Markets Defused is an easy-to-understand and straightforward recap of the week’s most engaging business and stock market news.
- Expedia soared on roaring travel demand
- Barclays scraps banker bonus cap
- Eli Lilly beat forecasts thanks to Mounjaro
- Entain scored revenue and earnings growth
- Novo Nordisk growth missed high expectations
- Vodafone boosted by €0.5bn buyback
- Disney’s theme park struggles overshadowed streaming profit
- Legal & General nudged up by solid but unspectacular half
- Uber surged on spike in trips and bookings
- Rolls-Royce working on a ‘mini-nuclear’ stake sale
- Lloyds Bank upped its AI efforts
- Wood Group plummeted after suitor pulled out
Expedia soared on roaring travel demand
Expedia Group Inc (NASDAQ:EXPE, ETR:E3X1) stock shot up 10% in Thursday’s ‘after-hours’ trade, adding $12.53 to $130.50, as sustained demand for international drove second-quarter profit beyond Wall Street expectations.
Revenue for the quarter was up 6% to $3.56 billion, easing above a consensus analyst forecast of $3.53 billion.
Profit came in at $386 million, or $2.80 per share, compared to $385 million and $2.54 a year ago. Earnings (adjusted) per share meanwhile was stated at $3.51, comfortably beating analysts’ forecast pitched at $3.18.
Expedia said that its gross bookings were up 6% to $28.8 billion, including lodging gross bookings up 8% to $20.7 billion – including an 11% increase in hotel bookings specifically.
Barclays scraps banker bonus cap
Barclays PLC (LSE:BARC) has lifted the cap on bankers’ bonuses, which means that its ‘top bankers’ will be able to earn as much as 10 times their base salary in bonuses.
The decision, on Thursday, followed a shareholder vote and was made possible by post-Brexit regulatory changes that allowed the UK to remove an EU rule that limited the amount bankers could be paid.
Previously, under the EU rule, bankers could not be paid more than double their base salary in bonuses.
Barclays follows a number of investment banks that have already axed the cap, and, it said that the change will help it attract and retain top talent in a competitive market.
Eli Lilly beat forecasts thanks to Mounjaro
Eli Lilly and Co (NYSE:LLY) shares bolted more than 9% higher, adding $72.47 to $844.61, on a strong set of second-quarter financials driven by sales of its diabetes and weight loss drugs Mounjaro and Zepbound.
Revenue reached $11.3 billion, up 36% from the same quarter a year ago and comfortably above Wall Steet expectations of $9.92 billion. Earnings per share came in at $3.92 which was massively ahead of analysts’ consensus estimate of $2.60.
Mounjaro and Zepbound contributed $3.09 billion and $1.24 billion in sales respectively, boosted by both increased volumes and higher prices.
Moreover, Eli Lilly told investors that with upgraded capacity concerns over supply constraints had eased.
Eli Lilly has now upgraded its full-year revenue forecast, to a range of $45.4 billion to $46.6 billion, from the prior guidance of $42.4 billion to $43.6 billion.
Entain scored revenue and earnings growth
Ladbrokes owner Entain PLC (LSE:ENT) saw its shares rise, closing Thursday’s close up 5% at 550p, after impressing investors in the City of London with strong first half financials. The bookie also rewarded investors with an increased dividend, which was also up 5%, to 9.3p per share.
Revenue was up 6% to £2.55 billion, whilst earnings (adjusted EBITDA) rose 5% to £524 million.
“[It was] helped by results going in the bookie’s favour at the Euro 24 football tournament,” Hargreaves Lansdown head of equity research said in a note.
Entain’s reported a loss after tax of £46.9 million which was a major improvement from the £502 million loss this time last year.
Entain said it now expects online net gaming revenue (NGR) to grow in ‘low single digits’, which represents a more bullish outlook than before, and it forecasted its full-year profit at around £1.06 billion, upgraded from £1.04 billion.
Novo Nordisk (NYSE:NVO) growth missed 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 disappointed the market for the first time in a long time.
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.
Such are the high expectations, however, both metrics fell short with consensus 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%.
Vodafone boosted by €0.5bn 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.
Disney’s theme park struggles overshadowed 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 quarter’s operating income tally, Disney revealed. These three platforms 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 (which has raised prices significantly since COVID) 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.
Legal & General nudged up by solid but unspectacular 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.
Uber surged on spike in trips and bookings
Uber Technologies Inc (NYSE:UBER, ETR:UT8) shares traded up close to 11% on Tuesday, driven by positive revenue and profits for its second quarter. The gig-app firm generated $10.70 billion of revenue in the quarter, up 16% year-over-year, and better than Wall Street’s consensus forecast of $10.57 billion.
The Delivery segment, which includes Uber Eats, saw gross bookings up 16% to $18.1 billion, whilst the Mobility segment, or ride-sharing, brought in $20.6 billion of gross bookings which was a 23% improvement from last year. Overall, group gross bookings were up 19% at $40 billion.
Trip numbers meanwhile increased 21% compared to the same period last year, to 2.8 billion – which Uber highlighted was approximately the same as 30 million trips per day.
Net income meanwhile more than doubled to $1.02 billion compared to $394 billion a year ago.
Earnings (adjusted EBITDA) was reported at $1.57 billion, equating to 47 cents on a per share basis which was easily ahead of analyst estimates of 31 cents. Uber generated some $1.7 billion of free cash flow in the period, taking its cash pile to some $6.3 billion.
Lloyds Bank upped its AI efforts
Lloyds Banking Group PLC (LSE:LLOY) announced the hiring of Rohit Dhawan as the Group Director of AI and Advanced Analytics, with a mandate to scale the bank’s AI capabilities and integrate ‘AI outcomes into business priorities’.
Reporting to Lloyds chief data and analytics officer Ranil Boteju, Dhawan will shape the bank’s overall AI, ML, and advanced analytics strategy.
He’s joining from Amazon Web Services (AWS) where he was the head of data and AI strategy for the Asia-Pacific region.
Currently, Lloyds is trialing over 50 AI use cases aimed at improving customer experience – including customer service and support, as well as account supervision functions like detecting early fraud warning signs.
Rolls-Royce working on a ‘mini-nuclear’ stake sale
Rolls-Royce Holdings PLC (LSE:RR.) shares closed Monday’s trade on the back foot, losing 6% in volatile markets, though investors also eyed reports that the British engineer may be working on a stake-sale for its small modular reactor (SMR) business.
Such a deal would unlock new funding for the business which has great promise for significant growth, but also requires continuing capital investment.
Talks are taking place with potential investors, including infrastructure investors, clean energy funds, hedge funds, and other nuclear power companies – that’s according to a report by The Sunday Telegraph over the weekend.
It comes as the unit’s current funds are believed to stand at around £280 million, along with government grants of £210 million that are due to run out early next year.
Rolls-Royce aims to be the first to deploy SMR technology in Britain, and it’s a frontrunner in the government’s SMR design competition, managed by Great British Nuclear. The SMRs, designed by Rolls-Royce, could halve the cost of nuclear power plants and reduce construction time.
Wood Group plummeted after takeover suitor pulled out
Shares in John Wood Group PLC (LSE:WG.) plummeted on Monday, losing around 37%, after it announced that Dubai-based suitor Sidara had withdrawn its takeover bid.
Sidara cited geopolitical risks and financial market uncertainty for the decision.
Wood Group, in its statement, said it remained confident in its strategic direction and reaffirmed its guidance for the current and next financial year, emphasising its forecast significant cash flow in the coming year.
It comes after Sidara made several offers to acquire Wood Group, with the last valuing the company at 230 pence per share.
In London, Wood shares fell 74p or 37% to finish Monday’s trading at 122.8p.