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LONDON (Alliance News) - Shire Friday increased its full year earnings guidance for the third time this year as it saw profit rise in its third quarter, its first results since its deal to be bought byh US-based AbbVie Inc fell through earlier this week.
The pharmaceutical company raised its non GAAP earnings per American depositary share growth guidance to the high 30% range. At the time of its interim results the company had guided in the low-to-mid 30% range.
The company posted a pretax profit of USD575.6 million for the third quarter, up from USD374.8 million in the previous year, as revenue rose to USD1.55 billion, from USD1.17 billion.
Product sales were up 33% to USD1.55 billion, boosted by its acquisition of ViroPharma Inc in January . Excluding sales from ViroPharma products, product sales rose 19%. The company also raised its full year expectations for product sales, expecting growth in the low 20% range having previously guided high teens growth.
Revenue growth was boosted by a strong performance from its hereditary engiodema attack treatment Cinryze, which it acquired with ViroPharma, and sales of Firazyr.
The company has been keen to show its progress after its proposed GBP32 billion takeover by US based AbbVie Inc officially collapsed earlier this week, the first casualty of new US Treasury measures seeking to curb so-called "tax inversion" deals. Although the collapse of the deal took a big hit to Shire's share price, it has received a USD1.64 billion break free from AbbVie.
Publisher Pearson said Chief Financial Officer Robin Freestone will step down by the end of 2015 to explore other interests, as it eked out a 1% rise in sales in the first nine months of the year at constant currency rates.
The company said it was retaining its full year guidance for adjusted earnings per share to come in between 62 pence and 67 pence in 2014, even though sales in the first nine months of the year were down 6% excluding Penguin and Mergermarket at actual exchange rates, due to the strength of the pound against the US dollar and emerging market currencies.
Pearson said it has already started looking for a new CFO, and will consider internal and external candidates. Freestone will remain in the role until a successor is in place. He joined Pearson in 2004 as as deputy chief financial officer and became chief financial officer in June 2006.
"I feel that eight years as CFO is long enough for anyone to play this type of role. I am focused now on delivering our financial commitments in 2014 and developing our 2015 plans, supporting Pearson and my board colleagues in their search for a successor, and facilitating the arrival and induction of that person. After that I look forward to beginning a new phase of my career," Freestone said in a statement.
The UK economy grew at a slower pace in the third quarter, preliminary estimates from the Office for National Statistics Office showed. Gross domestic product climbed 0.7% from the second quarter, when it grew 0.9%. The sequential growth rate matched economists' expectations.
As expected, GDP was 3% higher in the third quarter compared with the same quarter a year ago. GDP was estimated to be 3.4% higher than the pre-economic downturn peak of the first quarter of 2008.
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Markets: The major UK stock indices are trading modestly lower as investors exercise caution ahead of a weekend that brings the results of the EU bank stress tests, while concerns remain about the health of the wider global economy and the spread of the Ebola virus.
US stock futures are pointing to a slightly lower start on Wall Street. The DJIA and the S&P 500 are pointed 0.1% lower and the Nasdaq Composite down 0.3%.
The US technology sector will also be in focus when Wall Street opens after both Amazon.com Inc and Microsoft Corp reported results after the closing bell on Thursday. Amazon reported a net loss of USD437 million for the third quarter, compared with a USD41 million loss a year earlier. Microsoft reported a profit of USD4.5 billion in the third quarter, down from USD5.2 billion a year earlier but beating Wall Street expectations.
FTSE 100: down 0.3% at 6,402.66
FTSE 250: up 0.1% at 15,144.84
AIM ALL-SHARE: up 0.1% at 709.47
GBP-USD: up at 1.6044
EUR-USD: flat at 1.2650
GOLD: up at USD1,231.95 an ounce
OIL (Brent): down at USD86.06 a barrel
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Other Top UK Corporate News
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Rolls-Royce Holdings and Safran unit Hispano-Suiza have signed a 25-year deal to set up a company to produce accessory drive train transmission units for all the UK company's civilian aircraft engines, the companies said. The new company, headquartered at Hispano-Suiza's site in Paris, will cover all civil aircraft, particularly its Trent 7000 engine used on the Airbus A330neo.
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Pharmaceutical company AstraZeneca has received approval from the European Medicines Agency for its drug Lynparza, paving the way for the UK pharmaceutical company to start marketing the treatment to ovarian cancer patients. The EMA's Committee for Medicinal Products for Human Use, or CHMP, said the drug, also known as olaparib, can be used as a monotherapy to treat patients responding to platinum-based chemotherapy treatment.
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Five Prime Therapeutics announced an expansion of its respiratory disease research collaboration with GlaxoSmithKline. The collaboration was established in 2012 to identify first-in-class agents and new mechanisms for the treatment of refractory asthma and chronic obstructive pulmonary disease or COPD. The scope of the collaboration was increased in April 2014 to include two additional respiratory disease discovery programs for a six-month evaluation period. Glaxo has now committed to continue these two discovery programs for another 18 months.
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TSB Banking Group got the UK bank earnings season underway, reporting an increase in third quarter pretax profit from the second quarter, as lower income was more than offset by a drop in operating expenses and less money being set aside for bad customer debts. In a statement, the bank said it made a GBP33.1 million pretax profit in the three months ended September 30 and GBP161.6 million in the first nine months of the year as a whole. It made a GBP25.7 million pretax profit in the three months ended June 30.
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C&C Group confirmed it is looking to gatecrash the acquisition of Spirit Pub Co by Greene King and outlined the drivers for the deal, but shares in the company fell on the back of Spirit's rejection of the approach on Thursday and a warning from analysts about the apparent strategic shift by C&C that the bid indicates. The Irish drinks company confirmed it has made a preliminary approach to the board of Spirit and said its management team "strongly believe that a combination of C&C’s brands with Spirit’s high quality, well-located pub estate is the most effective way to optimise shareholder returns in a competitive UK market".
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Amlin said it has increased its stake in Leadenhall Capital Partners LLP, an investment manager in insurance- and reinsurance-linked securities, to 75%, from 40%. In a statement, the FTSE 250 insurer said it made a partial acquisition of each individual partner’s stake in Leadenhall, with the final amount paid to be determined by the business's future profitability. It will be payable in three instalments over the period to May 2016.
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Ophir Energy said it has signed a sharing contract to conduct exploration and production at two additional blocks in offshore Gabon. The new blocks are situated outside of Ophir's existing acerage and are to be called Nkouere PSC and Nkawa PSC. Nkouere covers 675 square kilometres and Nkawa covers an area of 2,085 square kilometres and both cover water depths varying between 2,000 metres and 2,500 metres, it said in a statement.
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Spectris said it now expects its full year earnings before interest, tax, and amortisation to be "modestly" below current company-compiled consensus of GBP200 million, as weaker than expected trading patterns from its second quarter continued into the third. The instrumentation and controls company said sales in its third quarter to end-September fell 5%, as growth contributed by acquisitions of 2% was offset by the strength of sterling, which had a negative effect of 7%. At constant currency and on an organic or like-for-like basis, sales were flat.
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Cobham said it has won a AUD640 million contract to provide airborne search and rescue services to the Australian Maritime Safety Authority. The deal runs for 12 years from 2016, and it will start modifying and mobilising aircraft later this year. It said the deal price includes estimated flying charges, and could rise to over AUD700 million if three additional optional years are exercised by the Australian Maritime Safety Authority.
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Dechra Pharmaceuticals reiterated confidence that its strategy will continue to deliver growth, as it traded in line with expectations in its financial first quarter to end-September, and said it had terminated development of its feline endocrine drug. The company said that, following suspension of clinical trials for the feline endocrine drug in the fourth quarter of 2014, it had opted to terminate further work on the product. Dechra saw revenue rise 6% in the first quarter, or 12% at constant currency, although it noted this was against a soft comparative period that had been hit by the phasing of export orders and supply issues in the US.
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Hikma Pharmaceuticals said it has received a warning letter from the US Food and Drug Administration related to an inspection of its manufacturing facility in Portugal conducted in March, although it stressed it does not believe this will impact its financial guidance for the full year. In the letter, the FDA raised issues related to investigations and environmental monitoring at the facility, Hikma said.
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Pets At Home Group said like-for-like sales growth increased in the second quarter and the first half, driven by strong performances across its business units. The FTSE 250-listed pet retailer said like-for-like sales growth hit 4.2% both in the second quarter and in the first half to October 9, with strong performances from its Advanced Nutrition, Health & Hygiene and VIP Club units. It also said it had seen continued sales growth in its veterinary practices and from its Groom Rooms. Total revenue was up 10.2% to GBP381.5 million, with its core Merchandise business seeing revenues increase 8.9% to GBP348.3 million.
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AIM Movers
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Active Energy Group shares are up after the biomass supplier said it had completed the forestry sampling programme at its new Canadian joint venture site, and has started marketing the first round of permits. John Lewis of Hungerford is doing well despite saying that it expects to report a lower operating profit for its last financial year, as investments in new showrooms and costs relating to its unprofitable Wilmslow concession more than offset sales growth. It expects to report a rise in sales to GBP7.4 million for the year to August 31, lifted by better trading performance and contributions from its new Chiswick showroom and new bedroom range. It added that positive trading momentum has continued into the first quarter. Sterling Energy is another gainer despite saying it swung to a net loss in the third quarter, as oil production dropped and costs increased in its Chinguetti oil field in Mauritania. Alba Mineral Resources, Stellar Resources, Doriemus, Solo Oil, UK Oil & Gas Investments, and Regency Mines, are all down heavily despite the companies behind the Horse Hill project in the Weald Basin saying they have made a conventional oil discovery at the Horse Hill-1 well. Atlantis Resources is down after it raised GBP5.0 million in a discounted share placing, money it will use to fund its contribution to the MeyGen project, repay a GBP0.8 million loan, pay fees associated with the seabed lease at the Fundy Ocean Research Centre for Energy in Canada, and for working capital. The company said it placed 12.5 million new shares at 40 pence each.
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Top Economics And General
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The UK economy grew at a slower pace in the third quarter, preliminary estimates from the Office for National Statistics Office showed. Gross domestic product climbed 0.7% from the second quarter, when it grew 0.9%. The sequential growth rate matched economists' expectations. As expected, GDP was 3% higher in the third quarter compared with the same quarter a year ago. GDP was estimated to be 3.4% higher than the pre-economic downturn peak of the first quarter of 2008.
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House prices declined in almost all major Chinese cities in September, data compiled by the National Bureau of Statistics showed. Compared to August, prices decreased in 69 and remained stable in one out of the 70 cities surveyed by the statistical office in September. House prices in Beijing dropped 0.7% and fell 0.9% in Shanghai. On a yearly comparison, house prices increased in 10 cities in September.
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The UK has been told it must pay an extra GBP1.7 billion, or EUR2.1 billion, towards the EU's budget because the economy has performed better than expected in recent years, the BBC reports Friday. The payment follows new calculations by the EU, which determines how much each member state should contribute based on gross national incomes and would add about a fifth to the UK's annual net contribution of GBP8.6 billion, the BBC said. Under the new calculations, the UK and the Netherlands are both being asked to pay more, while France and Germany are both set to receive rebates, it added.
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Italy, France and Austria defended themselves Thursday after their 2015 budget plans came under EU scrutiny, with a new dispute over the bloc's fiscal rules expected to come up at a summit of the EU's leaders in Brussels. The European Commission, the bloc's executive, is currently assessing draft budget plans submitted by eurozone countries, under a system meant to spot financial trouble early on. Italy and France are expected to run afoul of the EU's debt and deficit reduction rules.
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EU leaders agreed early Friday to a new set of climate targets for 2030, after months of negotiations to deliver a benchmark for international climate talks next year, but the deal was immediately slammed by environmental groups. Under the agreement, carbon dioxide emissions are to be cut by at least 40% by 2030, compared to 1990 levels, and at least 27% of EU energy is to be derived from renewable sources by then.
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Pro-Russian separatists in eastern Ukraine said Thursday that they intend to retake key cities from government troops in the region. "Kramatorsk, Mariupol, Sloviansk will be ours. We are ready to capture them. Heavy battles are not excluded," Alexander Zakharchenko, the leader of the self-declared Donetsk People's Republic, said at a news briefing, a video of which was posted online.
Zakharchenko said talks to find a political solution had failed, and he accused the government of violating a truce.
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A doctor who recently returned from volunteering in West Africa was being treated in a New York City hospital early Friday after he tested positive for the Ebola virus in the first confirmed case in the city, officials said. The doctor in New York, identified by local media as Craig Spencer, 33, was taken to an isolation ward at Bellevue Hospital Center for treatment after he suffering a fever and exhibiting gastrointestinal symptoms characteristic of Ebola.
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Brazilian President Dilma Rousseff, seeking re-election in Sunday's run-off election, has seen her lead widen over challenger Aecio Neves, according to the latest opinion polls issued Thursday. According to the private polling institute Datafolha, 48% of voters surveyed supported Rousseff, the incumbent from the centre-left Workers' Party (PT), in Sunday's second-round vote, while 42% favour Neves, a senator from the centre-right Party of Brazilian Social Democracy (PSDB).
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Prime Minister Stephen Harper declared Thursday that the two deadly attacks this week in Canada were acts of terrorism carried out by Canadian citizens. Harper said Canada's security laws needed to be strengthened, and that work on revisions was "already under way and will be expedited." Royal Canadian Mounted Police Commissioner Bob Paulson said the suspect in Wednesday's Parliament shooting in Ottawa, Michael Zehef-Bibeau, had planned to go to Syria. The commissioner said investigators had found no link between Zehef-Bibeau, 32, and a hit-and-run Monday in Quebec.
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The Free Syrian Army, the moderate rebel group fighting to topple President Bashar al-Assad's regime, said it would fight alongside Syrian Kurds in Kobane against the Islamic State group. "We call on the US-allied coalition to support the FSA fighters, who are heading to Kobane," the FSA command in the northern Syrian province of Aleppo said. The statement was also signed by moderate Islamist rebels from the Army of Islam, al-Sham Brigades, the Syrian Revolutionary Front and the Army of Mujahedeen, who are allied with the FSA against the Islamic State extremist group.
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Afternoon Watchlist (all times British Summer Time)
15:00 US New Home Sales
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Monday's Key UK Corporate Events
APR Energy Interim Management Statement
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Monday's Key Economic Events (all times GMT)
All Day Ireland October Holiday
09:00 Germany IFO
10:00 UK CBI Distributive Trades Survey
13:45 US Markit PMI Composite Preliminary
13:45 US Markit Services PMI Preliminary
14:30 US Dallas Fed Manufacturing Business Index
15:00 US Pending Home Sales
23:50 Japan Retail Trade
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