Trending tickers: Shell | Microsoft | Zoom | BT
A look at the stocks making headlines on Tuesday
Shares in Shell remained higher on Tuesday after its annual general meeting (AGM) was disrupted by clashes over climate action following the energy firm reporting a record year of profits.
Shareholders looking to further maximise oil and gas profits were up against activist investors seeking to focus on more renewable investments. Investors in the oil company, however, rejected new targets for carbon emissions cuts.
Meanwhile, Wael Sawan, Shell’s chief executive, and Andrew Mackenzie, Shell’s chair and the former chief executive of the mining company BHP (BHP.L), defended the company against accusations that it was not switching from fossil fuels to renewables fast enough.
Investors were also set to vote on pay packages, including for the outgoing chief executive Ben van Beurden, who received £9.7m ($12m).
Read more: FTSE 100 lower as inflation widens UK budget deficit to £25.6bn
Oil majors have reported bumper profits, buoyed by soaring energy prices following Russia’s invasion of Ukraine in February 2022.
Shell reported its highest-ever annual profit of nearly $40bn in 2022, surpassing its previous annual record of $28.4bn in 2008.
Earlier this month, the energy group reported adjusted earnings of $9.6bn for the first three months of 2023.
The increasing interest in artificial intelligence (AI) and its latest developments continues to spike the interest of investors.
Microsoft said its AI is already showing signs of human reasoning as it pushes ahead with a new version of web search based on AI.
A keynote on Tuesday evening from Microsoft CEO Satya Nadella will further expand on how Microsoft is giving AI rival Google (GOOG) a run for its money.
Read more: Stocks that are trending today
Microsoft has been cleared to close its $69bn acquisition of Activision Blizzard (ATVI) after China and European lawmakers approved the deal.
The move would give Microsoft a powerful advantage in attracting users to its cloud-gaming service but could potentially hurt rivals Sony (6758.T) and Nintendo (7974.T).
The US Federal Trade Commission (FTC) is against the deal, however, over competition concerns.
Zoom stock trended higher in the US following its latest financial update.
The video communication platform raised its full-year forecasts for revenue to between $4.47bn and $4.49bn, representing growth of about 2% from last year. Its earlier forecast was for $4.44bn to $4.46bn.
Meanwhile, its online revenue fell 8% to $473.4m for the quarter ended 30 April. The group said it expects it to reach nearly $480m in the second quarter and be relatively flat thereafter in fiscal 2024.
Read more: UK firms hike prices as private sector growth slows
Zoom now expects annual adjusted profit per share between $4.25 and $4.31, compared with an earlier estimate of $4.11 to $4.18.
Zoom has seen increased competition from rivals, including Microsoft Corp's Teams, Cisco's Webex (CSCO) and Salesforce's Slack (CRM). Moreover, the COVID-19 lockdown proved profitable for the group as workers turned to the platform for remote meetings, a trend that remains but has since declined.
BT Group (BT-A.L)
In the UK, BT Group is in focus, thanks to Altice UK, owned by Patrick Drahi, which is upping its stake from 18% to 24.5% by acquiring a further 650 million shares. However, Altice UK insists it does not intend to make an offer for BT.
It comes after BT’s earnings sent shares sharply lower last week.
Victoria Scholar, head of investment at Interactive Investor said: “Clearly Altice UK judged that now is an opportune moment to acquire further shares at an attractive price point with the stock down several percent since last week. In June 2021, billionaire Drahi paid around £2.2bn for a 12.1% stake in BT.
“In December that year, his company Altice UK raised the holding to 18% at a price tag of roughly another £1bn. Last year the UK government gave the green light to Drahi’s stake building, ruling that it didn’t pose a national security threat.”
Read more: UK inflation set to fall back into single digits
BT’s results last week also highlighted the pressures facing the business with falling free cash flow and plans to slash 55,000 jobs.
“It has been dealing with cost pressures from inflation and energy bills as well as capital expenditure on its national fibre network rollout. Altice UK’s stake building provides a vote of confidence in BT but there are questions about what changes Drahi may want to implement to the business. Perhaps this could pave the way for more aggressive cost cuts at BT,” Scholar added.
Shares in BT have fallen by more than 20% over the past twelve months but have been staging a recovery in 2023.
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