Paddy Power have fantastic second quarter
Paddy Power Betfair had a fantastic second quarter, with revenue momentum building, even when you exclude a positive contribution from the World Cup.
The improvement in revenue indicates punters are coming back to the table after an uncanny string of bookmaker-friendly football results earlier this year scared them away.
But the downgrade to earnings guidance is a reminder of the regulatory risks the company faces in Australia and the UK, not to mention the execution challenges it faces in the US.
The tax outlook in Australia is far from certain, while the impact in the UK of a cap on fixed-odd bettering terminal wagers has already prompted rival William Hill to book a massive write-down. That can't be good news for Paddy Power, even though the company claims the impact on its business will be fairly negligible.
Glencore (LON:GLEN) have impressive result
Adjusted earnings have come in just shy of market expectations in what is nevertheless an impressive result for the mining and trading colossus.
Efficiencies introduced during the commodities downturn have helped Glencore squeeze higher profits out of a recent recovery in prices, while capital discipline has left its balance sheet in good shape.
No additional buyback has been announced today, which could disappoint some investors. Management has, however, hinted that more buybacks could be on the cards soon, with capital returns mentioned as part of its short-term focus.
The shares, of course, are trading at a discount to analyst recommendations due to the cloud hanging over the business from the US fraud investigation and political uncertainty in the Democratic Republic of the Congo.
More clarity on the potential cost of those headwinds could be needed before management feels more comfortable about loosening the spending spigots.
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