European market opened up flat following Asia after weakening commodity prices. With the FTSE 100 down 0.4% and the DAX down 0.03%.
UK News
BHP Billiton (LON:BLT) reported 9-month (through March) production: iron ore production declined 1% YoY to 171M tonnes, copper -8% to 1.2M tonnes, Metallurgical coal -1% to 31M tonnes, Energy coal -10% to 27M tonnes, Petroleum -4% to 184 MMboe. The Co pointed out: “On track to deliver an average unit cost improvement of 14% across our major assets as productivity gains continue to be realised. (…) Full year production guidance maintained for Petroleum, Copper and Coal. (…) Guidance at Western Australia Iron Ore (WAIO) reduced by 10 Mt to appx. 260 Mt (100% basis) as a result of adverse weather and the initiation of an accelerated rail network maintenance program.”
ARM Holdings (LON:ARM) posted 1Q results: “Total dollar revenues in Q1 2016 were $398.0M, up 14% versus Q1 2015. Q1 sterling revenues of £276.4M were up 22% year-on-year. (…) Normalised profit before tax in Q1 2016 was £137.5M compared to £120.5M in Q1 2015. (…) IFRS profit before tax was £112.0M in Q1 2016 compared to £103.4M in Q1 2015. (…) normalised fully diluted EPS were 8.2p (35.5 cents per ADS3) compared to 7.1p (31.7 cents per ADS) in Q1 2015. IFRS fully diluted EPS in Q1 2016 were 6.5p (27.8 cents per ADS) compared to 6.0p (26.7 cents per ADS) in Q1 2015. (…) Based on current conditions in the semiconductor industry, we expect Group dollar revenues for the full year to be in line with market expectations.”
GKN Plc (LON:GKN) provided a trading update: “The Group’s principal markets have performed in line with the expectations set out in our February results announcement. Management sales for the three months ended 31 March 2016 were £2,179M (2015: £1,943M). This 12% increase comprised 1% organic growth, 8% acquisition growth and 3% beneficial currency translation. (…) Group trading margin is lower than last year.”
Travis Perkins (LON:TPK) issued a 1Q trading update: “Total Group sales grew by 5.0% in the first quarter and 6.2% on a comparable days basis. Like-for-like sales growth was 4.2%. Price inflation was negligible, with low inflation on heavyside categories broadly offset by continued deflation on lightside categories and commodity driven products. (…) Overall trading in line with expectations.”
Brown (N.) Group (LON:BWNG) reported FY results: “Statutory profit before tax -7.8% to £72.2M (FY15: £78.3M), (…) Underlying profit before tax -2.0% yoy to £84.5M (FY15: £86.2M), in line with expectations (…) Total group revenue +3.5% to £866.2M (FY15: £837.2M) (…) Proposed final dividend flat year on year at 8.56p, taking full year dividend to 14.23p, also unchanged on last year.”
Bunzl (LON:BNZL) Plc published a year-to-date trading statement: “Overall trading has been consistent with expectations at the time of the annual results announcement at the end of February. Group revenue in the first quarter has increased 13% at actual exchange rates. At constant exchange rates revenue has risen by 10%, (…) underlying revenue in the first quarter was at a similar level to the prior year.”
Rentokil Initial (LON:RTO) said 1Q revenue from ongoing operations rose 13.9% YoY (+11.8% at constant exchange rates) to £468M.
Global News
In Asia the Nikkei index was higher after U.S. stocks rose and the dollar remained steady against the yen, lifting overall market sentiment. The Nikkei rose 0.9% to 17,021.03 in midmorning trade after hitting an intraday high of 17,099.36. Shanghai fell 2.5%, with every sector from financial to telecoms in the red.
Crude futures fell on Wednesday after Kuwaiti oil workers ended a three-day strike that had cut production from the Middle Eastern country, and data showed U.S. stockpiles rose last week. Brent crude futures were down 68 cents at $43.35 a barrel. On Tuesday, they settled up 2.6%, at $44.03 a barrel. U.S. crude was down 85 cents at $40.23. The contract rose 3.3%, to $41.08 in the previous session. Crude inventories rose by 3.1 million barrels in the week to April 15 to 539.5 million, compared with analysts’ expectations for a rise of 2.4 million barrels, API said.
In the US the S&P 500 climbed closer to a record high on Tuesday, lifted by energy stocks and a solid quarterly report from Johnson & Johnson (NYSE:JNJ). The S&P 500 gained 0.31% to 2,100.8. Johnson & Johnson rose 1.57% after it reported marginal growth in quarterly sales. Goldman Sachs (NYSE:GS) shares added 2.28% after bett5er-than-expected quarterly profit. After the bell, Yahoo posted its first-quarter results and shares moved up 1. Intel (NASDAQ:INTC) shares fell 2.4% after it announced plans to reduce its global workforce by 11%. IBM (NYSE:IBM) fell 5.59% after it reported its worst quarterly revenue in 14 years
Economic Calendar
- 09:30 GMT+1 UK Average Earnings Index 3m/y
- 09:30 GMT+1 UK Claimant Count Change
- 11:00 GMT+1 EU ECB President Draghi Speaks
- 15:30 GMT+1 US Crude Oil Inventories
- 21:15 GMT+1 CAD BOC Gov Poloz Speaks
US Equities After the Close Earnings highlights
- Intel (NASDAQ:INTC) – Q1 Adj. EPS USD 0.54 vs. Exp. USD 0.49, Co. cuts their full year margin guidance. Q1 Non-GAAP revenue USD 13.8bln, Q1 GAAP revenue of USD 13.7bln. Furthermore, Co. is cutting up to 12,000 jobs or 11% of its workforce. Finally, Co. forecast Q2 revenue USD 13.5bln +/- USD 500mln vs. Exp. USD 14.2bln.
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