahead of Wall Street analyst expectations of $23.07 billion. Earnings (adjusted) per share came in at $1.39, also a beat, exceeding estimates of $1.19.
Looking ahead, Disney is expecting the streaming profitability to continue improving in the fourth quarter. Disney raised its full-year adjusted earnings growth projection to 30%, up from a previous estimate of 25%.
In New York, Disney stock was down $3.07 or 3.4% changing hands at $86.89.
Lyft stock dropped as outlook for bookings disappointed
Lyft (Lyft Inc (NASDAQ:LYFT)) stock closed Wednesday’s trading down 17%, to $9.08, after concern over booking numbers overshadowed its “first ever profit”.
The gig-work and ride-sharing firm banked $5 million of profit in its second quarter, after revenue improved just over 40% year over year to $1.44 billion. Gross bookings totalled $4.02 billion short of a Wall Street forecast of $4.07 billion.
The number of ‘active riders’ using the Lyft app increased by 10% to 23.7 million whilst the total number of rides was up 15% reaching 205 million.
Looking ahead, Lyft gave guidance for third quarter gross bookings that underwhelmed.
Lyft said it expected to see between $4 billion and $4.1 billion of gross bookings in its third quarter, which was lower than the $4.15 billion mid-point consensus among analysts.
Shopify's AI tools brought more merchants to platform
Shopify Inc (TSX:SH., NYSE:SHOP) shares finished Wednesday’s regular trading session up close to 18%, driven by strong financials supported by AI initiatives.
Revenue for the second quarter was up 21% year-on-year to $2.05 billion, versus Wall Street estimates of $2.01 billion, as new AI tools attracted increased numbers of e-commerce merchants to its platform.
Gross merchandise volume (GMV) was up 22% to $67.2 billion, it highlighted.
Earnings (adjusted) per share came in at 26 cents ahead of the 20 cents pencilled in by analysts.
Shopify's CFO, Jeff Hoffmeister, emphasised a focus on revenue and gross profit growth amidst what’s been a mixed consumer spending environment.
Looking ahead, to the third quarter, Shopify said it expected to grow revenue in the low-to-mid-twenties percentage range, whereas the market is modelling 21% growth.
In New York, Shopify stock closed out regular trading at $63.89 for a 17.8% or $9.67 per share gain.
Legal & General shares nudged up by unspectacular first half
Legal & General Group PLC (LSE:LGEN) shares were steady on Wednesday after the financial services firm reported expectedly positive financial results for the first half of 2024.
Core operating profit came in at £849 million, ahead of forecast, whilst operating profit was slightly lower than last year at £920 million.
The firm raised its first half dividend to 6p per share, from 5.71p, and it is also rewarding shareholders with a £200 million share buyback – which is Legal & General’s first buyback for more than a decade.
Adam Vettese, market analyst at investment platform eToro, described the results as “very steady if not uneventful”.
In a note. Vettese said: “Arguably this is exactly the kind of news investors want to hear after the week they have had given the recent global sell-off.”
Legal & General shares were up 1.29% at Wednesday's close priced at 219.50p.
Novo Nordisk (NYSE:NVO) hit as revenue and profit growth failed to meet high expectations
Ozempic and Wegovy owner Novo Nordisk (NYSE:NVO) saw its shares slump on Wednesday, losing nearly 10% in New York, after the weight loss drug maker’s second-quarter disappointed.
Profit for the second quarter was up 3% at $2.93 billion (or billion Danish kroner), on the back of a 25% rise in revenue up to 68.06 billion DKK - short of analyst forecasts pitched at 21.29 billion DKK of profit and 68.47 billion DKK of revenue.
Novo, meanwhile, downgraded its full-year profit growth guidance to a range of 20% to 28%, from a previous estimate of 22% to 30%, and is said it had higher hopes for revenue, with sales expected to grow by 22% to 28% versus an earlier estimate of 19% to 27%.
Neither Wegovy nor Ozempic met sales expectations as relative supply constraints meant the firm can’t keep pace with soaring worldwide demand.
In New York, Novo Nordisk (NYSE:NVO) shares were down $10.38 or 8% trading at $119.67 – earlier, the Oslo quote saw the stock drop 6.7%.
WPP shares snipped lower, no growth expected this year
WPP PLC (LSE:WPP), the London-headquartered advertising and communications firm, closed Wednesday down around 2% priced at 702.25p after reporting lacklustre first-half financial results.
Also, the firm announced the sale of a stake in public relations business FGS Global to private equity buyer KKR in a deal worth $775 million – the transaction valued the PR company at $1.7 billion.
In terms of financials, meanwhile, WPP reported flat revenues of £7.2 billion for the first six months of 2024, whilst pre-tax profits were down 3.8% to £525 million.
It meanwhile adjusted down full-year guidance to reflect ‘the macroeconomic pressures and challenges in China’. WPP now expects full-year revenue to be flat at best, predicting the “growth” rate between -1% and 0%.
Vodafone boosted by €0.5 billion buyback
Vodafone Group PLC (LSE:VOD) shares traded up, closing Wednesday’s session 3.9% higher at 73.20p, with the news that it will reward shareholders with a €500 million (£430 million) share buyback.
The telco firm said this latest buyback programme will run until November 29, and will be managed by Goldman Sachs.
It is part of Vodafone's plan to return €2 billion to shareholders in the wake of the sale of its Spanish business.
Vodafone, which is making progress but remains in turnaround mode, continue to have a net debt pile of €33.2 billion (£28.5 billion), albeit that’s slightly less that this time last year.