(Alliance News) - The following is a summary of top news stories Friday.
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COMPANIES
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Barclays reported a sharp drop in quarterly profit as the lender's operating expenses rose steeply, though Chief Executive Jes Staley described it as a "resilient" period for the bank. In the three months to September 30, the lender recorded a pretax profit of GBP246 million, 83% lower than the GBP1.46 billion posted a year earlier. Excluding litigation and conduct charges, third-quarter pretax profit rose 18% to GBP1.81 billion. The sharp quarterly drop was attributed to a GBP1.4 billion payment protection insurance provision. Operating expenses rose 42% to GBP4.86 billion from GBP3.43 billion, with litigation & conduct charges jumping to GBP1.57 billion from GBP105 million the year before. In September, the lender warned of an "exceptional" level of PPI claims in the days leading up to the Financial Conduct Authority's deadline of August 29. To September 30, Barclays has recognised GBP11 billion of cumulative provisions.
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WPP maintained its annual guidance for 2019 following an improved performance in the third quarter. The advertising and public relations firm said third quarter reported revenue from continuing operations, excluding Kantar, was up 5.2% at GBP3.29 billion. In mid-July, WPP agreed to sell 60% of Kantar to investment firm Bain Capital Private Equity, which valued all of Kantar at USD4.0 billion. The company also said that it intends to reorganise to separate the Kantar business from the wider WPP group, with completion expected in early 2020. Revenue in constant currency was up 1.9%. WPP explained that the difference to the reported number reflecting the weakening of the pound against a number of currencies, particularly US dollar. Looking ahead, WPP said its financial guidance remains unchanged, both including and excluding Kantar. WPP expects to deliver like-for-like revenue less pass-through costs down between 1.5% and 2.0% year-on-year.
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Glencore reported a dip in quarterly copper output, but cobalt production staged a rebound. For the three months to September, copper output fell 4% to 1.0 million tonnes on the year prior, but cobalt output climbed 21% to 34,400 tonnes. Glencore said the fall in copper production was due to a reshaping of operations at the Mutanda mine in the Democratic Republic of the Congo, a smelter shut-down for refurbishment at Mopani in Zambia, and the disposal and depleted of South American assets. Cobalt production improved, Glencore said, following a ramp-up of operations at Katanga in the DRC. Elsewhere, zinc production rose 3% to 809,200 tonnes after a contribution from Mount Isa and improved production at McArthur River, both in Australia.
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Hastings Group said its gross written premiums in the first nine months of 2019 are up on the prior year but warned of an unsure outlook. In the nine months to September 30, the car and home insurer recorded GBP753.1 million in gross written premiums, up 2.0% on the year before. "The increase in premium prices have been offset by a change in the risk mix of business that is aimed at lower risk segments and a reduction in younger drivers," Hastings said. As a result, the insurer said it has continued to prioritise pricing discipline in the third quarter. Hastings said it applied rates in line with first half claims inflation but was ahead of the market.
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Synthomer issued a profit warning due to a challenging backdrop for the chemicals industry, depressed European industrial activity and increased political and economic uncertainties. The Essex, England-based chemicals company said if current weakness continues through fourth quarter then 2019 underlying pretax profit will be 10% below the GBP135.1 million recorded in 2018 and 10% off the current GBP135.3 million consensus estimate. Synthomer also expects slower trading environment to continue through the remainder of 2019 and into 2020, particularly in Europe.
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Amazon.com lagged behind market expectations for third-quarter earnings, after the e-tailer introduced free, one-day Prime delivery, prompting its shares to drop. Amazon, which has expanded beyond online retailing to video streaming and cloud computing, posted diluted earnings per share of USD4.23 for the three months ended September 30, down 8.4% versus the USD4.62 per share predicted by analysts. This figure also was 26% lower than the USD5.75 EPS posted for the same quarter of 2018. Amazon shares lost 6.7% in New York in after-hours trading Thursday but have recovered some of that in pre-market trading Friday, now down 5.5%. The company reported its third-quarter results after the US market close Thursday.
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MARKETS
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London shares were lower amid uncertainties over the US-China trade war following negative comments about China by US Vice President Mike Pence. The pound was firm against the dollar as investors await a decision from European leaders on whether to grant a Brexit extension. Wall Street was pointed to a mixed open.
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FTSE 100: down 0.3% at 7,303.32
FTSE 250: down 0.5% at 20,050.66
AIM ALL-SHARE: down 0.1% at 891.76
GBP: firm at USD1.2840 (USD1.2828)
EUR: flat at USD1.1118 (USD1.1100)
GOLD: up at USD1,504.55 per ounce (USD1,501.50)
OIL (Brent): flat at USD61.64 a barrel (USD61.65)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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EU leaders are expected to announce a decision over a Brexit delay, in a move that could have a bearing on whether Boris Johnson gets his pre-Christmas general election. The prime minister challenged MPs to back his call for a December 12 vote in return for more time to scrutinise his Brexit deal as he tried to break the deadlock. Johnson will need Labour votes if he is to win the attempt on Monday, with a "super majority" of two-thirds of MPs required to get an election under the Fixed-Term Parliaments Act. Jeremy Corbyn said his decision would come after inspecting the terms of any extension to Article 50 granted by Brussels, which he was expecting to come on Friday. The PM said the outcome of the announcement was "likely" to be the delay until January 31 which he was compelled to request by Parliament.
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Confidence in the UK jobs market has fallen to its lowest level in five years, a new study suggests. Research by jobs site Monster and the Centre for Economic and Business Research indicated that over a third of workers do not feel confident about their current or future employment prospects because of the political landscape. The report said growth in the number of job vacancies had started to slow slightly over the past year. The "volatile" state of politics was having a substantial impact on confidence in the jobs market, said the report.
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US Vice President Mike Pence criticised China for failing to live up to promises made on reining in intellectual property theft as well as raised other common US complaints about human rights violations in the country. China's government continues to "aid and abet" the theft of intellectual property, said Pence, speaking in Washington. The Chinese Communist Party also continues to resist change, especially in its treatment of religious minorities and its stance on pro-democracy protests in Hong Kong, in ways that harm the potential for building a foundation for better ties with the US, he said. But Pence said that despite China's "aggressive and destabilising" behaviour in the last year, the US does not seek confrontation.
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Japan's new trade minister has submitted his resignation after being accused of violating election law by offering voters money and gifts, Prime Minister Shinzo Abe said. Isshu Sugawara had been in the hot seat after a magazine reported he was suspected of paying 20,000 yen, about USD185, to a bereaved family in his constituency. He was also reported to have given gifts to other voters, including pricey melons and even crabs, Kyodo news agency said. The sums involved, while small, would constitute a violation of Japan's public office election law. Abe said Sugawara submitted his resignation after a cabinet meeting and that he had accepted it.
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