Markets Defused is an easy-to-understand and straightforward recap of the day’s most engaging business and stock market news.
- Peloton shares skyrocketed on first revenue growth for years
- Nvidia trades lower-ahead of earnings report, are sentiments turning?
- Paramount traded up after new bid extended 'go-shop' time
- JD Sports rose as America led sales growth
- Hays stuck with dividend despite profit drop
- Labour govt told to rethink oil and gas tax plan
Peloton shares skyrocket as revenue rose for the first time in years
Peloton Interactive Inc (NASDAQ:PTON) shares skyrocketed on Thursday, rising $1.25 or 37.55% to $4.61, after a modest increase in revenue proved to be much better than Wall Street had feared.
Revenue for the quarter was up just 0.2% to $644 million for its fourth quarter, beating forecasts of $631 million.
Significantly, it was the first time Peloton has seen a quarter of revenue growth since 2022.
At the same time, Peloton improved profitability with adjusted earnings (EBITDA) reaching $70 million – compared to a $34.7 million loss for the same quarter last year.
Despite the market’s giddiness, Peloton remain quite cautious with guidance predicting lower revenue in the next quarter with its forecast pitched between $560 million and $580 million.
Nvidia trades lower-ahead of earnings report, are sentiments turning?
NVIDIA Corp (NASDAQ:NVDA, ETR:NVD) share price pulled back Thursday, losing around 4%, as speculators positioned for next week’s second-quarter earnings report.
AI-related demand for high-powered processors, the kinds that Nvidia specialises in, has been the factor in the chip-maker's emergence as ‘the world’s biggest’ company, with a market capitalisation above $3 trillion.
Throughout its rise - 170% this past year alone – investors have come to expect big numbers as these quarterly earnings reports come along.
It remains to be seen whether the AI bandwagon can keep motoring ahead at the pace that investors have become accustomed to.
What can be seen, was Thursday’s 2.7% share price decline ahead of next Wednesday’s financial results.
Analysts on Wall Street remain optimistic, or at least they do in the preview reports they publish, with many expecting Nvidia to exceed earnings forecasts due to the sustained demand for its AI processors.
In New York, on Thursday, Nvidia shares were down $5.12 or 3.98% at $123.38.
Paramount traded up after new bid extended 'go-shop' time
Paramount Global (NASDAQ:PARA) shares rose around 3% on Thursday, with the A class stock priced at $24.15, as the market reacted to the latest cliffhanging turn in the TV and movie-making conglomerate’s takeover saga.
Having agreed, finally, to be bought by Skydance Media the firm’s corporate deal makers have been in the “go-shop” period, seeking out any residual buying interest - and, evidently, they found some late third act drama.
Edgar Bronfman Jr, a former Warner Music exec and an heir to the Seagram liquor fortune, has tabled a new and improved bid to buy the studio, reportedly worth $6 billion – building on a recent $4.3 billion offer. It compares to a phased Skydance proposal, notionally worth over $8 billion.
Any transaction is complicated by Paramount’s tiered equity structure – including one class of shares that are majority-owned by National Amusements, a vehicle for Paramount’s controlling stakeholder the Redstone family.
Paramount’s ‘go-shop’ has now been extended until 5 September. In New York, Paramount’s Class A shares were up 2.95% whilst the Class B stock gained 0.8% to $11.18.
JD Sports closed 10% higher as American sales drove growth
JD Sports Fashion PLC (LSE:JD.) shares closed Thursday more than 10% higher, to 141.85p, thanks to a strong trading performance in its second quarter.
It was driven mainly by strong sales in its North American division.
Group like-for-like sales were up 2.4%, while organic sales rose by 8.3% for the period – in North America like-for-like sales were up 5.7% and organic sales was up 13.7%.
In the UK, JD’s like-for-like sales were down by 0.8% albeit this was better than the 6.4% decline in the preceding quarter.
Despite a volatile retail environment, JD Sports has maintained full-year profit guidance which sees pre-tax profits between £955 million and £1.035 billion.
Labour govt told to rethink oil and gas tax plan
The Labour government’s plan to further increase tax on oil and gas operations in the UK has received a growing number of pleas for a rethink.
After the prior government set the effective rate of tax at 75%, through the supplemental “windfall” tax following soaring commodity prices in the wake of the war in Ukraine, the new government wants to move to 78%.
It also wants to extend this ‘windfall’ rate until 2030, and take away tax breaks that had been designed to stimulate continuing investment in the UK North Sea.
Fotry-two companies, in an open letter, warned that the proposed changes could jeopardize £200 billion of investments in the UK's energy sector, including in renewable energy projects.
Unions, like the GMB union and BRINDEX, called on the government to engage in meaningful discussions with industry representatives, adding that oil and gas workers should not be ignored in decisions that could affect their livelihoods and the country's energy security.
Hays shares held up as recruiter stuck by its dividend despite profit drop
Hays PLC (LSE:HAS) shares closed 2.53% higher on Thursday, at 97.4p, with investors taking on the chin a sharp decline in pre-tax profit – down some 92% to £14.7 million for the year ended.
It is, after all, a surprise to no one that the recruitment sector is not currently booming.
Hays shares are down nearly 11% in 2024 to date.
In Thursday’s results, Hays reported a 14% reduction net fees to £1.11 billion, with the recruitment firm noted reductions in client activity and also longer hiring processes.
Operating profit was down 47%, to £105 million. And Hays is now looking to make £30 million of annual cost savings by 2027. Nonetheless, it is also keeping shareholders engaged by keeping its dividend at 3p per share.