easyJet Share News (EZJ)

LONDON (Alliance News) - Stock indices in London, Paris and Frankfurt are firmly in the red midday Wednesday, following a lower close on Wall Street on Tuesday and a host of individual company updates in the UK and US.

In London, the FTSE 100 index trades down 1.0% at 6,699.34, the FTSE 250 is down 0.2% at 17,718.23, and the AIM All-Share also is down 0.2% at 756.87.

In Europe, the French CAC 40 is trading down 0.3% and the German DAX 30 is down 0.5%.

Ahead of the open in New York, futures point Wall Street to a lower start. The Dow 30 and S&P 500 are both indicated down 0.4%, while the tech-heavy Nasdaq 100 is pointed down 1.2% after some disappointing results from key technology companies after the US market close on Tuesday. Coca-Cola and SanDisk are amongst the companies set to report Wednesday.

Software giant Microsoft Corp on Tuesday reported its biggest quarterly loss ever, hurt largely by a hefty write-down of USD7.5 billion related to Nokia mobile-phone business, with revenue dropping 5% as PC shipments continue to slip. Nonetheless, adjusted earnings for the quarter trumped analysts' estimates, as did revenues, but Microsoft shares slipped over 2% in after-hours trade following the announcement. Pre-market trading points Microsoft down 3.8%.

Also on Tuesday, Apple reported a 38% rise in profit for its third quarter driven by strong sales of the iPhone and Mac. However its forecast for its fourth quarter fell below analyst expectations, and shares in the biggest cap US stock are trading down 4.9% in the US pre-market.

Apple's disappointing outlook is weighing on the shares of London-listed chip designer ARM Holdings, for which Apple is a major customer. ARM is the biggest faller in the FTSE 100, trading down 4.0%.

"ARM does indeed design chips for Apple's products, but it's ridiculous to assume that ARM relies on Apple. The chip designer also licences its blueprints to most other smartphone manufacturers - HTC and Samsung to name but two big hitters," says Augustin Eden, research analyst at Accendo Markets.

"Market research firm IHS predicted that 23% of the world's PCs (i.e. those running Microsoft Windows 8) will contain an ARM-licenced processor in 2015, and while Apple is undoubtedly seen as the mobile technology market barometer, this morning's hit to ARM's share price is an over-reaction and should be seen as a buying opportunity by those that saw its own results this morning," Eden adds.

ARM said Wednesday that it expects to meet market expectations for dollar revenues in 2015 as it posted a rise in pretax profit for its first half. The company reported a pretax profit of GBP198.1 million for the half year to end-June, up from GBP146.0 million a year before, as revenue rose 22% to GBP456.0 million from GBP373.7 million. In dollar terms revenue rose 15% to USD705.2 million from USD614.8 million.

BHP Billiton is another big faller in the FTSE 100, trading down 4.0%. The mining giant reported a 6% increase in iron ore production for the fourth quarter, while production of metallurgical coal grew 13%. However, following the spin-off of South32, BHP Billiton said it expects to recognise a net loss on the demerger of about USD2.1 billion post-tax as an exceptional item in the June 2015 half year.

Furthermore, for fiscal 2016, BHP Billiton forecast a 7% decline in petroleum production to 237 MMboe, a 12% decrease in copper output to 1.5 million tons, a 6% decrease in metallurgical coal production to 40 million tons, and a 2% decrease in energy coal production to 40 million tons.

Other miners also are weighing on the FTSE 100 as commodity prices continue to be squeezed. Gold in particular has been in focus this week following the heavy fall seen on Monday to a new five-year low. Whilst the metal has not sunk below the Monday low of USD1,073.40 an ounce, it continues to remain under pressure and trades at USD1,093.90 an ounce midday Wednesday.

On the other side of the index, easyJet is the biggest blue-chip gainer, trading up 4.3%. The budget carrier said it beat its guidance for revenue per seat in the third quarter, even as its total revenue fell for the period, and said it expects its pretax profit for the full-year to grow on the back of its strong second half performance.

While overall revenue was down, driven by a series of issues the airline faced in the quarter, Chief Executive Carolyn McCall said that, with 77% of its second-half seats now booked, the company expects to post a pretax profit of GBP620 million to GBP660 million for the year to the end of September, compared to GBP581 million a year earlier.

The company said its revenue per seat was down by 5.4% in the three months to the end of June to GBP59.08, slightly better than the guidance it issued in May. The better-than-expected figure was driven by good trading in the UK and on beach routes in Europe in May and June. These bright spots partly offset the impact of French air traffic controls strikes in April.

Sage Group is up 1.3% after it reiterated its expectations for its current financial year, continuing to expect at least 6% organic revenue growth for the full year, as it saw organic revenue up 6.6% in its first nine months. The business software company said that in the third quarter to end-June it saw organic revenue growth of 7.5%. Sage said growth was flattered by a relatively weak comparative third quarter in the previous year.

TalkTalk Telecom Group is the worst performer in the FTSE 250, trading down 8.0%. The telecommunications company reiterating its guidance for its current financial year, as it posted a slowdown in revenue growth for its quarter and warned on softness in the broadband market.

TalkTalk said the broadband market was softer in its first quarter to end-June than it has been in previous quarters as a result of "higher promotional activity" in the sector. Competition is increasing in the telecommunications market as providers continually work towards becoming 'quad play' providers - meaning they provide fixed-line voice, broadband, mobile and television services - in an effort to hold on to customers.

In the AIM All-Share index, Weatherly International is up 14% after it said production at its Tschudi copper project in Namibia ramped up in the fourth quarter and affirmed its monthly production guidance. Weatherly said production at the Tschudi project is rising, with 2,257 tonnes of London Metal Exchange Grade A copper cathode produced in the quarter to the end of June, Weatherly's fiscal fourth quarter.

North River Resources is down 17% after it said it is behind schedule on developing the Namib project in Namibia and laid out a revised schedule and funding plan for the project after incurring problems with its existing plan. The miner said it has reached a "critical milestone" as it moves toward the construction phase of the project, which will ultimately lead to a 250,000 tonne per annum operation.

Still ahead in the economic calendar, the US housing price index is due at 1400 BST, US Markit purchasing manager's Composite and Services indices are due at 1445 BST, and US existing home sales are due at 1500 BST. EIA Crude Oil stocks are scheduled for 1530 BST.

By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1

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